Monday, April 11, 2011
Frugal Retirement: Turning a Hobby into an Income Stream
Now, as many hobbyists, in previous times the products I made were primarily used for enjoyment or gifts. While I made the occasional custom sports or baby quilts, most of my endeavors were enjoyed by me, family and friends. Turning a hobby into an income requires a different mindset, and along the way I’ve learned a few things:
• While some income streams such as selling your stuff may bring in instant income, many income streams, even small ones take a while to get off that ground. That advice about small businesses not making any business in the first year? That applies to micro businesses and incomes streams as well. As the side bar to my blog shows, I do have a few things listed for sale. But the truth of the matter is that I probably won’t see any real income until the summer.
• When it comes to creative hobbies, one needs to focus on what people want, rather than what you like to make. Although this sounds simple (and obvious) it can be an adjustment. I generally made large quilts. I’ve learned that smaller, seasonal and useful items need to be added to the mix. Living where I do I’ve started to incorporate “Texas” fabrics and various team logos into my projects.
• For me at least, I’ve had to find a way to combine my creativity with good business practices. This means things like making more than one of the same item, just in different colors and themes, so that I can be more efficient with my time. So once I find a pattern I like, I do all the cutting, all the sewing and all the quilting for multiple items in stages.
• In order to be a success, you have to have some kind of schedule and make some kind of time commitment. This is where all the business types that read my blog say to themselves “well, duh!!” As I’ve said before, I’m a putterer at heart. Most of my life I’ve been an at home wife and mom, or in a field where if you waited five minutes, you would be doing something completely different. With that in mind, I’ll never be the gal who gets up, has breakfast and goes into her studio to work for half a day. However, I do commit to a certain amount of time a week, and once I begin sewing, I commit to a time period before I leave that studio. Equally importantly, I’ve learned to track that time and schedule.
• You need to learn to value your time. This is especially difficult for creative hobbyists. Even though we’re making for profit, we generally enjoy the process. This means that when it comes to figuring out the value of a creation (or even a service); we downplay the value of our time. While we may not be able to pay ourselves $20 an hour, some kind of acknowledgement of our creative time is central to the pricing process.
• Small businesses, even casual income streams usually need some kind of structure. This means registering a name, getting a tax number, and figuring out how clients will pay you, for example. How much structure obviously depends on the business? For my business, barbarajune creations, I’ve registered a name, gotten a tax number, opened a business account in quicken and that’s about it. I don’t need any insurance; employees are out right now…you get the idea.
As you can see, I’ve had a learning curve. Others with more business experience in the “real world” may have fewer adjustments, some may have more. What I have learned is that it’s a fine line between hobby and business, but one that’s well worth it. The freedom to create, but with the knowledge that any success regarding income relies totally on me can be a shock sometimes-and I have more than one income stream!!
So I’ll continue to watch the views to my website rise, create and add more items to my little online store, learn about craft marketing and enjoy that fact that overall, I can make a little bit of money doing a lot of what I enjoy.