Many successful entrepreneurs started their businesses from their hobbies. So many today are following suit. The reasons why are as varied as the people themselves. Some are simply tired of the career they now have, some feel the need to have something going on in case they get laid off in the next downsizing exercise. Others are simply consumed by the passion they have for their hobby. So how do they do it? Turn their hubby into a business? The following steps are a good guide.
Survey the Market
The first step is to take a long hard look at the market. No matter how much praise one receives from friends and family or even fellow enthusiasts, a calm and critical look at the market is essential. Are one’s skills up to the standard of the other players in that market? This requires an honest assessment. Can one withstand the competition? Is there any special service or circumstance that sets one apart from the crowd, in what area is the new business going to compete? Price or service delivery? All these are questions that require answers.
The profit motif is the driving force behind any business. The price the new entrepreneur charges must cover his cost and make a profit. To calculate the price charged, he must add up all his expenses both tangible and intangible. Before proceeding further, he must once again make sure that the price is competitive.
Done the Math ?
Make sure that your mathematics adds up. Write a feasibility study on the business. There is no need for an elaborate study. Just something that lists all the inputs required and their costs. The entrepreneur then compares this estimate with a realistic estimate of the expected income. After this, the entrepreneur has something against which he can compare his real experiences. The document will also help prioritize the items that the business requires for the business. Some he will buy at the start while others can wait till later.
Make It Real
Once the business has taken off, either as a part-time or full-time venture, the owner must take it as a business and no longer a hobby. The entrepreneur must treat the business the way he would if were an employee in it . All the obligatory things a business has such as a proper bookkeeping system to keep track of expenses and income. The business should have its own separate business bank account and credit card. Seek the advice of professionals, like lawyers and tax consultants. Hopefully the new entrepreneur would have decided what legal framework (such as a sole proprietor or partnership) he wants to start with.
Test Drive The Business
Some entrepreneurs will prefer to test the market, by starting the business on a part-time basis. This will give them some real-time experience on which to base the decision to go full-time into the business or to stay as they are. Even if the business starts as a part-time affair the entrepreneur should have a plan for how he is going to market the goods or services he intends to sell. The entrepreneur should keep in mind that the level of service expected of him is the same even if the business is on a part-time basis. He must still put in his best to satisfy the customers.