While it can be distressing and overwhelming to lose a job, it’s important to remember that the situation is temporary and doors to new opportunities are likely to open. For many, job loss can even spark a positive turning point, such as entrepreneurship. Do you have a knack for scrapbooking, or do you enjoy tinkering with old cars? Hobbies like these are often the driving forces behind many profitable businesses. If you think you can turn your hobby into a career, it’s vital to invest your time into the proper planning and research before investing any of your money. Many new businesses fail because of poor market research, poor financial management and/or a lack of strategic planning. Motivation and passion alone are not enough to secure your financial future. If you’re considering the entrepreneurial leap, we’ve compiled a list of questions you should ask yourself beforehand:
Is your hobby business worthy?
Try to take an outsider’s perspective when evaluating whether your hobby is truly business worthy. Does your hobby help solve a problem, educate a segment of the population or fulfill an unmet need? Can you create a product that people can’t wait to get their hands on? There must be a need for your product or service in order to be successful.
Do you have sufficient time to run a business?
Many entrepreneurs underestimate the amount of time it takes to turn a hobby into a profitable business. If you have small children, will the 40-hour-plus work weeks be too taxing on family matters? Do you have other commitments – like school, aging parents or travel plans – that will absorb a large chunk of your time? Turning your hobby into a business will likely require many late nights and long weekends.
What kind of financial investment do you need?
Be realistic about how much money it will take to launch a business and know how much cash you need to invest at the front end. Being slightly pessimistic could be a good thing. You should assume that it will take more time, more money and more dedication than you think. Can you afford to turn your hobby into a career while unemployed? Do you have other income streams? If not, you may need to pursue another job in the immediate future and work on your hobby in your spare time.
Have you conducted market research?
Once you have determined that your hobby is business-worthy, you will need to conduct research and analyze competitors. Examine trends in your industry and study how other similar businesses have become successful. Will you be able to promote your product or service? Who will you promote it to?
Do you have a business plan?
A business plan will not only help you stay organized and focused, it can open up opportunities to potential investors. The Small Business Association has developed a business plan template you can follow. Developing a business plan is necessary step in deciding if you can turn your hobby into a career.