How to turn a hobby into a profitable online business
What do you love to do? Do you enjoy making candles, jewellery, or home décor items? Now, imagine if you could turn that joy and passion into a lucrative business venture.
If you find that your family and friends are constantly praising your skills, telling you that “you should turn that hobby into a business” and that “so many people would buy these”, it might be time to take action.
While you may assume it’s only suitable as a hobby, if it provides value to others there’s a real chance you can monetise it or even turn it into a successful business.
So in this article you’ll find all the key information and resources you need to turn your talent into a money-making business venture.
Should you turn your hobby into a business?
The reason why many people are afraid to take action, even if they know their talent is marketable, is the fear of failure. They fear that if they attempt to monetise a hobby, they’ll no longer feel joy or satisfaction from the activity at all. The pressure of working to a schedule, meeting financial goals and customer expectations can take away the fun, relaxation, and feeling of pleasure that they now feel.
If this scenario sounds familiar, then listen up. Sure, failure can happen and it can be scary, but not taking a chance can also prevent you from pursuing your dream, and what you’re meant to do.
Take Alice Barrow and Tom Green’s example, they were making candles at home in their spare time and are now the proud owners of Wick & Tallow, a successful luxury candle business. You can read more about their story in this BBC article.
So, with a little preparation and strategic execution, you too can enjoy a positive result.
Here’s how to get started…
The basics of getting a business started
Your business needs a name, and it may be the most important decision you make. While the right name can make your business the talk of the town, the wrong one can doom it to failure and obscurity.
Ideally, you want to choose a unique and memorable name that appeals not only to you but also to the kind of customers you are trying to attract.
Here are a few examples of good small business names:
- Doggles, a business that sells protective goggles for dog
- Real Meals, a meal delivery service that used natural ingredients to cook meals
- Loquet, a handmade jewellery shop
Apart from communicating what your business is about and being brandable, you should also ensure the name you choose isn’t being used by another business and isn’t infringing anyone else’s intellectual property.
To help you get off to a good start, read our guide on choosing a business name and a domain name.
Another important thing to figure out at the beginning of your journey is the type of business you’re going to register. The taxes you pay as a business will depend on it, so make sure you get educated or discuss this with a good accountant so there are no nasty surprises.
Here are some resources to help you as you decide on the type of business you want to create, the specialised licenses you might need, how to apply for a patent or register a trade mark:
- What form of legal structure your business should take
- Which licence you may need for your business
- What you can patent and how to go about it
- Steps to follow to apply to register a trade mark
If you make jewellery, clothing or anything related to arts and crafts, you’ll probably consider using third-party marketplaces like Etsy or eBay as an easy way to get started online. That makes sense as you probably want to get your products in front of as many prospects as you can, and as quickly as possible.
There are benefits of using a third-party marketplace such as Etsy, including:
- Free account. However, you will have to pay a monthly fee to list your products on the platform, and there are also commission fees per sale as well as payment processing fees. So, if you’re just testing the water to see whether your product will sell, it might make sense to use a platform like Etsy. But if you’re serious about building a profitable business, then building your own site might be a better overall investment. Plus, in the long run setting up your own site could prove to be cheaper compared to selling on a third-party site.
- More initial exposure. One of the biggest benefits of being on a site like Etsy is that people already use it to buy products like yours, which means as soon as your products are listed, people can start finding you. However, you’ll still need to promote your Etsy page to reach more potential customers. The downside with this is that you’re investing into promoting a page on a third-party site, instead of investing in your own site and building your own brand.
So, although sites like Etsy are a good way to get started online, especially if you don’t have a budget to invest in building and promoting your site, ask yourself:
- What will you do if that third-party shuts down?
- Do you want to be the one in control of your business site and how you present yourself to potential customers, or are you comfortable with a third-party site deciding that for you?
- Do you want to sell a few products a month, and keep the investment to a minimum, or do you want to build a business and sell products from your own site, a site that you have complete control over?
We’ve written an in-depth article about the benefits of using third-party marketplaces such as Etsy versus creating your own e-commerce store, so make sure you read it as you decide on the best option for you.
If you decide that you’d like to build a website and sell your products directly from it, the following free courses in our Online Business Training will explain all you need to know about getting your site up and running:
- How to get your business online, from choosing and registering your domain to picking the right website solution
- The steps to building your website, from choosing fonts and colours, to writing content for your site
Promoting your business/ product
It doesn’t matter if you have an amazing product if people don’t know it exists. Which is why it’s so important to know how to market your business so it gets in front of the right people – your potential customers.
A good way to get started is social media. You need to have a presence on the social platforms where your prospects are spending time online. If you’re not sure which ones to use to promote your business, this course walks you through all the major platforms so you can understand how each one works, which best matches the needs of your business and how to use a network so it’s worthwhile for you.
While it’s up to you to decide which social media channel you want to build a presence on, make sure you give Pinterest a try as it has a strong arts and crafts focus. There are 100 million active users on this platform, and 93% of Pinners have used Pinterest to plan for or make purchases. So, having a presence on Pinterest may be a great marketing decision for you.
Here is an example:
To learn more about it, how it works and how to use to market your business and products, read our beginner’s guide to Pinterest for small businesses.
If you plan to sell your products from a physical location, such as a market, or if you sell in pop-up stores, make sure to take advantage of Facebook’s events feature. Facebook events are a great way to keep your audience in the know about where you’ll be selling next, about special events you’ll be attending, or whenever you’re running a sale. Most people have their Facebook events connected to their smartphones, which means you won’t need to do much leg work to promote your events. This article includes some great advice on how to take advantage of Facebook events to market your business.
Now, while you take the time to organically build a community around your brand on social media, you might find that advertising there can help you to reach and sell to your audience faster. With so much competition on networks like Twitter and Facebook, running a social media campaign can get your products in front of prospects quickly, and with immediate results, instead of just waiting for them to discover you (which can happen in a day, a month, or never).
If you’re willing to invest a bit of money to advertise on social media, we’ve got you covered with a detailed course that explains how social media advertising works, and how to get started. You can take this free course whenever you like, and at your own pace, to learn everything on how to create and manage a paid campaign on Twitter and Facebook, as well as how to track and measure the results.
Once you’ve started attracting customers to your site, and making your first sales, don’t stop there. Remember that happy customers not only recommend you to their friends and family, but they’re also likely to buy from you again. They usually just need an incentive. So ask for their permission to update them via email whenever you add a new product or run a sale.
When used right, email marketing can be extremely profitable. That’s why we recommend taking our email marketing course to learn how to use email to engage your customers and push repeat purchases.
All these online marketing techniques are much easier to do when you have your own site. It also makes it easier to learn more about your site’s visitors, who they are, where they live, which products they’re interested in, how they found your site, and more. That’s because when you have your own site, you can sign up for Google Analytics and get access to lots of information about your visitors that can later on help you to improve your site and better sell your products.
If you’re not familiar with Google Analytics, this beginner’s guide explains everything from how to set it up to what valuable information you can find about your site and visitors, and how to use it to improve.
Decide if you want to expand
The above steps should help you create a small, profitable business that you can run in your spare time. But if you decide you want to take things to the next level, and become a full-time business owner, here’s what you need to do:
- Create a large ecommerce site. Your site needs to accommodate the growth of your business. Now that you’re adding more products, and selling more, you’ll need to upgrade to a proper ecommerce site that comes with the extra features that customers are looking for.
- Understand how you’ll meet potential demand in terms of obtaining raw materials and creating your final product.
- Team up. If you want to be successful – that kind of successful that leaves people wondering if it’s even possible – you need to hire people who are great at things you’re not, at the things your success goal require. So if you think an expert might do a better job at optimising your site for search engines, or at (re)designing your site, hire one, while you focus on things you’re good at.
There are lots of pros and cons regarding transitioning a hobby into a business. But it’s been done before, and successfully, even with hobbies far less marketable than yours. So whether you love making candles, lamps or T-shirts, you now have all the information you need to turn your hobby into a business.
So, go all in and don’t look back. Work hard, make mistakes, learn from them, and you’ll see positive results.
Your turn now: have you turned your own hobby into a business? What’s your best piece of advice to those considering taking this route? We’d love to read your comments @123reg.