Strategy for Creatives: Business Minus the Bullshit

Is Your Hobby Business-Worthy?

January 04, 2022 Sasha - Business Strategist Season 1 Episode 13
Strategy for Creatives: Business Minus the Bullshit
Is Your Hobby Business-Worthy?
Show Notes Transcript

So you have a hobby that you're really good at. All your friends and family think you should turn that hobby into a business. In fact, you've probably heard all over social media how you need a side hustle and "multiple streams of income". But you genuinely don't know the first thing about running a business or if what you're doing makes a good business idea. There are (obviously) differences between running a business and having a hobby. And truthfully speaking, not every hobby needs to be a business - despite what your family and friends may think. Let's talk about the things you need to be thinking about if you're wondering if you should turn that hobby of yours into a money-making empire.

Episode Resources:
What's the Difference? Hobby vs. Business

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Sasha:

Welcome to Strategy for Creatives: Business Minus the Bullshit. Whether you're new in business or find yourself in a season of change, get ready to build a strategy, create an action plan and crush those goals. I'm Sasha, host a strategy for creatives. And I help female led businesses grow their brands in authentic, measurable and meaningful ways, without the stress. There's no sugar coated here, I'm serving up real tips and actionable steps you can take to help get you organized, get off the path to burnout and grow your brand like a boss. So go ahead, pull up a chair, grab a notepad, and let's talk business. Happy New Year, and welcome to a another episode of Strategy for

Creatives:

Business, Minus the Bullshit. I of course, am your host Sasha. And because it's a brand new year, 2022 is here, we're going to forget about all of the bad things that happened in 2021. And we're going to have a positive mindset going into the new year. But because it is a new year, I wanted to start a new series for the month of January, where I wanted to talk about how to set up businesses, right. all of the things that we should be thinking about, and planning for when we're starting our business. And so this, what I'm going to be talking about works for, if you are new in your business, if you haven't started your business, or even if you're already into your business, but you want to set up better organizational systems, maybe you don't have everything in place that you need. And so the month of January, we're going to be focused on that. And I'm going to start by talking about how to tell whether or not your hobby really needs to be a business. And I wanted to start this off, because I know that there are plenty of people with new year's resolutions who are all about trying to get a multiple stream of income, they want to turn that side hobby into a business all about the side hustle. And I just want to say that I commend you all for all of that. But there's a lot that goes into having a business and not every hobby needs to be a business. Not every person who has a hobby means that they are going to be good at business. And it's one thing that really frustrates me because I see so many people in so many Facebook groups that I'm in and Instagram pushing people to turn hobbies into businesses, when some people actually have no business owning a business. they have no business running a business, because they are just not wired that way. They need a lot of help And maybe that helps not available to them or they're just not good at business. And so I wanted to talk about how to tell whether or not your hobby should be a business, whether it's a good idea to step into that framework about whether or not you actually have the bandwidth to run a business. There's obviously a lot of differences between running a business and having a hobby. So despite what your family and friends may think there is something to think about when it comes to turning that hobby into a business. So here's what I want you to start asking yourself if you're considering as part of your users resolution, or just in general about turning a hobby into a business. Number one, ask yourself, What's the costs, right? If you ask any hobbyist out there, lots of hobbies are not cheap, I used to be really big into all sorts of DIY stuff. I was big into scrapbooking, I had a Cricut machine. I would like print stuff out on my Cricut and turn it to all sorts of things. It's not cheap, stuff like that is not cheap. And so most hobbies, especially creative ones, are expensive to keep up with. if you are knitting, it can be expensive. If you're trying to make products, it's expensive. Even if you're a photographer, where you're not necessarily providing a product, but it's a service, it's expensive to be a photographer for right, you have to have different types of lenses. And from my experience or my knowledge with photographer, friends, I know those things are not cheap. So it can be a challenge to have a hobby that's expensive and try to translate that into business. Scaling a hobby into a business can actually cost a lot more than what we think it does. And that's because of the price of things, what things costs. When you are having a hobby, you are probably going to a retail location. And you're probably using that as the basis of making your crafts right. if you're a knitter, for example, and you go to like Michael, JoAnn Fabrics, whatever you're going to, you're buying yarn, you're buying the fabric, you're buying whatever it is that you need to make your craft, you're paying retail costs. But when you are trying to turn that hobby into a business, and you're still paying retail costs, you're actually going to start cutting into the profit margin that you will make as a business. That's the reason why businesses buy things wholesale because there has to be some sort of profit margin there in order to start making money. And outside of the cost of making a business official, which I will always be advocate for. I'm a big, big proponent of making your business official As soon as you decide that you want it to be a business And I'm gonna talk about that in a second. But you probably need to start buying items in bulk if especially if you're starting a product based business. And that means probably having more than what you need to get started and the upfront costs are probably going to be a lot more than you're expecting. As an example, I used to sell products, I still sell products in the shop right now. And I buy a lot of things in bulk. One thing that I seell is mugs, and you can buy a mug without a design or anything like that for $2.50. But you have to buy like 50 of them., there's no one off where you can buy one mug for $2.50. Which means if I'm going to go into a business of selling mugs, I need to buy at least 50 mugs at $2.50 before I can even start selling anything and make a profit on it. So those upfront costs can be a lot more than what we think they are when it comes time to turn that hobby into a business. And I want to go back to what I just said about making your business official, a lot of people hesitate on making their business official when they are just starting out because they don't know if their business is going to be profitable. And while I understand that, I encourage people to make their business official as soon as they are in the mind frame that this is going to be a business and not a hobby. Because the mindset that we have between running a hobby and a business is very different. If we are going into it thinking that we're having a business, then we're going to be making business decisions. That means thinking about things like profit margin, thinking about how to attract customers, marketing, email, all of those things. If you're thinking about a hobby and maybe making some extra money on the side, your mindset is not going to be the same. you're not going to have the same type of thoughts about what it takes to run a business. And so even if you don't make money, it is okay. And I encourage you to make that business official. Because if you don't make money, that's all claimable on your taxes, your business can have a loss. In fact, most businesses, at least for the first five years do have losses. So it's okay to have a loss in your business. But I want to encourage you to make it official. So I also want you to think about when it comes to making that hobby into a business, how much you really know about what you're doing. Because having a business is a lot more than just being good at your craft. If you were to head on Etsy, right now, you would see literally 1000s of people making the same types of things. There are 1000s of photographers, coaches, designers, business strategists like myself, but what sets people apart? Do you know how to correctly market yourself? Are you priced correctly? Are you good at customer service? What's your marketing plan? having a business means that you need to not only be good at the craft that you have, but you need to be able to sell it as well. And selling is a unique skill. Not everyone is able to sell people can be wonderful artists, they can make beautiful works of art, they can be a bomb graphic designer making dope ass designs. that doesn't mean that they are good at selling. maybe they can't sell but maybe their pricing isn't good. And if you go back early in the season, I had an episode about pricing your work, because maybe they don't understand the market value, maybe they don't understand what they should be pricing, or what the market demands for their pricing. Or maybe they are out price or under price for their market. Maybe they're not good at customer service. If you don't like talking to people, if you're not are confrontation or don't really like confrontation, you might not be good at customer service, you might not be able to handle customer complaints or people leaving bad reviews. So you need to really think about how much you know when it comes to just your craft and how much you know about running a business. Now, that being said, there are many courses, platforms, people who can help you that you can pay for that can teach you how to run a business, but you have to be willing to learn those things. And it has to be something that you're going to invest in outside of your craft. I'm a big proponent of outsourcing. And it's for that reason. as business owners, we don't need to know everything, we need to know the overall way things function, not necessarily how things work. But it is important that you have that capability or that you're willing to outsource for the things you don't know or to at least learn about what you don't know so that way you can turn that hobby into a business if that's what you're trying to do. Another thing I want you to think about is whether or not you can teach. and some of you might be saying, well, I don't want to teach anything So why does that matter if I'm trying to make a business? Well, a lot of the ways that people upscale their business, is by teaching. some businesses some hobbies are inherently not scalable for what they are. For example, if you are a knitter or photographer, you only have a certain number of hours every day where you can physically work on that craft. You only have let's say as a photographer, you can only book four clients in a day, five clients in a day before one you're burnt out Or two, you're literally at capacity timewise. and so one of the ways that businesses level up, is to become a Coach or teacher in that field. essentially teaching others how to run the type of business that you have. But most people aren't good at teaching others how to do their craft. if you've been around a lot of people right now are really into coaching. And there are a ton of coaches out there. I talked about this again, on my episode about the difference between business strategist and coaches, and why I decided I wanted to be a strategist versus a coach. That field is saturated. And there are tons of coaches who are out there, who have quote, unquote, been able to scale their business, but have yet to help clients actually scale theirs. They may be able to book people and quote, coach people, but they aren't actually teaching people the things that they need to do in order to scale their business. There are plenty of photography coaches out there who are trying to teach photographers how to scale their business, but can't replicate what they've done in their own business with somebody else's. teaching requires a completely different skill set. And it takes you away further from the thing that you actually like, AKA your hobby. And so you might not want to go that route. And so that's something to think about when it comes to making a hobby or business. Would you mind teaching your hobby in the future? Is that something that you would be okay with? Or do you strictly want to stick to your craft? Is your craft scalable? Does it make sense that given time constraints, given the way we we only have 24 hours in a day? Is your hobby, something that you could do at a scale that will make you money. because money profit is why we start businesses. I know that that rubs people the wrong way. We all have various reasons why we start businesses, but the number one reason, not the why we start business. But the number one reason why businesses are started is to make money. the why can be something different, you can have a whole mission on your business. But if you're not making money in your business, you're not doing your business in a way that makes sense. I also want you to think about if you're ready to be a boss. a lot of people hate their nine to five, they'd much rather work for themselves. But running a business full time especially means that you are the one in charge. Are you ready to do everything, everything that comes with running a business. That means, marketing, competitor research, business planning, goal setting, accounting, website design, website upkeep, and so much more. That's on top of doing the work of the actual business itself. Some people think that having a business means only doing the craft, but there's so much more involved in running a business. Do you want to do all that? Are you ready to do all that? For some people, it's an easy transition for others, especially creatives, All of those not so fun parts, the not shiny parts aren't fun, and it can translate into a business that isn't successful. So really think about if you're ready to be a boss. And I don't mean just if you're ready to go full time in your businesses. most businesses aren't started full time they are started part time. But that doesn't mean that all of that work isn't necessary in order to grow your business. I myself do not have the intention of having a full time business. I like my day job, I'm fine with it. But I still have to do all of the things in my business that allow it to grow. I still send out marketing emails. I still have to do my website. I still have social media management. I do a podcast. there's so much that goes into a business that I still do even as a part time business owner, that people need to be aware of if you are considering starting a business. And lastly, I want you to think about whether or not you are prepared to hate your hobby. And I say that because having a business can take a lot of the fun, out of the hobbies that we have. For a lot of us hobbies are a way to relax. It's a way we express ourselves. And it's a way that we enjoy life. They aren't all meant to be turned into businesses. And a big possibility of turning your hobby into a business is losing the joy that you once had for the hobby or even worse, hating the hobby that you once Loved. the pressure to meet deadlines, make products make more clients do all of this and your hobby, Now business, while trying to make a profit can overtake any love that you had for a hobby. And it can make you hate it. So make sure that you love your hobby enough to ride all of the things that entrepreneurship brings with it. all of the ups and downs, the struggles, all of the business piece of it. make sure that you love that hobby enough and you are willing to do all of the hard work for it in order to turn it into a business. Now the reason why I wanted to do this episode is because again, there are lots of people who are going into the New Year wants to start a business and they don't know what that looks like. They don't know how they should start. A lot of them have hobbies, they have things that they've been told, maybe you've been told that you're good at, that you should do and make money off of it. But you're action item for today's episode is to go back and listen to the questions that I asked you and really sit down and think about if you are prepared to do those things that turn a hobby into a business. Have you researched what things cost If you want a product based business? Have you researched? what things cost If you want a product based business? Have you decided where you can get things wholesale? Do you have upfront capital in order to make purchases at a scale that makes sense when it comes to having a profit in your business? Do you have the capability to run a business? Are you good at marketing? Or do you know how to hire someone for marketing? Can you do all of the back end things that are required when running a business? Do you love your hobby enough to turn it into a business? Are you okay with the fact that you might not like your hobby after a while and still have it as a business. Now that doesn't mean you can't pivot? And I'll talk about that. In another episode. All businesses eventually change and turn into something else. But do you love your hobby enough right now, in order to do it on a way that's going to make you money? Could you see yourself teaching in your business? Could you see yourself teaching others in your business? Do you have the skills to actually teach others in your business? Or do you want your business to be solely what your craft is? I want you to think about those questions. Ask yourself those questions. So that way you can figure out and determine whether or not it makes sense for you and your lifestyle, to turn that hobby into a business. I say all of this to say not every hobby needs to be a business. Some things can be left for us to enjoy. the world and life is not meant to just make money. We are allowed to have hobbies, we are allowed to have things that relax us and take the stress away from life. But if you're thinking about having a business and you're thinking about turning that hobby into a business, make sure that you're asking yourself the right questions. So that way when you start down that road, your business will make sense. Are you ready to uplevel your business? Join the five day be your own CEO challenge. All the details are available on the website at www.by-sasha.com. If you liked what you heard, make sure you rate and review. It really helps other people find the show. And of course, following subscribe on your favorite podcast platforms. Want to follow me on social? I'm on Instagram and Facebook at Strategy By Sasha. Make sure you tune in next Tuesday for more business tips.