Many people apply their creative talents or skills to a hobby or interest. Quite often, what begins as a simple pastime can blossom into a larger endeavor. The seeds of many large corporations were once planted by people in garages, attics, and basements after hours while they worked a regular day job. The stories of how these successful entrepreneurs turned a hobby into a business capture our attention, win our admiration, and spark our curiosity.
While some ventures mushroom into full-scale productive businesses, others have failed, leaving a trail of unemployment and debt. So, here are some factors to consider for launching your personal pastime or hobby into a bona fide business enterprise:
Fun may turn into routine. If you start a restaurant because cooking is fun, you may discover there is an enormous gulf between entertaining friends and pleasing sometimes difficult customers. One way to determine whether you can make a success of turning your hobby into a business is to take a job in a similar business. Then, if you like the routine and demands, and your feelings remain positive, proceed with your plan.
Dreams must be marketable. A hobby transformed into a business can be personally and financially rewarding. However, consumer need and positive public response are what turn creative ideas into real businesses. The more demand for your products or services, the more likely your enterprise will flourish. But, your venture must be marketable and your business personality salable.
Research the marketplace. Perhaps you have the classic entrepreneurial dilemma and wonder, "If I have this great idea, why hasn't someone else thought of it?" It is important to determine whether others have tried your idea or not, and succeeded or failed. You can do this rather quickly through Internet research on company websites, and obtaining annual reports from companies in the same field. At the risk of exposing your idea to potential competitors, you may want to consider contacting businesses via social networking sites, such as LinkedIn and Facebook for a more casual approach to find out more information on similar products and services.
Don't Quit Your Day Job. Until you have proven to yourself that there is a solid market for your idea, and know you can follow through on making your dream a reality, keep your current job and stable source of income. Many successful hobbyists-turned-entrepreneurs operate businesses during their free time until they are forced to leave their day job due to the increasing success and demands of their expanding new business.
Count the cost. The cost of capital and your time requires both financial and emotional resources. Intellectually, the dollars you need and the dollars you have may seem manageable. Emotionally, the hours you need to devote, and the time you need to put in, may also feel quite manageable. However, in the final analysis, the fruits of your labor and the rewards you anticipate must drive you past the incalculable stressors, potential hardships, physical challenges, and seemingly insurmountable odds you may face. Now, look at the potential revenue and answer the question, "Am I willing to work for that amount?"
Trust your instincts. Like other entrepreneurs, people who turn hobbies into businesses often have unusual intuition and insight, along with good timing. Their perseverance and willpower overcame obstacles, setbacks and, sometimes, even rejection, to manifest their vision into reality.
Develop a written plan. A business plan will help you determine where you want to go and force you to focus on how to reach that destination. Organize stages or steps and establish benchmarks. Consulting other professionals for suggestions and wisdom is another valuable strategy.
Check your insurance coverage. Remember that once you make a permanent jump from being an employee to a business owner, you lose certain fringe benefits. Make certain you have established adequate health and life insurance, as well as disability coverage before you embark on your new career as business owner.
No one can measure your emotional or intellectual fortitude or what motivates and drives you. So, when you've done your homework, developed a strong business plan, secured enough start-up capital, and are ready to launch your venture, the sage advice might be: "Don't think about it, just do it."
The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax, legal, or financial advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any securities. This newsletter is written and published by LIBERTY PUBLISHING, INC., BEVERLY, MA