You’ve heard the saying, “do what you love and the money will follow.” If you have a hobby that you love, it could turn into a regular business for you. In a slumping economic climate, many people who are laid off or unemployed find that starting a business out of a hobby is the right thing to do at the right time.
Here are some tips to think about as you prepare your hobby to become a business.
Write a Business Plan
Priority number one is to write a business plan. If you truly want to go pro with your hobby, it’s time to stop treating it as a hobby and make it a business. That means having a written business plan that will give you direction. Even if you don’t have all elements necessary, such as full market research and 5-year financial projections, you can still compose a business plan that gives your business vision and direction.
Register Your Business
Get your business registered with all the necessary paperwork. Apply for an IRS tax ID number. This will help give your business legitimacy, and it may even be necessary when opening a business bank account. Research and acquire all necessary licenses from local governments, such as a city business license. And don’t forget about permits, if necessary, if your business is light manufacturing.
Separate Personal and Business Accounts
Open a separate business bank account. This is absolutely necessary to separate your business finances from personal. Use business checks for expenses and a separate account or other accounting software to track your income and expenses.
Insure Your Business
Insurance is a necessary evil. Do you own and use expensive equipment for your new business? Do you perform services for clients? Business insurance will protect your business property from financial loss due to theft or damage. Liability will help ensure that you have coverage in case a client should ever file a lawsuit against you.
Market, Market, Market
Once you’re in business, you need customers and clients to stay in business. Create a website. Use every contact in your network to get the word out about your business. Post free ads on Craigslist. Purchase paid advertising in newspapers. Form joint ventures with other business owners.
With the right footwork, you can indeed turn your passion and hobbies into a lucrative business!
