Taking the First Steps to Turn Your Hobby into a Business

Man enjoying turning his hobby into a business and wrapping a flower bouquet in green paper In the words of Mark Twain, “Find a job you enjoy doing, and you will never have to work a day in your life.” What many would call a pipe dream has become a reality for millions around the globe. Turning your hobby into a business, whether it be gardening, baking, or painting, is attainable if you are willing to adopt a business mindset and the precautions necessary to guarantee financial stability. The preliminary steps are the easiest: identify your hobby, and make sure you are great at it. But where do you go from there?

Start with Your Endgame

Is your business going to be a full-time commitment or a part-time pursuit to supplement your income? If you are simply looking for some extra cash, your part-time endeavor will likely be run out of your home. In this instance, home-based business insurance will safeguard the business equipment within your home and protect you from business-related lawsuits. If you have your sights set on making this a full-time operation, you will likely need to invest in moving your business offsite and hiring staff. This is where a business owner’s policy (BOP) can work to protect you, your staff, and your property.

Establish Your Business Plan

Most of us have leisurely pursuits, but building a plan to monetize that pursuit is what sets entrepreneurs apart from hobbyists. When starting a business, there are many steps one needs to take:

  • Find your clients: You can find an audience for nearly every product or service, but it is best to follow your due diligence and determine the success of similar businesses.
  • Determine your finances: Beyond the IRS coming for their share of your income, it is important to take stock of inventory and equipment and be mindful of the increased cost of utilities. After all, you can’t attend a craft fair to promote your business without bringing along a tent and tables.
  • Set your budget: Make sure you are able to fund your hobby before generating revenue. If you plan on hiring staff, ensure you are equipped with workers’ compensation insurance. If you are transitioning to a home office, make sure you are prepared to handle the cost of shipping and added utilities.
  • Create a marketing strategy: No matter how niche your product may be, there will be competitors. Capturing a market share from your competition often requires a combination of online and offline strategies. Utilize social media and word of mouth to the best of your ability.

Protect Your Business with BOP Insurance

Before you steer your business into the high-speed lane, it is important you are outfitted with the right insurance. Keep in mind, whether you are running your business from home or leasing a small office, you need to make sure you are insured for any accident that could befall you or your business, as most homeowners insurance policies do not cover home-based businesses. You are now solely responsible for your income, so if something should happen that would inhibit your ability to create and sell, the right insurance can ensure you are still able to pay the bills. You also need to verify your home insurance covers visiting clientele in case they are injured on your property.

Turning your hobby into a business can be nerve-wracking, but if you are able to support yourself and your family doing something you love, these initial steps are worth the time and labor spent. Fortunately, TJ Woods Insurance has years of experience supporting businesses with the right insurance and protection. For more information, contact us today to learn all about home-based and general business insurance.