One of the financial tips that we always hear from experts is the importance of having multiple income streams. No other year has proven the wisdom and practicality of this tip more than 2020 when the pandemic and the recession have caused financial discouragement to people across the globe. Now more than ever, we need to find ways to earn some extra cash—and what better way to do that than by doing what we love?
If you have a hobby that you have perfected, there’s no reason why you can’t explore turning it into something that earns you some income. At worst, you might only waste time; at best, you might find a fun way to make some extra cash while in quarantine. Here are some tips and pointers for turning your side passion into a profitable business venture.
Make a thorough competitive analysis.
Take a close look at the market and check if there is a gap in it for the product or service you want to provide. Is there a need for it while COVID-19 rages on? If the product or service already exists, can you find ways to do it better than your competitors? Evaluate how your potential competitors are doing the business and identify ways to set yourself apart.
Go for a test drive.
One of the safest ways to start a small business is by going on a test drive. Start small—with a limited inventory, and try selling to your friends and family first. Don’t quit your 9-5 right off the bat; making the transition from a salaried employee to a new entrepreneur is a huge risk, and the whole point of a side hustle is adding a stream of income on top of your current job.
Map out a detailed business plan.
Even if you’re planning on starting small, it would still benefit you greatly to map out a detailed business plan. A study published by the Strategic Entrepreneurship Journal found that small entrepreneurs who mapped out a formal business plan were 16 percent more likely to achieve viability than those who did not. Here are the parts you need to include:
- An executive summary
- Financial plan
- Company overview
- Management team
- List of products and services
- Metrics and milestones
- Market strategies
- Sales and marketing plan
Even if you’re starting as casually as you can, if it’s for profit, then it’s a business. Treating it as such might give you the boot you need to work hard and foresee potential setbacks.
Create a unique brand identity.
Yet another challenge that you need to be prepared for is the battle for creating a brand identity that can set you apart from your competitors. An excellent brand is crucial for gaining recognition, so you will need to develop a business name, logo, and aesthetic that will fully convey what your product or service is about.
Develop a solid marketing strategy.
The best thing about our post-internet world is that marketing need not be expensive, at least at the start. There are plenty of tools at your disposal right now—social media, video platforms, e-mail marketing, and virtual events. Developing a marketing strategy is more than just about posting information on social media about your business; it’s the process of knowing and understanding your target demographic and creating engaging content that will speak to their interests, values, and priorities.
Make the necessary investments.
While it’s true that your biggest asset is your skills, your mind and hands still need the best possible partners to create products and services of the highest quality. For example, if your hobby is creating accessories or jewelry, the best laser cutter on the market is your best friend since it will help meet your needs and add convenience to your labor. If you’re a makeup artist, the best brushes and palettes can help you develop the most stunning looks.
These purchases may seem big now, but that’s why they’re necessary investments—they will help you come up with the best product and service for your customers and may eventually prove themselves worthwhile assets.
It’s a Fun Job
While it’s borne out of your passion for this particular hobby, starting a business is still a job, albeit a more fun one. One of the most crucial aspects of turning your side passions into a profitable business venture is seeing it as a job or something you need to work hard at. Get yourself a mentor or a coach who can help you find the perfect balance between having fun and working hard. When you do, you might have a fighting chance of creating a successful business venture. Good luck!