7 Questions to Ask Before Turning Your Hobby Into a Business

Have you ever thought about turning your hobby into a business? Maybe you love building furniture or crocheting beautiful blankets. Or, you love doing needlepoint or calligraphy. If you’re like many hobbyists, you do what you do because you love creativity and showing off your projects. But, after a while, you run out of room for all your materials and finished projects. Even your friends can’t use any more handmade gifts, not to mention the expense of buying all the materials and tools you need for your projects. If so, maybe you considered selling your projects at a local farmer’s market or even creating an online store as a means to turn your hobby into a business. Well, today, we’ll discuss the ins and outs of doing that so you can determine if you should take this important and risky step. So, read on!

As a hobbyist, the first step in selling your crafts, whether it’s a full-time endeavor or a side hustle, is a significant one. Understanding the business aspects and what it takes to make this venture a success is not just crucial; it’s empowering. This knowledge will prevent wasted effort and increased expense while equipping you with the confidence to navigate the professional world.

If you’re considering taking the next step as a hobbyist and want to determine whether you have what it takes to turn your hobby into a business, ask yourself these questions to help you make the right choice.

Turning a hobby into a business: 7 questions

Do you love it?

There is a massive difference between doing your hobby for fun and relying on what you do for an income. There is nothing that can suck the fun from something as much as needing to do it and being forced to do it when you don’t feel like it. Before you decide to sell your crafts or other projects, you need to be confident that you can produce on a suitable delivery schedule and that you have the dedication to do so even when you don’t want to. Once you promise customers a delivery date, you must set aside other tasks and coordinate other orders to deliver on your promise.

Forcing yourself to perform tasks can quickly take the fun out of something you usually enjoy. Plus, once you put the effort into building your brand and a steady stream of customers, you really can’t afford just to quit. So, ask yourself if you love your hobby enough to continue doing it over the long run.

Is there demand?

Is there sufficient demand for the projects you do to ensure it’s a viable business idea? Do some research before committing yourself to the venture.

• Are there other businesses out there doing what you do?
• How does the quality of your projects compare to your competition?
• Do you offer something unique that your competition doesn’t?
• What prices are people paying for similar projects?
• What are the turnaround times offered by the competition?
• Are your competitors selling on other platforms or locally at farmers’ markets or craft fairs?
• Can you estimate how much volume you can expect to sell? Is it enough to fund the expenses you’ll likely incur?
• How does the economy look for the foreseeable future? Will this impact your potential revenue?
• Are there legal restrictions to consider? For instance, many localities don’t allow cooking in a residence when you sell the output.

The answers to these questions will help you decide whether it’s worthwhile to consider turning your hobby into a business.

Can you manage the business aspects?

A business involves more than a hobby does. You’ll have to keep accurate records not only for tax purposes but for planning. For instance, you must understand the amount of profit you earn from each item to ensure you’re covering your other expenses.

You’ll also need some marketing fundamentals. For instance, do you have the skills necessary to create a website and social media to market your products? Without marketing, it’s unlikely you can turn a profit.

Project management, inventory management, and scheduling are other necessary skills. If your business is successful, you’ll likely have to juggle multiple projects to meet delivery promises. Tying up too much money in inventory can quickly sink your business.

You’ll need to jump through some legal hoops, such as obtaining a business license and tax ID number to collect sales tax.

Especially in the beginning, you can’t afford to hire others to fill your skills gaps, so learning how to manage the business aspects is your first step in turning your hobby into a business.

Do you have the right equipment for increased production?

Having the right equipment is crucial, especially if you experience a sudden influx of orders. Fulfilling orders in a timely manner or providing a realistic lead time is essential for customer satisfaction and maintaining a positive reputation.

It would help if you had the right equipment to scale what you do, make it easier to work at speed, or produce more items with less effort. The equipment you need will depend on the type of projects you produce or the items you create. However, understanding what is available and how to utilize it efficiently will help you scale your business as demand increases without missing promised delivery dates. For instance, you might need professional woodworking tools if you build furniture for customers rather than as a hobby.

Can you afford supplies?

You’ll need to find supplies and/or equipment to set up your business and this costs money. While you might not get orders instantly, you may want to create examples to share on social media to show people exactly what you do. This means you will need to be able to afford to buy supplies to get rolling before you see any orders or revenue. While you can likely find free online resources like free SVG files for Cricut machines, not everything is free. Also, you can’t turn out a quality product without good quality supplies and the right tools, so expect to pay for these inputs.

For most hobbyists, you likely have some of these supplies and tools already, so you’re set in the beginning. However, if you do not get paid until the customer receives their items, i.e., if you’re selling via a platform that withholds payments until orders are fulfilled or one that charges a commission, you need the resources to purchase your supplies until you have a steady income from your new side hustle or full-time business.

How will you sell?

There are multiple ways to sell your crafts, but you need to decide what is best for you. Will you be selling directly via social media? Or do you want a website that you will use as an e-commerce hub? Either way, you’ll need some marketing to send customers to your preferred selling platforms.

Is selling via sites such as Etsy or eBay right for you? Remember that these platforms charge a commission that will increase your price or reduce your profits.

Are you also planning to sell directly to local customers via a craft fair or farmer’s market? If so, you need to explore options for these local events.

How you sell is just as important as what you sell and can massively impact your success, so you need to think carefully about how and where you sell and the costs involved. Etsy will take a portion of your sales. At the same time, a website requires you to pay for hosting, payment gateways, a PayPal fee if you accept PayPal payments, domain names, and more, which all can add up to a considerable expense before you even get up and running.

Do you have time?

Whether a side hustle or a full-time business, turning your hobby into a business requires a lot of time. Just as with your materials and tools, you can’t skimp on this, as you’ll start getting customer complaints. Add to this time sink the fact that you must do more than simply produce projects to satisfy orders. There’s marketing, advertising, dealing with customers, shipping, bookkeeping, and more. If you create a business, you want to deliver on promises and only send out the highest quality work, and this means you need to take your time to get things right. If you are doing this full-time, you must juggle family time or other interests with your growing business. Time is a massive consideration when starting your craft business, as being a business owner or running a side hustle can be extremely time-consuming, and you need to be aware of this fact.

Conclusion

Taking your crafting from hobby to business is a big step; however, it’s not impossible to make the jump. But you do need to be prepared for what lies ahead, and asking yourself these six questions can help you prepare.

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