How do you know that you can turn what you love into a profitable project?
In this article we tell you what is required of you personally and what exactly you need to do to scale your favorite business into a successful business.
Hobby is passion. You do it out of love, not coercion. You upgrade and become a real expert because you are sincerely passionate. Moreover, many hobbies cost serious money. This is in addition to the time and effort spent. Why not try to recoup your investment?
“Find something you love and you’ll never have to work a day in your life” – well, that’s all. We've heard this in different variations a million times. It seems that in an age when you can monetize anything, even selling your bath water, there really shouldn’t be any problems. You just take and scale your hobby into a full-fledged business. These thoughts seem especially tempting when the current work has turned into a hopeless routine.
But, of course, in reality everything will be much more complicated. If a hobby is a passion, then business requires calculation and a cool head. It is important to assess risks and responsibilities in advance. So, within the framework of this article, let’s go over several points together to understand How compatible are you, your hobby and the world of business?
Let's look at three questions:
→ What qualities do you need to have to become a successful businessman?
→ On what principles is a profitable business built?
→ What needs to be done to turn a hobby into a business?
Five personal qualities of an entrepreneur without which it will be difficult for you in business
Business is self-realization, freedom, helping people and many other cool opportunities. But this is also a difficult competitive environment, constant stress and strict deadlines. This is a lot of different indicators and numbers that you need to keep track of so as not to drown.
Running even a small business requires certain skills that are not needed as part of a hobby. They can be mastered along the way, by getting the hang of it and learning the hard way. Or you can prepare before the start. Check it out How well do you meet the following criteria? and do you recognize yourself in them ↴
✅ Communication skills
Business is about relationships. You need to constantly work on them. That's why you will have to communicate a lot: with colleagues, partners, clients, competitors. And we are not talking about small-talk, but about full-fledged business communication, which should bring results. Sales, searching for investors, concluding contracts, resolving conflicts – necessary everywhere be able to negotiate And defend one's interests.
✅ Flexibility and adaptability
In the business environment, reality often diverges even from well-thought-out plans. And especially lately. Therefore you shouldn't scare or make you nervous prospect of changing conditions, in which you will have to develop your business. Up to a sharp change in the format of the business itself.
✅ Organized
“Why are there only 24 hours in a day?” – this is a question not from a children's encyclopedia, but from the mind of almost any businessman. There is absolutely not enough time for everything. So being able to set priorities, follow a schedule, and meet deadlines is important both for the development of your business and for maintaining your health.
✅ Determination
Shifting responsibility to the boss will not work. Otherwise it will turn out like in that meme with Spider-Man pointing at himself. In critical situations, the team will look at you as a leader who knows what to do. So you need to be able to act quickly And with no doubt. Even if you don't understand what's going on at all.
✅ Financial literacy
How many different numbers you will have to see and understand: EBITDA, cash flow forecasts, profitability… So that’s why mathematics was needed at school! The prospect of accounting rarely excites those who think about their business. Of course, everything can be delegated. But figure it out at least in the basics of financial accounting definitely necessary. Otherwise, you may be left with nothing.
Did you find out, do you agree?
The list above is far from complete. And, of course, no one will examine you for compliance with it before you release your project to the market. But business in Russia has its own characteristics. The points above were suffered by previous generations of entrepreneurs, practically written in their blood. So without most of these qualities it will be difficult for you.
The good news is that everything can be learned. Or find business partners whose personal qualities will help compensate for your lack of them. If there are no such people in your immediate environment, networking will help.
So, with the right approach, even a taciturn introvert can start his own successful business. If only there was a counterweight in the leadership.
What does a business that grew out of a hobby need to become successful?
We have sorted out the personality criteria of an entrepreneur. The next question is: what exactly makes a business profitable and a product in demand in the market? For example, as a hobby, you can bake cool cakes that will fly among your friends in seconds. You may also have all the necessary qualities of a successful businessman. But will this be enough when you scale your project to a full-fledged bakery?
In order for a successful hobby to turn into a profitable business, you need to take into account several more important components ↴
✅ Product-market fit
It's also called Product-Market Fit. This is one of the key indicators that indicates the audience’s interest in your product or service. In simple terms, you need to give people what they need, when they need it. Ideally, offer something that your competitors don’t have. When you fit the market clients are ready Not only to pay for the product, but also actively recommend to his friends. The quality of your offer itself helps your business grow and earn more.
In order not to miss with Product-Market Fit, you need to research the market and the needs of the target audience. This should be a full-fledged marketing analysis, and not fortune-telling using coffee grounds or a tarot reading. If you don’t have a portrait of your target audience and an understanding of their pain, then even a great proposal risks failure because it won’t meet the request of a specific market.
✅ Planning
A plan is not needed if you are doing something for yourself or loved ones. But as soon as you reach a wide audience, then chaos in doing business quickly will end in failure. A well-thought-out business plan should contain an analysis of operational processes, distribution of areas of responsibility, marketing strategy, income and expense forecasts.
This way you will set priorities, distribute your resources and minimize possible losses. Well, in general you will understand what and why you are doing. A comparison of plan with reality in the future it will help you quickly find and correct bottlenecks in your project.
✅ Marketing strategy
The slogan “Advertising is the engine of trade” is known to everyone and seems obvious. But surprisingly, many people decide to save on marketing at the very startWhen promotion is especially needed strongly. Of course, you can point your finger at the sky or somewhere else and accidentally hit your target audience. Yes, it’s so accurate that word of mouth will earn better than any real one. But this is extremely unlikely.
In reality, even the coolest product that has no competitors in its niche will have to wade through the general viscous fog of information noise. A competent marketing strategy, like a powerful lantern, will illuminate the path on which your product and its customers will meet. And its absence will lead to the fact that with a high probability you will get lost in this fog, irretrievably losing your already limited resources.
✅ Financial stability
A business can be developed exclusively at its own expense, using a bootstrapping strategy. Or attract external financing, taking on all the risks before creditors. Therefore it is important decide in advance where it will be your business take capital for growth and development.
Plus, unforeseen factors may intervene, such as the need to buy new equipment to replace broken ones. Or insure yourself if problems arise with suppliers. The less uncertainty you have around finances, the more predictable the success of your business will be.
✅ Legal support
Individual Entrepreneur, JSC or LLC? The choice of a specific form of legal entity affects the how much taxes you will have to pay, what the constituent documents will look like, who will make key decisions, etc. If you have business partners, then the right step would be to draw up with them an analogue of a marriage agreement. Indicate in it everything that worries you, and think in advance about options for resolving controversial situations, even hypothetical ones. The brand's reputation will be at stake, so it's better to play it safe and don't take anyone's word for it. Even for parents, anything can happen.
Subtotal
Personal qualities can still be improved in the process or compensated at the expense of business partners. But here’s a mistake with the target audience, lack of a sane marketing strategy, chaos in financial and legal matters they will bury your business with a probability close to 100%. If you feel that you can’t do it alone, then don’t be afraid to ask for advice from more experienced entrepreneurs from a field close to you.
Register on online networking platforms, participate in person in business clubs, or attend lectures. Those who have already taken their hobby to a new level and learned how to make good money from it will be able to become a full-fledged mentor for you. They will tell you where the rakes are placed and how to get around them. It’s better to get a little steamy at the start and get ready, than to burn out and burn out, practically without breaking out.
What you need to turn a hobby into a business and start making money: a checklist
Let’s summarize, systematize and condense our recommendations into a short guide. You get bored with your boring job, but you still have favorite hobby and you periodically think about turn his into your life's work? Here are the tactics you should follow to achieve success:
→ Research the market and target audience
This way you will understand whether your product will be in demand and what can be improved to definitely get into the hearts of potential buyers.
→ Create a business plan
Goals, strategies, budgets, marketing – try to think through all your steps, write down your areas of responsibility and set approximate deadlines for achieving the first results.
→ Decide on sources of financing
In the first couple of years, you will work for your business, and not vice versa. Therefore, calculate how much money you will need to start and where you can get it from.
→ Get everything legal
You can’t leave everything to chance and build a business solely on trust. If you are building something seriously, you need to draw up documents and formalize responsibility.
→ Deal with accounting
Breathe-exhale and get to work. All this is not so fun, but it is definitely very necessary. Install systems for tracking income and expenses so that not a single penny flies past the cash register.
→ Upgrade yourself
This point is generally worth mentioning separately, because you will have to study constantly. Find yourself a strong environment, a mentor and reach for the stars until you become one of them. But this will not be a reason to stop.
Business is the path. Just take the first step
Jeff Bezos started selling books and came up with Amazon because he loved to read. Nick Woodman invented the GoPro camera, and then the company of the same name, because he loved surfing and filming his rides. And even the tech giant Apple grew out of the hobby of its creators, Wozniak and Jobs, who met in a club of computer enthusiasts.
These are several examples of top companies, and very different ones, the basis for the emergence of which was some kind of passion of their creators. None of them could predict where this would all ultimately lead. One could recall hundreds and thousands of other inspiring examples of businesses that grew out of a hobby. But our thought is already clear: then, what do you like more than anything else, can make you millions.
These are not infogypsy mantras, but reality. The main thing is to approach everything with intelligence and a clear plan, even if improvisation is your everything. Study your target audience and their needs, critically evaluate your capabilities, and be flexible. The creative economy gives you the opportunity to realize yourself in almost any field.
Of course, even with the best possible approach, you will need luck. But lucky is the one who is lucky. So go for it.
If you want to read more, check out our tg channel “How’s business?”, and to watch interesting videos about business and the development of startups, go to our YouTube channel of the same name.
