There are more than 30 million small businesses in the United States. Even after you add the “big guys” – those businesses making up the rankings of Fortune 500 – it still means that small businesses represent 99.9 percent of all the businesses in America.
Ask, and you’ll discover that a surprising number of these small businesses started out as someone’s hobby. It’s because many hobbies can be monetized and turned into businesses. Your hobby could be a business as long as it provides value to others.
What’s Your Goal?
Don’t quit your day job. At least not yet. The first thing you’ll want to do is give some thought to what you want to accomplish. Some people are just looking for extra cash, so it may just be a matter of researching what you’ll need to do to bridge your hobby with the platform of a small business. Online platforms like Etsy are excellent choices to help you showcase your product or service.
It’s important to explore the consequences of success. Be sure to ask yourself if you’ll still enjoy your hobby if it becomes your full-time job. Doing it for yourself is different than doing it for others. As a hobby, you can work on what you create when you feel like it. Converting it to a business adds obligations that can’t be set aside. You’ll have to juggle what some would consider to be “non-creative” responsibilities, too – like finances and marketing.
Adopting the Business Mindset
We often associate a hobby with leisure. It’s something we do because it helps us relax or gives us personal satisfaction. In a perfect world, your job should offer these benefits, as well. Turning your hobby into a business means you’ve got to treat it like a job. You’ll have to devote time to training to determine what it’ll take to make a profit.
For example, the IRS is clear on what they believe is a hobby versus a business. The IRS will only allow you to claim losses on a business for three out of five tax years. If you’re unable to show that your business was profitable, the IRS can prohibit you from claiming business losses on your taxes. They’re basically telling you it’s not a business. It’s a hobby.
Where Will Your New Business Live?
Turning a hobby into a business requires you to be certain of your expenses. Monetizing what you make is only half of the equation. A growing number of small businesses are discovering the benefits of establishing themselves in prefabricated metal and steel buildings. They cost significantly less than traditional construction and can be put up five times faster. Their engineered design allows for future expansion, and options for both the exterior and interior let you create a custom building you’ll be proud to make the home of your new business. Use this form to tell us how you plan to use your building. We’ll send you free information based on your area and needs.