It’s every fledgling entrepreneur’s dream: turning something that you love doing into a worthwhile enterprise that helps you pay the bills and with a little luck, perhaps something a bit more.
Whether it’s selling those handcrafted scarves on Etsy or turning your blog into a business, here are a few things to consider before you take the leap:
Is there a market? Make sure that your product actually solves a problem that a potential customer indeed has. Assess who your customer might be and even conduct some interviews with your potential customer. Dig into the problems they might have and see how you can carve out a unique value proposition for your business. If there is no problem to solve or if there isn’t something compelling or remarkable about your product or service, you do not have a business.
Do you actually want to turn your hobby into a business? Think about why you love making those cupcakes or knitting those scarves. You might love doing them all-day and everyday, but when you turn them into an actual business, you’ll be turning your love into a lifeline. Is this what you actually want to do?
It’s at this point that you may decide to create something that resembles a business, but is in actual fact a hobby. You might enjoy selling your famous jam online and at farmers’ markets, but still want to keep it small and for fun. Nothing at all wrong with that and it will guide you when it comes to how far you actually want to go with your enterprise.
Are you ready to be a business? Once you’ve decided that you’re going to move your hobby into a business, treat it like one. Create a business plan, including a marketing and financial plan. Get in touch with professionals like an accountant or lawyer. Make sure you’ve set yourself up as a legal entity like a sole proprietorship or corporation.
Are you prepared to learn things that you don’t know? As the chief person-in-charge, you’re now responsible for overseeing everything having to do with your business and to do so this requires time, money or frequently both. How will you get the skills you need to learn what you don’t know? Even if you hire these skills out, you’ll still need to brush up on some basic knowledge so you can effectively communicate with your consultant or employees.
Are you prepared to do things you don’t enjoy doing? You might hate sales or bookkeeping. Guess what: these are tasks that are now part of your business. While you might be able to hire out to people who can perform these tasks for you, there will still be tasks that you would not classify as “making your heart sing.”
Do you have capital? Starting any business requires money. Do you have the necessary money it takes to get you up and running until your business can fund itself? If you aren’t ready to put money behind your business idea – or “skin in the game” – then you’ll need to assess how confident you are in the business in the first place. If you need more money than you have available, consider getting a loan or finding an investor.
While passion is the first step into entrepreneurship, really creating a business from that passion takes a little extra work. With these thoughts in mind, and when you are sure you want to proceed, you will be well on your way to success.