Every seasoned hobbyist hears a similar refrain from well-meaning friends and family whenever a new project is gifted to its loving recipient or takes its place of pride in your home: “Wouldn’t it be great if you could make money while doing that?”

Whether you enjoy the fiber arts, carpentry, photography, writing or any other hobby, finding ways to make a profit from your skills and knowledge can be overwhelming or confusing, especially if you don’t have any experience running your own business.

In this article, we’ll break down the basics and help you understand whether you’re ready to make the leap from hobbyist to entrepreneur.

Get Into The Business Mindset
Making the transition from a passion-based hobby to a profitable business involves a significant mindset shift. Rather than for your own self-expression or satisfaction — or the joy you see on the face of its intended recipient — you are now meeting an external demand.

Ask yourself the following questions to see if you’re ready to embark on a business venture:

• Am I okay with focusing on others’ wants, rather than my own creative desires?
• Is my product of professional-level quality, and am I comfortable accurately pricing its worth?
• Do I have the ability to handle deadlines and meet customer demands? Will those requirements inhibit my ability to love what I do?
• Do I have the bandwidth to take on the multifaceted needs of a business, from making the product to marketing, accounting, customer service and beyond?

Building a business takes a lot of work. Answering these questions honestly will help you gain a better sense of your bandwidth and any mindset or practical changes you’ll need to make before getting deeper in the process.

Determining Market Interest
While your family and friends might be great fans and appreciators of your work, it’s important to determine whether there’s a desire for your product or service among the broader public. This can mean participating in activities like:

• Hosting an open house with your goods
• Experimenting with a small booth at craft fairs or flea markets
• Showing your wares in the local artist display at a coffee shop or store

During these events, it’s essential that you have frank conversations with organizers and booth visitors about your product quality and pricing. This can give you vital insight into how people perceive your work, what they’re willing to pay and ways you can improve.

Make sure you leave your contact information and a way for people to follow your business for updates, such as through a social media page, newsletter or email list.

Build an Online Presence
Once you’ve committed to starting your own business, one of the earliest steps you can take is building your online presence. In our digital-first world, many potential customers look up an event or business online before ever visiting it in person. It also gives your friends and family an easily shareable link to spread the word about your offerings. Consider creating:

• A website for an instant credibility boost – A neatly organized website with fantastic photos of your creations communicates valuable information about who you are and what you do. Post an event calendar to help generate interest in sales and fairs, plus make sure there’s a way for potential customers to contact you about commissions or with questions.

• Social media accounts for your business – With Facebook’s community-driven model, many businesses find success on this platform. If your hobby is visually interesting, Instagram can be great for sharing behind-the-scenes looks at your process. Make sure to post timely notifications of new offers, online-only deals and participation in local events, so your audience is informed and has the opportunity to engage with your content.
• An online storefront – If you want an online storefront for your business, it’s important to partner with a platform you know and trust. You can go the route of a marketplace, such as Etsy, Amazon Handmade or others; their large built-in audience is beneficial for sellers who want to leverage their brand. If you prefer to have more control over your store, you can use platforms like Shopify and Squarespace to build your own.

Price What You Deserve
When you’re used to giving your handmade wares away as gifts, it can be hard to know how to properly price them for a sustainable — and profitable — business. Here are some tips to help you price them reasonably:

• Calculate your costs – The first step to establishing a price is understanding how much went into making the product. Calculate materials, labor — the amount of time you spent making it — and production costs, plus any indirect amounts you spent, such as on marketing efforts.
• Understand what your competitors are charging – Evaluating what your competitors charge is a good way to ballpark pricing. Paired with insights you gained while determining market interest, you can determine a price that accurately reflects your worth, whether you consider yourself a budget or luxury creator.
• Choose a pricing strategy – There are many proven models you can base your pricing strategy on, such as cost-plus pricing, which combines total costs with your desired revenue, or value-based pricing, which reflects a product's perceived customer value rather than its actual cost. For more insight on pricing strategies, refer to this article by the U.S. Chamber of Commerce.

Hobbies are a very important part of many people's lives, providing a critical way to reduce stress, improve mental wellbeing and build new skills while fostering a sense of accomplishment. Making the leap from an avid hobbyist to an entrepreneur is a significant change that should be approached thoughtfully to ensure you’re up to the task of serving customers rather than your own creative interests.

The American Independent Business Coalition (AIBC) is here to help entrepreneurs thrive personally and professionally. To learn more about the benefits of becoming an AIBC member, visit aibcoalition.com.

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