How to Avoid Ruining Your Hobby When Turning it into a Business

Whether it’s mountain biking, knitting, or paragliding – lots of us have hobbies we enjoy, especially if they help us stop thinking about work. But what if your hobby becomes work? The idea of getting paid to do something you love can seem pretty irresistible. In this article we look at ways you can create a small business without turning your favourite pastime into a dreaded chore. And because we make accounting software, we mention a bit about tax. Sorry.

Questions to ask yourself before starting a hobby business

Those beautifully lit ‘pack an order with me’ videos on Instagrams don’t always show what’s happening behind the scenes, where the reality of running a small business is that they’re filming at weird o’clock.

Do you have enough time?

Turning your hobby into a side-hustle or business does involve some level of commitment – from setting up a medium to sell through, such as a shop on an online marketplace like Etsy, to keeping financial records, and understanding your tax reporting responsibilities. Which bring us to…

Do you know what your tax obligations are?

Thanks to the Trading Allowance, you can earn up to a total amount of £1,000 from self-employment or other miscellaneous income every tax year, and you won’t need to tell anyone or pay tax on it. Yep, even if you have another job working for an employer. If your earnings tip over that threshold though, you’ll need to tell HMRC that you’re self-employed.

You’ll only know if you’re at or near the threshold if you keep Very Good Financial Records. You might see this process referred to as bookkeeping. Yes, we make accounting software which will make this easier. Other solutions are also available, but we like us best.

Do you like doing it to a deadline?

Creating a vase or two might be a relaxing extra-curricular activity, but when you’ve got deadlines to meet and orders to send, is it still a good idea to turn your pottery passion into a business venture?

Test your hobby by giving yourself a deadline before you set up the business. That way you can get a feel as to whether it will stand the test of time, or whether you’ll resent it before finishing your second fruit bowl.

Consider how long you’ve been doing it

If you’ve been doing your hobby for a fair few years, then you probably know just about everything there is to know about it. If it’s your third attempt at fishing without having caught anything, it might not the best idea base an entire business model around it.

Your experience will be paramount to the success of the business, so don’t rush into anything before you’ve learned everything you can – both practically and in theory.

Find something else to relax you

Once you’ve created your own business, you will eat, sleep and dream it. It’s still important to have time away from work and clear your mind, but when your business is based on your favourite hobby that might not be something you can do to relax anymore.

While you might still enjoy doing it, that doesn’t mean you won’t constantly be thinking about work when you do, and how to capitalise on every second of enjoyment.

While you’re still welcome (encouraged, even) to continue with your hobby, it is worthwhile finding another past time to keep you relaxed – something that you definitely won’t associate with work!

Be wary of investing too much

You want to go in with guns blazing and do this thing properly, trust us, we get it. The issue is that while enthusiasm is always encouraged, putting all your eggs in one basket can be problematic. Any start up has the ability to flop (and the harsh truth is that 90% of them do) but it doesn’t mean you should sacrifice the enjoyment of your favourite hobby too.

Start gradually and build up the amount of time you invest in your business. This way you can get used to the demand for the business and keep employed work while you find your feet. Once your start up has found a decent income and steady clientele you can begin to think long term and quit the day job.

Create a business plan

A business plan is a must for any start up, but it is especially important when you’re working to turn your hobby into your dream business. Fine tune your idea with details about how you plan to make it a reality. Plan your timeline. Have a good nose at the competition.

Now is the perfect time to think about logistics and costs. It will help you anticipate potential pitfalls and how you could overcome them.

Learn more about using Pandle to make business accounting easier. Create an account today and decide what to do with all the extra time you get back.