So, how do you turn your hobby into a business? Cece Mitchell, Zions Bank Women’s Financial Group Manager, shares some ideas.
Research & Define
You have probably been asked by friends why you don’t do “this” for a living. Does that mean there is truly a market for your product or service? Maybe, but the first step is to find out. Research the competition and your target market. You can’t sell to them if you don’t know who they are!
Decide if you have what it takes: Are you a self starter, a good communicator, do you have the stamina – physically and emotionally – to go it alone and make the decisions? If you said yes, wonderful. Decide if you’re the kind of person who can stick with your hobby even when the going gets tough. If you’d prefer to dabble in several hobbies without commitment, maybe you could be easily distracted by the next business idea that strikes your fancy. Successful entrepreneurs are generally committed to reaching their goals.
Write a business plan. Put your market research, background knowledge, and financial projections all into one place for a business plan. If you don’t know where to start, try looking at business plan templates and samples at the Zions Business Resource Center, located at 310 S. Main and free to the public: Mon.- Fri. 9:00 a.m. to 5:00 p.m.
Funding & Finances
Do you have the money to make it happen? Once you’ve written a business plan and established that your hobby can indeed be a sustainable business, you may discover you need additional money to make it take off. Unless you thrive on adversity, don’t quit your day job until you know that you have sufficient money to fund your business plan.
Getting financing can seem daunting, but remember that there are experts out there who can help provide guidance.
Keep detailed financial records. Don’t forget Uncle Sam, because, when your hobby produces income, you owe tax on it. If you find your hobby is regularly making money, it might be to your tax advantage to turn the sideline into a business. Many, if not most smaller companies operate as a sole proprietor, and report the income on the individual’s 1040 tax return and you have more options when it comes to deducting your expenses. Ask your tax advisor for details.
Keep your business finances separate from your personal finances. Most financial institutions offer free checking accounts for small business, making it affordable for even the smallest of enterprises.
Punch the Clock
Dedicate time to the business. “Family interference” is one reason some home-based hobby businesses are unproductive. Your family must realize that even though you are at home, you will still need time when you are “at work.” Sit down with your family and make sure they understand you need a set amount of time each day to run your business.
The Zions Bank Women’s Financial Group provides women of all ages and financial situations with the information they need to achieve their financial goals. Built upon Zions Bank’s 135-year foundation of strength and stability, the Women’s Financial Group can help you meet your financial goals. Whether you’re a stay-at-home mom or the owner of your own business, you can depend on our friendly team of banking experts to guide you through the growing sea of financial choices.
For more information, visit any one of our branches or call the Women’s Financial Group at (801) 844-7996 weekdays between 9 a.m. and 5 p.m. More information is available at: www.zionsbank.com.