Friends and relatives clamor for your cookies. Everyone loves your handmade sweaters. Your friends keep telling you to turn your woodworking hobby into a career. But can really turn your passion into profits?
Nick Vaidya, managing partner of The 8020Strategy Group, an Austin, Texas-based business consulting firm, said that budding entrepreneurs should ask themselves three questions before embarking on the journey to build a business around your hobby.
Those questions are:
- Is anyone making money selling what you want to sell?
- Can your idea be repackaged with a couple of twists?
- Do I have the resources to get help and make the idea fly?
“The rest is just a matter of execution,” Vaidya said.
Popping up a good idea
Rob and Renée Israel, co-founders of Doc Popcorn, a Boulder, Colo.-based fresh-popped branded popcorn franchise system, said they were confident that there was a market for their product when they launched in 2003 because they saw that interest in living healthy a lifestyle was on the rise.
However, they noticed a void of healthy snack options at malls and other places families normally grab a quick bite.
“We knew there was a keen interest in healthy snacks, but when looking at the landscape at indoor and outdoor venues, we saw 20 guys selling ice cream, so we knew there were customers, but there were few healthy options and few, if any, vendors selling fresh-popped popcorn or other healthy treats,” said Rob Israel.
Renée Israel said that having business experience was also an important ingredient when it came to the couple’s success in turning their love of fitness and healthy eating into a thriving business.
“You need business savvy and patience, which are important parts of turning your passion into a profit,” she said. The Israels started out by taking over a failed cookie store to test the waters. In mid-2009, they made the decision to franchise and have since grown the business to 26 locations and now have more than 30 agreements in place to open more than 100 units.
Can it be repeated?
Another way to determine if your small business idea will take off is to ask yourself if your idea is something that can be branded and replicated.
“It’s important that you are passionate about your work, but it's more important to ensure you create a brand niche ,” said Sarah Hathorn, CEO and founder of Illustra Consulting, an Atlanta-based career advisory firm. “You must consider if there is a need for your business venture, who is the ideal target audience you want to attract and what unique selling proposition do you offer to outclass the competition. Everyone has a personal brand that determines their small company brand, but few business owners can really define it."
While competition will indicate if there is a market for the products or services being offered, startups also have to set themselves apart if they want to turn their hobby into a living.
“The biggest question is whether the marketplace agrees that your offering is viable,” said Shel Horowitz, a eco-friendly green marketing consultant and author based in Hadley, Mass. “And usually, that means being able to demonstrate instantly and clearly why yours is better than what's already out there. This might be an improvement on the existing solution, e.g., a baker who uses flour made from wheat grown locally or who does gluten-free products. Or it could be a new and different way to accomplish a goal or solve a pain point.”