| How to turn your hobby into a successful
business |
| By Jenny
McCune • Bankrate.com |
|
From hobby to business sounds like a dream come true:
Do what you love and get paid for it. The recreational skier becomes
an instructor. The quilt maker quits her day job to sell hand-stitched
coverlets. The gourmet turns food caterer.
But before you quit your day job, check out these
six steps to help turn your hobby into a career:
Step 1: Research your market
Step 2: Create a business plan
Step 3: Take stock of your business sense
Step 4: Be
realistic about how it will affect your life
Step 5: Decide
how committed you want to be
Step 6: Find
an innovative business angle
Step 1: Research
your business idea.
You have to determine whether you can make money by turning your
hobby into a business. Start by answering these questions:
- Will someone pay me for my product or service?
- If so, will a buyer pay enough so I can make
a profit?
- Will enough people buy my product or service
so that I can make a living?
- Is there an economical way to distribute and
sell my product or service?
To answer those questions, do market
research. Use sources such as your public library and the
Internet. Quiz fellow hobbyists about your idea. If you have the
funds, hire a consultant. Talk to would-be mentors or take a course
to help determine if this is the right move for you.
In the case of fine-food lover Mary McCarthy, founder
and CEO of Tutta California, a producer of California-produced
olive oil and cabernet wine vinegar, she took a course in sensory
evaluation of olive oil at a local university. In addition to
learning about her topic, she also quizzed her professor about
her business idea. Based on those discussions as well as many
industry players, McCarthy found that small boutique players dominate
the U.S. domestic olive oil industry. There was plenty of room
for her company to become the first national producer of olive
oil in the United States.
Step 2: Create
a business plan.
A good way to get a sense of whether you have a money-making business
proposition on your hands is to draw up a business
plan and financial forecasts for the next five years, says
Bob Klein, a Newport Beach, Calif., certified public accountant
and certified financial planner. There are books on the subject
or hire a business consultant to advise you.
Here is what your number crunching should tell you:
- What sort of capital do I need to start the business?
- When can I expect to make a profit?
- How much income can I expect within a year, two
years and up to five years down the road?
"You have to figure out how much you'll be
spending to produce this hobby or item or whatever, what you can
sell it for, and how much time is involved," sums up Janet
Attard, found of the Business Know-How Small Business Resource
Center on the Internet.
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