Turn Your Hobby Into a Business

Reality television is amazing…while I’ll agree that most of it isn’t worth your time, I enjoy watching how some of the “stars” who elegantly perform in public actually work their butts off behind the scenes. Lifting the curtain on the daily tasks of a true artist shows that success is more than just creating a product. In most cases, you have to be a financially savvy marketing guru to succeed.

You need to think of yourself and your art, as a business. When people come to me for help they often don’t see themselves in this light. They’re frustrated because they can’t get traction with their financial picture or with their craft.

I have good news. Solving both of these problems requires many of the same skills.

1. Determine how much money it takes to operate your financial life.

The most important part of your craft and your financial life is to make sure that you’re able to turn the lights on tomorrow. Sit down with a sheet of paper and list each item you must have to live another day. How much money is it?

Your first goal as a business owner is to meet and exceed that number. Is this short term thinking? Yes it is. But in any business book, you’ll find that the most important part of a sustainable business is to keep costs in check and to be able to operate even when times are lean.

Often when my students look at themselves as a business, expenses that seemed uncuttable suddenly are on the table. That cable television? My business doesn’t need that! The weekly Starbucks stop? I can’t afford it! Look for opportunities to lower your overhead.

Is this all the money you’ll need? No, but step one to any successful operation is keeping the lights on, right?

2. Determine your income streams.

Now that you know the company’s expenses, it’s time to find out how you’re going to meet those numbers. Just like you did with your expenses, write out all possible income sources. The act of putting data on paper is a powerful tool to activate your brain. You’ll begin analyzing the data the moment it’s in front of you. It’s amazing to watch people suddenly realize ways of making money they’d never imagine.

Once numbers are in front of you, it’s easy to start asking, “Am I charging the right amount?” or “Am I billing correctly?” It’s always empowering to watch people realize opportunities that had passed them by. One client owned a dance studio and suddenly decided that with her acting background, she could offer acting classes when lessons weren’t in session. It might cost her a few more dollars to keep the lights on, but there were two nights she didn’t have anything happening at the studio. Why not? That was two years ago. Now she has a former student who’s a successful actor teaching lessons. She has those two nights off and her business is still operating and earning money while she’s at home. She’s also creating a home study guide that she plans to sell on her website. Write down all income stream ideas and you’ll begin to see cracks where opportunities might exist.

3.  Keep your business books separate.

I’ve covered this territory enough that if you’re a frequent reader here, you’ve heard it before (but it’s so, so important I’ll write it again). Keep your business expenses and income separate from your personal information. At the very least open up a separate checking account. If you find that the business is beginning to bring in consistent revenue, find a capable CPA or business attorney to help you organize your business as an official separate entity.

While having an official “business” is good for liability and tax purposes, it’s also wonderful psychologically. A separate business checkbook and financial statement tells you and everyone around you that you take your brand seriously. Now it isn’t something you “hope to do in the future.” You’re no longer an “aspiring” anything. You’re now the real deal.

4Automate everything.

You should automate every piece of your financial life that can be automatically handled. You don’t have time to worry about every tiny step. Your brain as the business owner should be squarely on two topics:

  • How do you keep the lights on tomorrow?
  • Where is additional revenue going to come from?

Does this sound mercenary? It might seem like it at first….I’m sure this quest for money probably isn’t what attracted you into your art in the first place. The sad truth about any serious artist is that there is an economic component of success. The more quickly you’re able to automate inconsequential activities and focus on the big picture, the faster you’ll grow.

This doesn’t mean that you no longer donate your artistic talents to organizations that deserve them. On the contrary, you should donate regularly. Not only is it spiritually fulfilling, but it’s good business. Dig inside any profitable company and you’ll find they’re donating time, services and products as much as possible. Why? It’s the easiest way to advertise. Just remember…your goal in “giving away the product” is to find additional ways to increase revenue. Make sure as you’re gifting your product that everyone knows that you’re also looking for business opportunities.

5. Get help.

Most of us aren’t skilled in this area (that’s why I’m glad you’re here reading!). Seek some advice from a business resource, such as (among others) the Small Business Administration, Fast Company, or Entrepreneur Magazine.  All of these sites have excellent resources and tools to help steer you in the right direction when it comes to asking the right business related questions.

Don’t let fear of the unknown get in the way of treating your craft as a business.  This is an exciting, challenging, yet rewarding opportunity!

2013-02-22T09:00:45+00:00