Mark Twain once said “Find a job you enjoy doing and you will never have to work a day in your life.” In keeping with that idea, many people decide to turn their much-loved hobbies into a business. If you too have thought about taking your favorite pastime and making it your livelihood, here are some things you should do first.
#1. Write a Business Plan
You may have been doing your hobby for some time, and might even have earned money from it before. That doesn’t mean you are exempt from creating a business plan. A business plan will help you set realistic goals and better promote your products and services. It will also tell you whether or not there is actually a market for them. Remember that just because you are enthused about your pastime does not mean everyone else will be.
#2. Set up a Structure
To be eligible for IRS deductions, you will need to prove that you are actually running a business and not engaging in a hobby. As such, you should:
- Determine your business structure such as a Limited Liability Corporation (LLC) or sole proprietorship.
- File the necessary documents such as Articles of Incorporation.
- Obtain a business license, if needed.
- Register your company’s name and logo.
- Open separate bank accounts for your business and personal affairs.
#3. Get Serious about your Business
Now that your hobby is your business, you can no longer adopt a leisurely attitude about it. Treat it as you would any other job, even if that means you must clear your schedule to do so. This might involve changing the way you think or talk about your hobby. For example, rather than describing it as a recreational activity, you’ll want to let others know that you now do it for a living.
When starting a new business, one thing people often overlook is their accounting. Financial problems are the one thing that is most likely to keep your small business from taking off, so the importance of hiring an accountant cannot be overstated. For help with choosing the accounting services that are right for your new enterprise, please contact us.