Starting a new business from scratch isn’t a quick and easy process, and success is by no means guaranteed as most start-ups will fold within 12 months. However, the temptation of taking an idea and evolving it into an effective, profitable company is too strong for some to resist.
The rewards for getting it right can be substantial, especially if the business is founded around a hobby of yours. In effect, you can earn a decent living wage doing something you enjoy and have full creative control over.
Is It Viable?
Just because you enjoy a particular hobby or pastime doesn’t mean it will work as a commercially viable business. Is there suitable interest to make it work, not only for the next few years but in the long-term also? A financially sound business plan needs to be in place before you get going. Without this, your company could be in trouble before it even gets off the ground.
For example, if you’re trying to sell personalized water paintings investigate how much similar items are selling for in shops and online; websites such as eBay and Etsy are good for this. You could also survey friends and members of the public how much they’d realistically pay for one.
With a figure in mind, do you have time and expertise to produce enough stock to make the business work? Will you actually enjoy turning this occasional hobby into something full-time as well as managing the commercial side of the business? Bear all these considerations in mind before you get going.
Starting up a new business takes money, time and commitment. After the initial research and planning phase you need to officially register the company with the relevant government department and tax authority.
There are many aspects to consider during this stage:
– Is your chosen business name and brand completely original? If this isn’t the case, then other companies may choose to take action against you.
– Will you be registered as self-employed or limited company? This requires deeper investigation and will have tax implications down the line.
– Do you have the correct insurance in place? Depending on what sort of business is being set up, there are different insurance policies available from specialist brokers to larger trade associations.
– Are you compliant with all the legal requirements? Certain industries require you to satisfy regulation areas such as licensing, health & safety and data protection. For example, storing client’s personal details on your database should comply with data protection laws.
– Do you have the financial means in place? Of course, there are many aspects to a new business which require financing. Managing cash flow is perhaps the most important part of a company. Do not stretch beyond your means and keep costs as low as possible.
Setting up a new business requires a great deal of character and resilience. However, with sufficient market research and a sound financial plan in place, turning your hobby into a money-making business can progress into the perfect lifestyle.
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Feature image credit: Scott Beale via Flickr