Turning your hobby into a business 101

If you have a hobby you’re passionate about, perhaps you’ve considered turning it into a business.  

Many hobbyists dream of sharing their passion with others through a business. This could involve less stressful activities such as candle-making or turning their love of diving into a dive shop.

So, what’s the difference between a hobby and a hobby business? If you’re not conducting a taxable activity, what you’re doing is a hobby.​ You don’t expect to make a profit out of your hobby.

If you are shifting your hobby to a business, you should treat it exactly like that: a business with all the business issues to overcome.

Should you turn your hobby into a business? Let’s look at the pros and cons.

You can indulge in your hobby whenever possible – no deadlines and time restrictions. 

The pros of turning your hobby into a business 

Turning your hobby into a business often allows you to make a profit doing something you love.

You can be your own boss, working flexible hours and managing your own workload.

You have free reign to promote your business any way you see fit.

You’ll also be diving into something you already know a lot about. It means you may already have the equipment or tools necessary to create the products and services you want to offer in your business. This may help minimise start-up costs.

You might also belong to social media groups and community groups related to your hobby, which could give you a head start on your customer base. 

Cons to consider before turning your hobby into a business  

Starting up a business can take a lot of time, effort, and money.  

You might not even make a profit for the first few years of your business, which can make it feel like a grind.

The great side of a hobby is that you can indulge in it any time you want and just enjoy it. When it becomes work, it may cease to feel like a hobby.   

But if you’re willing to continue with your venture, here are some ways to help you get started. 

6 steps to help turn your hobby into a business 

Do your research

Make sure there’s a market for your proposed venture. While you may love it, it’s important to ensure it’ll be profitable to help ensure you’re not losing money.  Research the market and where you can fit into it.

Establish a business plan

Create and execute a business plan. A business plan should include targets, objectives, a target market, and a roadmap for launching your product or service.

Develop a unique selling point 

What will your point of difference be? Perhaps it’s your focus on relationships, or maybe your business has a charitable element. Or maybe the product or service you offer is unique in itself.

Establish processes and systems 

This is getting into the nitty gritty – you often need to make sure you have processes and systems in place to ensure you’re compliant and doing everything by the book.

Set your business up online 

These days, it isn’t easy to survive without an online presence. The good news is it’s easier than ever to set up a website and social media accounts to get your brand out there.

Market your product or service 

Now it’s time to spread the word. Look into a range of ways to market your new business, from social media and digital strategy to word-of-mouth channels.  

To sum up  

Turning a hobby into a business can give you the chance to work on what you love while earning an income to support it.

However, it is a business, and you may need to treat it like a business, putting together a strategic business plan, doing the financials and be well aware of bumpy conditions in the market.

Your hobby turned business may take off, but can you scale it up? Are you able to take on business owner responsibilities if you start employing staff?

Consider your business ideas carefully and ensure you’re receiving the right advice beforehand.

Important notice 

This article provides information rather than financial advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, and seek appropriate financial advice before you act on any information.

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