Although you may see that skill as just a hobby, there’s a chance you can monetize it and turn your talent into a money-making business venture. However, knowing what it entails is extremely important before starting this possibly costly venture.
Firstly, to help you decided whether you should turn your hobby into a business take the following into consideration:
A hobby is of Personal enjoyment and satisfaction. You can gift or sell your work for the cost of materials. You can do it in your own time or when people contact you and You don’t have the reporting obligations of a business.
A business on the other hand comes with much more obligations:
- You apply for an Australian Business Number (ABN) to use in your business transactions.
- You (can) register a .com.au website once you have an ABN.
- You’ll have access to government information, services and concessions for business.
- You can establish a business identity when selling to customers and other businesses.
- You can claim tax deductions for business expenses against your taxable income.
- It may give you the flexibility to manage your time and work your own hours.
- It is for a commercial reason with the goal to make profit.
- It involves doing the activity repeatedly
- A business manner of organization and preparation is needed to ensure long term success.
Suttie Financial Group has worked with hundreds of people going from an individual to a company and we have seen a fair share of dos and don’ts. Here are some of the most common seen do’s and don’ts.
- Create a plan
- Get your first sale
- Organise your time
- Build an online presence
- Do check out local competitions – both direct and indirect.
- Network – word of mouth is the oldest and most powerful marketing tool.
- Treat it like a job not just a hobby
- Keep all your invoices, do the admin and be organized!
- Ensure you get paid correctly and on time
- Don’t assume financing processes go quickly – allow plenty of time.
- Don’t underestimate costs associated with a new business
- Don’t assume you can get a small business loan easily
- Don’t lease or sign any contracts before thoroughly checking them
- Don’t have others write your business plan with out your own detailed input.
- Don’t rely on close relatives or friendship groups on feedback of whether your hobby should be a business.
Do speak to one of our financial advisers regarding obligations, budgeting and any limitations you may have as well for support in getting your small business up and running.