Have you ever wondered how much fun it would be to turn your hobby into a business? In the past, a strong American economy led many people to consider taking their favorite pastime and making it a full-time occupation. However, before you take that first big leap, make sure you do your homework.
Hobbies should be fun. However, the world is filled with people who started restaurants because they enjoyed cooking, only to discover the enormous difference between entertaining friends and having to please demanding customers.
A Dime a Dozen?
Perhaps you have a great idea. . .then you wonder, “If this is so great, why hasn’t anyone thought of it before?” It’s a classic entrepreneur’s dilemma. It’s important to find out whether others have thought of the idea and then discovered it was unworkable—or tried it and failed.
Check It Out
Before contacting actual competitors, exhaust the resources of your local library and research using the Internet. Try to secure reports on companies in the same field. Perhaps you could find someone doing the same thing in another part of the country (where you may never compete) and get in touch with them. Until you have proven to yourself and your bank that there is a market for your idea, it is important to maintain your current job and income.
Have a Sixth Sense
Trust your instincts. Using your “beginner’s mind” may enable you to take a fresh look at the industry and the business you are entering.
- Make realistic financial calculations—and put them on paper.
- Determine your total start-up expense plus six months’ cash for working capital. (In a tough economy, you might consider accumulating enough working capital for one year.)
- How many hours will you need to work? Can the business afford to pay you? Is there expansion capital available to hire one or more employees?
- If you’re leaving a job, you will need to continue to provide your family with the same fringe benefits: health; disability; and life insurance.
- Work with an accountant and attorney to establish the best way to set-up the business.
- Is the business “bankable”? Talk with your banker about possible sources of financing. See if you’re eligible for an SBA (Small Business Administration) loan.
Owning your own business can bring an immense sense of satisfaction and achievement. However, for many business owners, it’s not always easy going. To better your chances for success: “Look before you leap.”