Money Makers: Turning Your Hobby into a Small Business

Tips for Turning Your Hobby into a Small Business

Moms take care of the children, run the household and keep all the members of the family on track. It can be very, hectic, but rewarding. However, wouldn't it be nice if you could also make money off something that you enjoy doing? Whether it is baking, sewing, crafting or something else, turning your hobby into a business is a nice way to supplement the family's income by doing something you love.

Accounting

You will not need a business license right away, but you do need an accounting system to keep records of your income and expenses. Do not take chances with the IRS. Even if your business starts out as a series of small jobs, you still have to declare that income on your taxes, but you can deduct your expenses as well. In many cases, a simple spreadsheet and filing all your receipts will suffice, or you can buy QuickBooks Online Simple Start for less than $50.

Write a Business Plan

Even if you are not planning to turn your business into a Fortune 500 company, you still need a business plan for how you are going to make money, find customers and how you plan to run your business. Learn how to create a business plan and do not let all the business jargon intimidate you. You do not need to include every element of a business plan, just the ones that are most applicable to your business. The business plan will help you stay on track.

Funding

Every business has startup costs. You might need materials, equipment like a postage scale or money to create a workspace in your home. If you can borrow from the family savings without cutting yourself short, that is a good way to go. If you do not want to touch your savings, you can apply for a small personal loan through a website like creditloan.com personal loans or prosper.com. Assess your needs before you apply for the loan and do not borrow any more than you absolutely need.

Advertising

Spreading the word about your new business is not as difficult as it sounds. You can start out by doing something simple like pasting photos on Facebook or Twitter about your latest projects. Casually tell your friends about your new business without making it sound like you are trying to sell them something. Word of mouth referrals are often your biggest help. Every customer you satisfy will tell their friends about you and some of them will become customers too.

If you pace yourself, turning your hobby into a business does not have to be a big risk. Start out with people you know and win over some loyal customers first. Be friendly about it, but also do not be afraid to tell people about your business. If you keep your initial costs low, you will not be taking a huge risk if things do not work out. Plus, since your business is your hobby, you can probably keep any unsold goods for yourself and still get use out of them.

About the Author: Dona Collins is a small business owner and writer who enjoys helping others find their way in the business world.

Growthink has created a thorough guide to creating a business plan, which also provides a template: