Lots of would-be entrepreneurs dream about starting their own business. If you’ve been baking up a storm for school fundraisers or knitting hats and scarves for the whole neighborhood, you may have considered taking your part-time hobby to the next level and making it your full-time career.
But it takes a lot of courage, chutzpah, and capital to actually realize your entrepreneurial dreams, and that can feel overwhelming. Let’s break it down into manageable, concrete steps that you can take to turn your hobby into a business.
1. Find Your Market
The first step to starting any business is understanding the current landscape and determining where you’ll fit within it. This doesn’t have to be on a global scale; if you want to open a small bakery in your hometown, do your research about that area. Who would your clientele be? What kind of bakeries are there already, and what would you be offering that would be new and different? Are the existing businesses thriving or struggling to turn a profit?
Understanding what the day-to-day is like for similar businesses will allow you to understand if there’s space for your idea in the marketplace and what you can do to make your business stand out from the pack.
2. Chat With Potential Customers
Market research is a critical part of any business. If you’ve already been sharing the fruits of your labor with friends and family as a hobbyist, turn to those people for insight before launching your business. Ask them, if they had paid for the good or service, what do they think would be a reasonable cost? Gather data about their likelihood to come back to you again if you were to charge for the good or service the next time. And gather feedback on what you can do to improve your good or service before going pro.
3. Select a Name
Settling on the perfect name for your company can feel just as stressful as picking a name for your child. You’ll want to find a name that makes it clear what your business does, and one that is easy to remember and pronounce.
Once you’ve come up with a list of options, check out a domain registration site to see if your business’s name is available for your website. You should also check similar domain names to see if they’re available (and if they’re taken, to see what type of business is registered on that name). Sites like Weebly and GoDaddy will allow you to register your domain name and easily build your website.
4. Find a Legal and Financial Team
There are a lot of legal and financial considerations that come with taking your idea from hobby to profession. Even if you’re going to be a solopreneur, having a legal and financial advisor on hand to make sure you establish your business properly from the start is critical.
You should focus on hiring a lawyer and accountant who have specific expertise in your chosen field. These people can help you file your paperwork, navigate the process of legally establishing your business, and assist in setting up bookkeeping software and systems and processes that will keep your business’s activities easy to track.
5. Get Your Licenses And Establish Your Form
Your lawyer can help you to understand what you need to do to make your business “official,” but it most cases it will involve registering for a license with your state and city government. You’ll also want to ask your lawyer and accountant for input on selecting the best business entity for your business. You can choose to incorporate or to run your business as a sole proprietorship. Each type of business entity comes with its own cost and benefits, so you’ll want to gain professional insight into what makes the most sense for you.
6. Write Your Business Plan
After you’ve gathered input from your future customers and a team to help you understand your legal and financial hurdles, you can put together a solid, well-informed business plan. This plan wraps up all of the work you’ve done so far and should provide an outside reader with a sense of what your business is, how you expect to earn money, and what your financial projections are. It will come in handy if and when you need financing for your venture.
A business plan should be relatively short and sweet and should be a living document that you continue to refine as your business changes and grows. If you’ve never written a business plan before, there are lots of helpful tools out there. A site like Bplans provides you with sample plans and templates to get you off on the right foot.
7. Cover Your Costs
Starting a business can be costly, so you may have to look for external financial support to get things up and running. This startup cost calculator from Entrepreneur can give you a sense of how much money you’ll need to take you from hobbyist to business owner. If you don’t have the savings to get started on your own, consider crowdfunding through a site like Kickstarter, or turn to online lenders for additional support.
8. Kick Marketing Into High Gear
Once you’ve done all the behind-the-scenes work, you’re ready to share your business idea with the world and start procuring customers! Each business is different, so you’ll want to think about the marketing strategy that makes most sense for you. If you’re starting an online business, consider online marketing tools like Facebook ads, and make sure you establish a presence on social media. If you’re opening up a brick and mortar store, you may focus more on print materials, such as brochures and business cards, and taking out ads in the local papers to advertise your grand opening.
While it might seem daunting to take your favorite hobby from pastime to full-time occupation, it is possible! Creating a step-by-step plan for achieving this dream can make it all seem more manageable, and having the support of friends, family, and a few key experts can help you to reach your entrepreneurial goals.