Wednesday, 29 August 2012

Converting Your Hobby Into a Business

Converting Your Hobby Into a Business


By Catherine Delcin

Hobbies are a matter of national interest. At some point in our lives, most of us have maintained an interest in an activity outside the workplace, a hobby. They fall across a wide range of spectrum of activities. The interest in the activity pursued as a hobby is generally due to the passion or the fruit of the pursuit, not pecuniary gain. On average, people spend 1.3 to 1.7 hours per day on their hobbies.

Depending on the level of devotion a person has to a particular hobby, it can be easily be converted into a profitable business. Turning a hobby into a business is one of the best ways to create a profitable business because of the combined passion for the activity and the potential for establishing an income stream. Do you recall the last time you were excited to wake up and go to work? If that was ions ago, maybe now is the time to consider turning one of your hobbies into a business. Follow these steps to evaluate whether a particular hobby is worthy of being converted.

Value Skill Set or Knowledge Base

The valuation of the skill set involved will allow you to decipher whether you have enough of vested interest to pursue this particular hobby as a business venture. Depending on the activity involved you need to consider one of two prongs: (1) Knowledge Base and (2) Skill Level. For hobbies in the first category, the valuation is focused on the dedication to the activity as it provides an extensive knowledge base. For example, someone who collects rare stamps does not necessarily require a specific skill set. However, the dedication in collecting the rare finds may grant a certain status of connoisseur. Some of the hobbies that may fall in the latter category may include cooking, dancing or singing. The assessment for these hobbies will be skilled based on a scale of 1 to 10.

It is important to be honest with yourself in the valuation process. This should not be seen as an opportunity to turn "the thing that were never good at", but chose to do anyway into a business. Now, let's put it to the test. Grab a pen and pad, list all your hobbies and number them accordingly. From this list, create a second list. This time enumerate the hobbies in the order of the Skill Level. For knowledge base hobbies, consider this example as guideline. Suppose John collects baseball cards and stamps. In order to properly evaluate, John would count the number of cards collected in each category. The number of items collected will be indicative of his skill and familiarity with authentic baseball cards or stamps. If John has 10 unique stamps compared to 500 baseball cards. Collecting baseball cards will be No. 1 on the list and collecting stamps will be No. 2.

Value Time Spent

The Second step is understanding how much time is spent on each hobby. This will include time spent participating in the hobby, as well preparation time and any other time spent promoting and promulgating that interest. The time spent will also allow you to gauge your dedication to each hobby proportionately. This may require you to take some time to figure out how much time you routinely spend per activity. Once you have an accounting of time spent, you are now ready to go back to the second list you made based on the Skill Set valuation. Now, next to each hobby write down the time spent. You may notice that you spend more time on the hobby that is near the top of list. If that is the case, it may be a confirmation that you correctly valued your skill set because people tend to spend more time on activities that reinforces their self-esteem.

Evaluate Market Need and potential for income

All that valuation is great, but none of that will mean anything if there isn't a need in the targeted market. Generally, most of us must abide by the law of supply and demand. In very rare case, some people are able to create their own market opening. The ultimate question you must ask for each hobby on the list is: whether there a market need for this as business opportunity? Specifically, you need to consider this thought: "if I convert___________hobby into a business, who would be my consumer and why would this person want this service?" After coming up with realistic answers for each hobby, you will create your third and final list. Reviewing the hobbies on list No. 2, you will create a new list, numbering all the hobbies based potential for income with No. 1 being the most promising idea. From this final list you should come out with your highest skilled hobby on which you possibly spend most of your time with a market opening and good potential for income.

Convert Leisure activity to Profit

After narrowing down the ideal hobby to convert, you are ready to cash it in as your personal piggy bank. You will do that by increasing time spent, amount of money vested and relabeling that activity as a business for profit. The time spent may be increased gradually over time or may be dramatic depending on the hobby. For example, John may decide to create a consignor shop that sells baseball cards or an online business that allows collectors to bid on rare cards. Either scenario will require spending additional money and time. The relabeling of the activity is very important. Since collecting cards is no longer a leisure activity, when john finds a rare card that his friend Joe has been after for years, he cannot give it to his friend for $20 bucks. John's mind must shit towards profit by selling that rare find to the highest bidder

After converting your hobby into a business, you should be well on your way to success. Be certain not lose the passion that drove your interest in the first place, that enthusiasm will always give you an edge over other businesses. For those, who had no specific hobbies or could not find anything on the list to convert, consider taking some classes at a local education center for anything that has been an interest. It is never too late to pursue a hobby. Once you have a good list of hobbies that you routinely partake in. Maybe then, you can consider converting one of them into a business.

Catherine works as a business consultant empowering entrepreneurs with the necessary tools and resources to bring their entrepreneurial aspiration to success. She holds Juris Doctorate degree of law specializing in Business and has extensive experience with all aspects of business formation. Connect with Catherine at Catherine.delcin@gmail.com, or connect with her on Twitter at http://twitter.com/CatherineDelcin.


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