#businesshobbydistinction

/Tag: #businesshobbydistinction

THREE THINGS YOU NEED TO TURN YOUR HOBBY INTO A BUSINESS

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More and more, we see a phenomenon expanding in the economy: skilled workers opting to stay at home and choosing to do contractual jobs over the internet. They take on employers based on task-specific contracts, going through several employees one after another. Sometimes, they even juggle several employees at once. They hand in excellent work, the arrangement expires, and they go on to the next contract.

This is the gig economy.

If making, hacking, and creating on the side isn’t enough for you, you may be thinking of taking your hobby legit. However, turning a hobby into a business isn’t just a matter of scaling up. Whether you’re selling creations, ideas, or services, here are three things you need to cut it in the business world.

A Platform
It doesn’t matter how awesome your products or services are if you don’t have a way to sell them. To monetize your hobby, you need a way to get the word out.

One option is selling through established marketplaces, including Etsy and Tindie. These platforms offer the benefit of already existing, so all you have to do is upload your information and list your items. However, with so many makers, crafters and DIYers using these marketplaces, it can be hard to stand out and find customers.

If you’re serious about your business, create an e-commerce website to list your wares. You can drive traffic and gain customers by marketing your business through social media, attending Maker Faires, and networking with your local maker community. Traditional marketing channels not doing it for you? Read Neil Patel’s guide to growth hacking for creative ways to expand your business.

Collaboration
Working from home has its limits. While a home office is great for focusing and cranking out work, it’s not the most creative environment. For exposure to new technologies and fresh ideas, seek a workspace you share with other makers.

Not only does co-working offices and maker spaces provide a place to work, but also these collaborative workspaces host events where you can learn, socialize and hear from leaders in the field. Make the right connection at a networking event and you can land yourself a partner for your newest project or an investor with a passion for your work. Collaborative workspaces expand your social capital and provide access to tools and technology that you might not be able to afford on your own.

To find a maker space in your area, check out the directory at Make.

Financial Savvy
The difference between a hobby and a business isn’t in how much time you commit to the pursuit. Rather, it’s all about how you handle the finances.

If you’re considered a business by the IRS, your business expenses are fully deductible. However, businesses have to check a few boxes, such as keeping financial records, paying estimated taxes and generating profit. You can learn more about the business-hobby distinction at The Simple Dollar.

You’ll need to keep financial records such as business expenses and income, receipts, invoices and inventory logs. How you maintain these records is up to you. While many small-business owners turn to software solutions like QuickBooks, when you’re first starting out, basic spreadsheets may be sufficient. However, some tech solutions are worth the effort.

Two apps that every new freelancer, side-gigger, or small-business owner should have in their pocket are a receipt-tracking app, and an invoicing app. A receipt app collects receipts in one place using pictures, so you’re not sorting through stacks of faded, crumpled receipts at tax time. An invoice app lets you send invoices right from your phone, so you can keep your business running on the go. More importantly, it makes it easy to see which invoices are outstanding so you don’t forget to get paid!

Turning a hobby into a successful enterprise is every maker’s dream. However, running a successful business requires more than passion and a great idea. If you want to see your dreams come to fruition, you need to pay just as much attention to these behind-the-scenes details as you do to the main attraction.

Article by Lucy Reed, lucy_reed@gigmine.co>The Gig Mine, http://gigmine.co/.

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