Sunday, January 16, 2022

Turning Your Hobby Into a Side Hustle? Here’s What You Need to Know

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Having a hobby you enjoy is a great way to relax and broaden your interests. Whether you enjoy painting, making soaps and scrubs for friends and family, baking, or cooking for groups of friends, you might wonder about making extra money from your hobby. This article will help you weigh what you need to consider if you’re thinking about extra income from these pursuits. 

The distinction between a hobby and a business is basically financial. While hobbies can and often do generate income, a business exists solely to generate income by engaging in business activity. Making a transition to a business requires many considerations, including funding, marketing, and time management.

If you’re thinking about turning a hobby into a side hustle, you’ll need to decide how to track your finances. Financing and workspace requirements seem obvious, but insurance and licensing requirements are also extremely important. You may need to update or add to your insurance, perhaps adding a rider or getting a business insurance policy to cover your business activity and shield you from liability.

If you are going to be selling at crafts fairs or farmer’s markets, they will likely require insurance coverage and a sales tax number before allowing your business. This will also be important at tax time. 

If you enjoy your hobby and aren’t quite sure that you’re ready to make the leap to a business, consider how much time you have in your schedule to devote to a business. How much time do you spend on your hobby? It’s also important to determine whether there is a market for what you do.

As you consider your idea, research your local market, establish a social media following for your hobby, and join social media groups. There are excellent groups online for artists, crafters, and photographers to share experiences and learn from each other. 

Explore local marketing opportunities such as farmer’s markets, holiday markets, large regional arts and crafts shows, as well as your social group and peers. 

Consider offering your products or services to friends and family. If, after exploring these options, you decide against marketing your own products from your hobby, that’s ok. There are many other options if you feel like you need some extra income; you might consider a different work-from-home side hustle

There are many ways to generate extra income. Options include doing gig work like food delivery, personal shopping, or driving for a rideshare company. 

If you’d prefer to go it alone, sesasonal baking, catering special events occasionally, or babysitting are all possibilities to earn extra income and can be done as your schedule allows. Just make sure that you have the proper auto insurance, such as Uber Eats insurance, for a side gig involving your vehicle.

Taking the Leap

If you decide to pursue turning your hobby into a business, make a business plan. This step is very important. Your business plan doesn’t have to be complex or complicated. Templates for creating a business plan can be found online. There are also groups online, on social media, and in your local community that might be helpful. 

Local small business groups, the Small Business Administration (SBA), and local community colleges are great resources for starting a small business as well. You might consider a trip to your local library. Librarians are excellent resources on what local resources and tools are available to you. 

You might start by deciding how much time you will devote to your business. Develop a schedule, and dedicate that time to getting set up with your record-keeping, finances, and planning. 

Investigate any local requirements for getting set up, such as a business license, sales tax registration number, and establishing a separate bank account for your business. 

Consider setting up an appointment with an accountant or professional bookkeeper as you are getting set up. Doing this will help you establish good habits and make sure you have a good system to track your finances. Laying a good foundation for tracking finances will make things easier down the road. 

Determine your initial funding needs and decide if you need business credit. When you’re ready to declare that you’re open for business, you should have a dedicated work area, a system for keeping up with your finances, and time to devote to your new venture. Starting something new is exciting.

Making extra money is always a positive. And empowering yourself to take more control over your finances is an awesome feeling. One can never tell what lies in the future. I personally have three friends that turned their hobby into a business. They now have turned that business into a full-time gig. 

One friend now has a lovely storefront and employees for her bakery. She started almost 10 years ago doing holiday baking and marketing herself on social media. From shipping a few packages of holiday treats the first two years, she added holiday markets and church bazaars in the following years. 

Having confidence in your idea, researching your market, and establishing a social media presence will all contribute to your success. Start with a plan and work toward your goals. Hopefully, sharing your hobby will be enjoyed by a lot of people, and you will have a lot of demand for your product or service. 

When you are ready to begin marketing, it is very important to have an established pricing strategy that covers your supplies, time, overhead and still makes a profit. Brisk sales are not your only goal. You must be sure your expenses are covered and that you are making money. 

You’ve made the leap….

After you have your side hustle up and running, keeping things manageable is essential. Managing your time, keeping track of your money, and not getting overwhelmed are essential. Remember that you don’t have to accept every order that comes your way. There may be times when you find yourself lacking motivation.

This is a common experience and happens to all of us. Don’t be too hard on yourself. Take a break. Give yourself some time away. Go for a hike, get away for a day, or a weekend. There are a lot of ways to get your groove back. Check out some strategies to overcome procrastination. 

Turning away business may seem counterproductive. There may be times when that is exactly what you need to do. After all, this is your side hustle. You still have your regular gig. You also have family obligations and social life. Remember to give yourself a break. Don’t overextend yourself; stick to your plan. 

Having a hobby, you truly enjoy is a wonderful way to relax. Turning something you love into extra income is a great bonus. If you really want to turn your passion into a business, make your plan and be persistent. 

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