You have made cakes for family and friends, you are quite good at creating logos and graphics and maybe you make jewellery to give as Christmas presents. These, along with many more activities are what people often want to take to the next step and make some money from it while working from home. The aim of this article is to show you how to begin the process.
There are many reasons why people want to work from home, to add a little to the monthly income, perhaps as a starter to gauge market interest before leaving the full time or just because you have a few hours spare per day while the kids are at school. The reasons really don’t matter, what does, is that you are ready to take the step to make money from what was a hobby.
But how do you take this step? Is there a market for your goods? Where do you sell your stock? How should you advertise? How do I create a business plan? Below is a guide of the things you should think about to set you on your path.
Step One: Researching You Idea
So what do I mean by researching your idea? Well, you need to know if there really is a market for your new business. But of course there is… Your selling to your friends already aren’t you? Of course your friends and family are perhaps your first customer base, and a valuable one at that, they will hopefully support you in your new mission. However, you need to think a little further than friends and family if you want to know if your business has a chance of success. Before you take the sometimes ‘kind’ advice from friends who tell you that your new ‘sproget’ is the best idea since sliced bread and you run off to place an order to make 100,000 maybe you should ask someone who is not so biased. So, how do you research?
Who are your competition? Google your idea and check eBay. You will probably find others, sometimes many others who are doing the same business as you. Don’t let this put you off… It shows that there is a market for your product.
Can you do it better than your competition. Lower price, better quality, better service.
Find a niche. Where will your products stand out or target a small and maybe specialised are of the market.
Do the numbers. You need to work out how much to charge to make a profit. Materials, your time, postage, don’t forget to factor in things like electricity, it all adds up.
Step Two: Are You Ready to Run a Business?
An important step in running the business is being honest with yourself. Enjoying baking a cake every other weekend for friends is different to doing it as a business and you should think about things like…
Can you sell? Most businesses involve sales of some sort and this includes selling through the likes of eBay, or maybe at your local boot sales etc. While this can be fun, it can also bring lots of rejection. Can you deal with this?
Your Hobby is no Longer a Hobby: As your business grows you will be working longer hours, dealing with things like accounts etc and the fun factor of your hobby may well become a thing of the past.
Family Life: The flexibility that your hobby gave, working when you wanted and fitting around family life may become a thing of the past. You will probably be working longer hours and like many self employed people you will need to be able to balance both your work life and your home life.
Some of the above may seem harsh. And the reality is that running your own business can be hard. It would be wrong of me to tell you it is all flowers and sunshine, It isn’t. But the items above can be managed and you don’t need to be a slave to your business. I just want you think about these things before you take the leap.
Step Three: Write a Business Plan
I don’t want you to panic here. I’m not suggesting that you run off to write a 500 page document giving every detail of your business with the aim of raising finance… That makes me break out in a sweat. However, a business plan is simply a map. It puts down on paper where you are now… where you want to be… and how you plan to get there.
To start, no one else but you may ever see the plan but it can be useful to give you a guide, to make sure you are doing what you planned. It will be your estimate of starting costs, your running costs and the most exciting bit, how much profit you hope to make!!
The business plan can run from 1 to 5 years but it isn’t set in stone. You may well need to make changes and that’s fine but it will address questions such as
How much money do I need to start up?
How long will it be before I make profit?
How will the business look like in the future?
This is the end of part one, take a look at ‘Turn Your Hobby Into a Home Business (Part 2)’