With the economy in flux, jobs disappearing and industries shifting, you might be reassessing your career, your financial options and what the future might hold. If you’re like me, the stay-at-home time has also given you time to reflect on what really matters to you and focus on pursuing your passions more.
We hear the word pivot a lot these days. And one of those pivots you might be toying with is turning your hobby into a business. Working for yourself can appear way more appealing in contrast to the uncertainty of the job market. Maybe there’s something you do really well that you’ve been wanting to share with the world, or maybe you’ve gotten to like staying at home more and want a career that you can do without a commute or office environment.
More and more women are becoming successful entrepreneurs, while also being moms, wives and caregivers. Some are just out of college, and others are starting on their second work-life past middle age. It can be done! But it also takes a lot of work, no guarantee of success and pressures that you might not experience in a 9-5 job. Still the satisfaction of knowing that what you built is yours and the work you put into it will be yours to benefit from is very appealing.
Whatever your passion is there’s things to consider before you make the leap into start-up mode. Give some serious thought to these questions, the answers can help you figure out if your business idea is feasible and determine a timeline for launch.
Are you ready to handle the bookkeeping, accounting, marketing, legal stuff, staffing, taxes, profit/loss statements, complaints, licenses, stocking, sales and manufacturing yourself? Yes, you can definitely outsource some of these roles and hiring a virtual assistant can be extremely helpful in getting more tasks done, but at the end of the day, as a sole proprietor, ultimately the responsibility for making it all run smoothly will fall on you. You’ll need to wear many hats each day and switch them on a dime.
Are you prepared to live your passion? This is an important question. Ask one business owner and they’ll say: “Do what you love and you’ll never work a day in your life again,” because essentially they are having so much fun everyday in their business that it doesn’t feel like work. Then ask another business owner and they might grumble “Don’t ruin a passion by making it a business.” You might love to knit for fun, but if you have five custom orders a day you need to produce, five days a week, you might actually start to hate it! And you might also realize that your body can only produce so much custom work a week (my hands hurt just thinking of all that knitting)
Can you run the numbers, run the numbers, and then do it a few hundred more times? Business is built on math and there’s an elegant honest beauty to that. Let’s take the custom knitter again. Let’s say she can produce 15 pieces a week roughly. Let’s also say that her business operating expenses per year (yarn, website, shipping, etc) is $10,000. So, in order to make around $50,000 a year, she’d need to make about $75,000 gross to account for taxes, which means each piece would need to cost at least $65. That’s with producing that amount every week, with no vacation or holidays. She could charge more to make up for some days off, but at what point will her prices outpace her customer base? These are the questions you’ll need to ask yourself.
Have you studied your competition? Follow people that are doing what you want to do, join Facebook groups that relate to the industry you’d like to be in, listen to their complaints and learn from their successes. What can you offer that might be a Unique Selling Point that’s different from the rest? Get a firm understanding of the worst parts of the industry before you ever step foot into it.
Can you start part-time? This is a great way to get your feet wet and see if the business is for you. Can you maintain a normal source of reliable income while you build your business? Are you prepared to wait to turn a profit? Can you mentally and financially wait several years for the business to become a source of dependable income? These may be the lucky ones who actually turn a profit, while others will close having never gotten back the initial investment they put into it.
This might make owning a business sound daunting! It can be, but doing the homework before you begin, planning out ways to address worse-case scenarios can give you the advantage to overcoming the challenges most start-ups face. Keep researching, become an expert and with a little luck, you too, can succeed.