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How to turn your hobby into a successful business

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.

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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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