Tips from SCORE: Business plan is a big help when turning hobby into a business
The dream of earning a living doing what you love is the reason so many business owners enter the world of entrepreneurship.
Do you carve birds, create note cards with handmade drawings, create pottery, jewelry, unique clothing, paint canoe panels or screen-print customized sweatshirts? During the startup phase, the passion for and dedication to your product or service and those you serve are the necessary ingredients for a successful venture.
The desire to turn a hobby into a business is one way to grab ahold of that entrepreneurial dream. But, before you quit your day job and jump in headfirst, you need to answer the question, "Will my hobby make a sustainable business?"
Turning a hobby into a successful business means a willingness to take your hobby from something that you want to do into something you have to do. If you want to earn a living doing what you love, you’ll need to shift your mindset and operate your hobby as a serious business. One of the hardest parts of making that shift for a lot of owners is looking at your hobby as something you have to do and no longer something you only do when you feel inspired.
Emily Heaslip, a contributing writer for the US Chamber of Commerce, recommends that you don’t lose the joy of the hobby as you transition.
Distance yourself from emotions
When you’re making the business case for a hobby, distance yourself as much as you can from the love of it and think through a few of the realities that come with being a small business owner. Ask yourself: Will you still enjoy your hobby once it becomes your job day after day? This means fully dedicating yourself to your passion, even on days when you’d rather be doing something else.
Are you willing to put yourself out there? This is a big one. Many of our hobbies are reasons for us to escape the day-to-day world. When your hobby is your business, you need to be shouting about it from the rooftops. Is there a market for your product or service? Is the market large enough to support and sustain your business and are there customers out there willing to spend money on what you create? Can you and are you willing to become more than just a hobbyist?
As a business owner, you’ll also be the accountant, the salesperson, the marketer and fill every other roll during the start-up and growth phase. You have to create the right balance between what you love to what you are doing as a small business owner.
If you’re ready to shift from hobbyist to small business owner, take the time to develop a well thought-out business plan. Like with any startup, do the work of writing a solid business plan before you go “real time.” Even if you’re not seeking funding, a business plan is invaluable.
A plan increases success by 16%
It’s the best way validate that there is, in fact, a strong business case for your hobby becoming a sustainable business. Ask yourself these questions. (1) Determine the Unique Benefit — your Value Proposition — what need, want or desire will your product or service provide? Another way to think about this is ‘what is the problem that your product or service solves. (2) Identify your Target Customer. Define the types of buyers who will need your product/service? And, of those, which are willing to pay for it? Identify this target customer and think through their age, gender, where they live, and their other demographic and psychographic attributes. (3) Consider how you will communicate your Value Proposition. Every business has competitors. How will you prove to your target customers that your product or service will bring greater value to their lives or businesses than any of your competitors?
Use the Business Model Canvas (www.strategyer.com) as your initial planning template. It helps explore your business model options by both planning internally and externally. A written plan is important because it helps identify the time, energy, and financial resources necessary to take your hobby to another level.
Heaslip reports that hobbyists who create a business plan are 16% more likely to succeed in the transition. Before you make the move, connect with a mentor to have an accountability partner and guide through the process.
Contributed by Marc L. Goldberg, Certified Mentor, SCORE Cape Cod & the Islands. Source: Ask SCORE 2021. For Free and confidential mentoring contact SCORE at www.capecod.score.org, firstname.lastname@example.org, 508-775-4884. Source: ASK SCORE, Emily Heaslip, Contributor, U.S. Chamber of Commerce CO, May 31, 2022.