When you find a hobby you love, it’s easy to get sucked in. Instead of spending your downtime on a hobby, monetizing your passion lets you work while you play. Follow these tips from Sante Fe Art Studio to convert your hobby into a small business and keep doing what you love.
Try Your Hobby as a Side Hustle
As much as you might love your hobby, doing a dry run as a side hustle is a smart first step. Especially for hobbies like crafting, material costs, and your hourly investment can be hard to pin down. Taking on some smaller projects will show whether scaling up is possible (and enjoyable).
Once you determine if your hobby is profitable, you’ll need to run some calculations. Consider your profit margins, tax responsibilities (self-employed professionals owe quarterly taxes), and up-front costs. If the math checks out, it’s full speed ahead.
Self-Study for Business Gains
Shifting from hobby to business may feel natural, but it’s wise to read up on actual business before diving in. Because startups vary so widely, it’s unlikely that you’ll find the exact instruction you need from a single source.
The solution? Educate yourself, read books about business, chat with other small business owners, network extensively, and keep trying new things. Plenty of small businesses fail, but as the US Chamber of Commerce points out, passion, tenacity, and flexibility are all crucial traits for success in entrepreneurship.
Get Formal with a Business Structure
When you’re ready to forge ahead with making your hobby a full-time business, it’s time to get official, such as by forming a limited liability company. If you’re asking “do I need an LLC?” consider the following advantages:
- Limited Liability: The primary advantage of an LLC is that it provides limited liability protection to its owners (members). This means that the personal assets of the members are generally shielded from the business’s debts, lawsuits, and legal liabilities. If the LLC incurs debts or faces legal issues, the members’ personal assets, such as homes and savings, are typically protected.
- Flexibility in Management: LLCs offer flexibility in how they are managed. Members can choose to manage the company themselves (member-managed) or designate a manager or managers to handle day-to-day operations (manager-managed). This flexibility allows you to tailor the management structure to your business needs.
- Pass-Through Taxation: By default, LLCs are treated as pass-through entities for tax purposes. This means that the LLC itself does not pay federal income taxes. Instead, the profits and losses of the business “pass through” to the individual members, who report them on their personal tax returns. This can result in potential tax advantages and simplifies tax compliance for small business owners.
- Minimal Formalities: Compared to corporations, LLCs have fewer formal requirements. They typically have less paperwork, fewer ongoing compliance obligations, and fewer annual meetings and record-keeping requirements.
Digitize Business Documents
Digitizing paper records makes it easier to share and safeguard business-related documents. For extra security, consider scanning or converting your documents to PDFs which are also password protected. A free online conversion tool makes this process easy. In fact, if you have other important files that are saved as different file types, you’ll probably want to save them as PDFs. This file type is stable, easily encrypted, and is the best solution for file storage and safeguarding.
Establish a Web Presence
Establishing a web presence is the best way to promote your hobby-turned-hustle. Creating a website can be as involved as you want, but launching a (free) webpage is simple. Listings on review sites (including Google) can also promote your business on the web.
From fundraising for your startup to booking clients to selling products online, there’s almost nothing you can’t do with a digital identity. When it comes to marketing, social media plus a website might be all you need.
Adjustments for Working from Home
For artists working at home, it’s crucial to establish a dedicated workspace where creativity can flourish without distractions. Organize your art supplies and tools for easy access and efficient workflow. Set a consistent work schedule to maintain productivity while also allowing time for breaks to avoid burnout.
Since your art is now a business, it’s important to keep track of finances; consider using simple accounting software to manage expenses and income. Networking is key, so leverage social media platforms to showcase your work, connect with potential clients, and engage with the art community. Lastly, continually hone your skills and stay updated with trends in the art world to keep your work fresh and relevant. Balancing the creative and business aspects effectively can turn your artistic passion into a thriving home-based business.
Try Your Hand at Marketing
Marketing efforts can start simple, but getting your name out there is a must. Buffer notes that a combination of local promotion and digital marketing might be your best bet for reaching the right target audience.
Digital marketing might sound intimidating when scaling up from a hobby to a full-time business. Put simply, digital marketing adapts to any size business and lets you focus on a specific target audience. Some marketing elements (like newsletters) can even be automated so that you cater to clients without spending extra time away from your craft. Start by developing your content strategy and then apply SEO strategies to reach a larger audience.
Make Meaningful Connections
One highlight of using social media as digital marketing is that it lets you connect with customers if that’s what you prefer. Constant Contact points out that many small companies focus on building relationships with their audience, which helps them sell products and create loyal customers.
You should also be prepared to network with people in the real world. Business cards can be very helpful when networking and in-person marketing. It’s easy to design personalized cards with pre-made, customizable templates. Then, you’ll have something tangible to give prospective clients to remember you by.
Learn the Ropes of New Business Management
Some parts of shifting your hobby into business gear are un-glamorous. Choosing a business structure, digitizing your business documents, and paying taxes can be dull, but being able to do what you love and get paid for it is a priceless perk.