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How to turn your hobby into a successful business
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Similarly, if your spouse has a steady job, it may make sense for you to dabble with turning your hobby into a business. But if you're the family's sole wage earner, taking the entrepreneurial route could be a road to disaster.

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Step 5: Decide how committed you want to be.
The answers you arrive at in Step 4 will in large part determine whether you turn your hobby into a full-time business or make it a part-time venture. Either choice has pros and cons.

The advantage of going full-throttle is that you've got a powerful incentive to succeed and you'll be able to devote the time necessary to allow your venture to grow. A part-time venture, by contrast, may never really succeed because you're not allocating enough time and resources to it, says CPA Klein.

The disadvantage of chucking it all for a new business is that you have no parachute. If your business dream takes flight, fine. If it crashes, you're going down with it.

Starting off slow by keeping your job and starting a business part-time can help reduce the amount of capital necessary. Your exposure is also less; if your business fails, you still have steady income from your other job.

Step 6: Find an innovative business angle.
Once you get (or give yourself) the green light to turn your hobby into a business, you have to figure out the twist that will turn recreation into income.

"Just because a hobby is fun doesn't mean they'll pay you to do it," says Chris Cameron, a train collector who turned his passion into a business. "One obvious thing I could have done was buy a bunch of trains and sell them. Not a good idea. You collect what you love and sell what you hate."

So instead merely selling model trains, Cameron found an unmet need. Hobbyists want to know how much train sets and their parts are selling for; pricing can fluctuate widely and it was nearly impossible for people to keep track on their own. Cameron, who knows something about software programming, found a partner and they designed a program that tracks pricing in the model train market.

Ways to transform a hobby into a profitable business include:

  • Solve a problem. Amateur guitar players have to learn chords and scales. Chords are relatively easy to learn. Scales require fingering, a difficult and time-consuming skill to master. So Rusty Shaffer, guitar player and inventor, created a computer-powered guitar that fingers the instrument for learning players. He now sells his invention through his business, Optek Music Systems of New Hampshire.
  • Teach others. Almost any hobby, from mahjong to martial arts, can be taught in classes for which can charge.
  • Sell the raw materials. Suzanne Colon and Cameron Hildreth love knitting. Lucky for them, it's a hobby that's been gaining in popularity. (Last year, reports the Washington Post, Americans spent an estimated $450 million on yarn and other knitting essentials up from $400 million from five years ago.) So Colon and Hildreth opened Stix, a Bozeman, Mont., store where other knitters and crocheters gather to exchange tips, take classes or buy fine yarns. Although Stix is an actual retail location, don't overlook the possibility of selling your hobby's essential materials via an Internet shop.
  • Expand into related services. Charlotte Reed owns Two Dogs & A Goat Inc., a pet care service in Manhattan and Hampton, Long Island. If Reed operated solely as an individual dog walker, she probably wouldn't be making enough money to suit her. But her pet-care empire offers dog walking, exercise programs, grooming, training and sitting services for dogs, cats, birds, fish and other small animals.

Train enthusiast Cameron compares a successful hobby-based business to a military operation. "It's like the Marines," he says. "They improve, adapt and overcome. You have to do the same with your hobby-turned-business."

Jenny C. McCune is a contributing editor based in Montana.


Bankrate.com's corrections policy -- Posted: Feb. 7, 2005
 
 
More stories by Jenny McCune
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