Most of us could use some extra money in our purses, whether it's for paying everyday bills or extra spending money for fun. Signing up for a second job isn't for everyone and can be difficult to fit into an already inflexible schedule. If you spend your free time engaging yourself in a hobby, why not try and turn it into a business? While turning a hobby into a business takes time and commitment, you're working around your own schedule and aren't constricted by someone else's hours. And if your business generates enough income, you may eventually be able to make it your primary job. Bankrate published this checklist of the 10 most important things to consider when thinking about taking your hobby to the next level.
- Determine if a market exists: Reading books, searching online, and getting involved in discussion forums can help you figure out if your hobby has a chance to make money in the real-world marketplace.
- Don't limit your market: Find out where your product is in demand and establish a presence there. Your product may not sell locally in a down economy, but may sell well in more affluent areas.
- Don't overlook mail order: If your customer base is geared toward people who may not be internet savvy, try reaching them via traditional mail.
- Test market your product beyond friends and family. Seek out sources that will give you honest feedback about your product or service to see how much appeal it really has.
- Don't waste money on high-priced marketing gimmicks. Utilize the internet and read books to acquire inexpensive marketing knowledge.
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- Price it right: Account for your time and overhead when setting a price to ensure you'll have sufficient resources to grow the business.
- Don't overlook the tax benefits: There are plenty of tax deductions available when you're self-employed and work from home. Consult a tax professional to see if you'd benefit from forming a business entity (partnership, limited liability company, S corp, or C corp).
- Don't barter, even when tempted: There can be nasty tax consequences to bartering. Instead, cultivate business relationships where you refer business to one another.
- Find a mentor: Most successful entrepreneurs have mentors, so find someone who has been in your shoes to show you the way.
- Network: Talk to others who share your interests, in person or online. As you learn, you will naturally become a resource for others.