What is fun as a hobby can often make a nice small business. After all a hobby is something that is enjoyable and might be profitable. However, when looking towards making a hobby a home business opportunity, it is important to make sure that several key factors are considered.
A hobby or craft project that might be enjoyable and able to add a little extra income at festivals and hobby shows, but can the hobby become a business? Before getting started and dreaming of having fun and making buckets of money there are some business basics that need to be considered.
Start-up Checklist:
1. Will this business be something that can be done full time and has longevity, not a passing fad? Not only should a business be established on a hobby that has a long term growth opportunity, but it should be something that the business owner can do for many years.
2. Will a business license be needed for the county, state, or country where the home-based business will be located? Check with local agencies to find out about regulations. What might be possible to perform as a hobby may incur additional costs or restrictions not considered when performing as a hobby.
3. Do local zoning laws allow “home-based businesses” or businesses that can have customers in a residential area? Most areas have very specific laws regarding public offices or shops being operated in residential areas. Be prepared for complaints from neighbors even if the local laws permit operation of the home-based business.
4. Does your home offer enough space to devote to your business? Having a hobby can take up considerable space, but actually operating a business takes even more space. Do you need office, storage space, or work room areas? For USA residents and IRS tax regulations, a dedicated area is most advantageous, but check out the link to the IRS publication on Hobby to Business. Additionally, a more professional image is created by keeping business space separate from personal living areas.
5. What start-up costs will be needed? Besides the costs needed for the actual hobby turned business these costs will need to be considered: Legal and Licensing costs, Liability and Property insurance, Office/Hobby equipment, and Marketing/Advertising budgets.
Most importantly, the hobby business needs cover all the above costs and still be profitable enough to pay you a salary. Costs can add up quickly and the retail or wholesale prices charged while still a hobby might not be enough to pay for full time employment. Being aware of everything that is required to turn your hobby into a money making business is important.
Find a way to make the dream a reality, and remember if at first that age old adage, "if at first you don’t succeed, try, try again!"
Margo Dillard - Margot has finally had her second book published, Life By The Glassful. Both her new book and her first one, Wine and Sweet Words are ...
