No matter what our day job entails we all need time away from the pressure of work. Lots of people escape from the working grind by doing something they truly enjoy. Indeed, it seems we all need a release, a hobby or a passion to keep us vital and inspired. At some time, all of us have dreamt of turning our passion into our occupation. You may be a home chef, a musician, a crafts-person or any number of other things, but still remain obligated to work in a field you don’t really enjoy so much.
However, some people do take the leap of faith, quit their day job, and attempt to turn their dream into a reality. How can you determine if your hobby can be transformed into a business?
Is your passion already a money earner?
You may have already found a demand for your product, services or talent. The thrill of getting paid for doing what you love is extremely satisfying, but as with everything in life, there are positives and negatives to consider. On the plus side, you have started making money doing what you love. On the flip side, according to the tax office, if your hobby is earning money the government will soon be wanting a piece of the pie.
Activities engaged in with the intention of making money are classified as business rather than a hobby. By law, any profit from your efforts is income that needs to be declared. As your business grows, so does your taxable income, and it’s important from the outset to keep records of your expenses and profit.
Keeping on track
Accurate book keeping is essential when running a small business enterprise. For starters, it will give you a clear picture just how much (or little) profit you are making. Some business expenses are tax deductible, allowing you to decrease losses and increase overall profits.
Modern book keeping software programs provide an easy to use interface for beginners. You will be able to keep track of expenses and see what areas of your business are most profitable. Trimming your business costs will go a long way toward making your business sustainable over the long haul. Take advantage of online resources, talk to experts, and learn how to be frugal. If you are an idealistic artist or creator you may require a solid financial grounding to realise your dream.
Separate personal and business expenses
When starting out, there may be a tendency to support your passion by dipping into your personal accounts. It’s important from the outset to separate your accounts by opening a new bank account with a credit card solely for business expenses. Make sure to investigate flexible payment schedules that will best suit your needs.
An optimum business is one that will grow over time. You may feel like leaving your job behind and jumping in feet-first to your new project, but it is worth considering the slow and steady approach. You may have the option of scaling down your day job from full time to part time while you establish yourself. Other members of your household might even get on-board and adjust their lifestyle also with a desire to be part of the new venture. Depending on your talent, you may also consider joining forces with like-minded people in creation of a larger venture with costs spread out amongst the various participants.
There isn’t a one-size-fits-all means of becoming a success. What works for someone else might not work for you. Following your dream is admirable, but make sure you don’t get sidetracked into following someone else’s agenda. After all, its your passion and you have every right to put your own personal stamp on proceedings.