Is Your Hobby Really Made To Become A Business?
Ontario accountant Brian Allward turned his love of Elvis Presley into a global memorabilia business based in the appropriately named King City. In Burnaby, B.C., new mom Sandra Wilson transformed a pair of non-slip shoes she’d sewn for her infant son Robert into a full-time business called Robeez Footwear. And my brother opened his own bookshop after Mom told him to get his darn book collection out of the house before the bedroom floor collapsed.
Businesses big and small can grow out of simple pastimes. But do hobbyists make good entrepreneurs? Can people who are passionate about Elvis, sewing or old books become excited about marketing and cash flow?It all depends on attitude. If entrepreneurs can subordinate their love of the hobby to the needs of the business, their energy and passion can go a long way. But you have to start making decisions with your head instead of your heart.
“The easiest way to work it out is to calculate how much money you need to earn in order to profitably leave your job,” says Andrew Patricio, a partner with BizLaunch.ca, a Toronto-based training company that coaches entrepreneurs across Canada. “That will help you decide if it’s doable.”
Patricio’s formula involves totaling your business costs and personal expenses. “Divide those expenses by your profit margin and you’ll get your break-even revenues.” If you need to net $100,000 a year, for instance, and your industry’s standard profit margin is 20%, then you will need annual revenues of $500,000 ($100,000 divided by 20%) to meet your target. Are you confident you can move that much product?
If the answer is yes, you still have to decide if this is something you really want to do. “Are you going to be as much in love with this hobby as a business as you’re in love with it as a hobby?”asks Bridget Field, an information officer with Small Business BC in Vancouver. If you’re a craftsmaker who enjoys making one-off earrings or gourmet muffins, will you still be happy churning them out by the bucketful?
Photo from Dawn Endico.
Jaclyn on December 3rd, 2008 12:58 pm
I think that depending on the hobby…it can most definitely prove to be a great business for someone. Like this one for example….Elvis….that will always’ be a long time love of whom ever. I am only in my twenties and i love elvis. Granted…some hobbies may not take off as well…but there’s no harm in trying it out.
cassy on December 3rd, 2008 4:20 pm
my hobby is cooking, and im planning to make is as a good business,because its really my heart and soul to cook, its my passion.
SEO Software on December 3rd, 2008 4:57 pm
This reminds me of a book called “The E-Myth Revisited.” I’d recommend that anyone thinking about launching their own startup read this book first…it presents a lot of the realities that one must consider before starting.
Antti @ halpalennot on December 4th, 2008 7:29 am
I would also recommend E-myth revisited.
Still, motives for becoming an entrepreneur vary and often entrepreneurs (especially craftsmen/artists) are willing to compromise profitability for freedom/creativity.
I believe it’s not about whether your business is based on your hobby or not as long as you enjoy what you’re doing.
Baker on December 14th, 2008 11:18 am
Great Post! It really does all depend on attitude. You must cultivate this attitude that nothing is going to stop you from your goal.
home based business on December 14th, 2008 4:11 pm
I read the E-myth books as well. I read them while building a traditional business in Michigan.The book really shines a light on what business really is and how it must be looked at to produce long term results. I think turning a hobby into a business could be a good way to loose a hobby.
Baker on December 15th, 2008 4:44 pm
I liked this post so much that this is my second time reading it! :)
Great content.
+Baker
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