Engaging in a hobby can be a relaxing and rewarding way to spend leisure time. Those who utilize their talents to create often make beautiful, useful, or even tasty things for which others are willing to pay. That can turn a hobby into a tidy side hustle, bringing in some extra cash. Hobbyists may not ever be able to quit their day job and support themselves with the proceeds of selling the products of their hobby, but it can certainly add some money to the coffers while providing a relaxing and creative outlet.
Do you have a hobby you’d be interested in turning into a money-making side business? Many people have. If you are one of them, then look through these tips to help you make it happen:
Research demand - Begin by doing a little “market research” to figure out who might buy what you make. Have people told you they’re crazy for your homemade scented soaps or candies? If you give your knitted scarves as gifts, what types of reactions do you get from the recipients? Ask friends how much they would consider paying for the items you make - the answers will inform and may surprise you.
Determine a marketing strategy - It’s a good idea to locate some places at which to sell your products before you make a bunch you can’t unload. Research some means by which to sell your handcrafted items. Arts and craft fairs? Via a website? At a local boutique or specialty shop? Consider the costs associated with these means of selling (entry or consignment fees or website creation and administration costs) and figure them into your expenses.
You’ll also want to figure out how much to sell your goods. For tangible goods, sites like eBay.com or etsy.com will give you some ideas on how much you can charge. For services, you will need to dig further. Try googling your craft and see what your competitors are charging.
Source affordable materials - When you’re pumping up production, you’ll be spending more on supplies. It’s a smart idea to discover wholesale or bulk sources of supplies to help keep your costs down to increase your profit.
Carve out a workspace - When it was exclusively a hobby, you may have been able to create from your living room or on the train. Once your hobby starts bringing in income, you’ll want to have a dedicated place to more easily work on projects and conveniently store supplies. At the very least, you don’t want to be spending all your time moving supplies around because you need the space for something else. Once you have a dedicated area you can work in, you’ll be able to concentrate better. You’ll also end up working more efficiently, which can only mean a potential for more income.
Set realistic goals for your enterprise - Sure, you’re excited at the prospect of making some extra money doing something you love. I get that but avoid getting carried away. Although it’s still your hobby, be “businesslike” enough to set modest goals at first, and experience what’s entailed in attaining them with regard to time, expense, and effort. Once you know, you can plan your growth accordingly.
Keep financial records - It will be gratifying for you to look at your records and determine the amount of profit your hobby has earned. I still go back to look at my records from time to time to see how far I’ve come in my business. You will also need to know how much you make because you need to claim your income on your tax returns. You’ll need to pay self-employment taxes, and potentially pay yourself a salary if the income takes off. If you don’t, then Uncle Sam may come and audit you, slapping on huge penalties. The good news is that just like your revenue, you can deduct legitimate expenses from your revenue and just pay taxes on net income. If you don’t know what is a legitimate deduction for your side business, then consult a CPA. Overall, keep your documentation in order, and you can keep the taxman at bay.
Tell your product’s “story” - As opposed to mass-produced items, handcrafted items are infused with personal energy. Your strongest marketing will be in telling customers about what makes your product special and unique. It’ll also help if you can explain why you derive so much pleasure from making it.
When my wife brought handcrafted wood lettering for my kid’s name to hang on the wall, she was attracted to a seller who’s an older gentleman crafting these letters to help pay for his granddaughter’s college costs. This story may not sound incredible, but it sure beats someone who just seems to be trying to make a quick buck.
Continue enjoying your hobby! - Remember that your hobby was your hobby in the first place because you enjoyed the creative process and it provided relaxation and fulfillment. When and if that ceases to be the case, go back to making it your hobby. Forget the extra income! To lose affinity for your hobby because it’s something you feel you “must” do will rob you of the hobby experience - and that is sad indeed.
One of the prime examples is people trying to turn their video game hobby into a YouTube business. All they see are these young kids streaming themselves playing video games and making money. What they don’t realize is that there’s a lot of hard work involved in making a video successful. There’s filming, editing, picking the right game to play, and marketing the videos, just to name a few.
Then there are the grueling hours of playing the same game for hours, days, and weeks on end. When it’s your hobby, you can just play when you want, and put it down and do something else for a while. You can also switch to a different game whenever you like. But if playing games becomes your business, then you better “play” the game your viewers are expecting you to play constantly. If you don’t, then your audience, and thus your income, will slowly wither away and go to other people who do play all the time.
The prospect of earning some extra money doing what you love is compelling. It can be accomplished by following the tips I just outlined to you, but make sure you are still able to retain your love of the hobby itself. Otherwise, the extra income may not be worth the cost.