In the words of Mark Twain, “Find a job you enjoy doing, and you will never have to work a day in your life.” What many would call a pipe dream has become a reality for millions around the globe. Turning your hobby into a business, whether it be gardening, baking, or painting, is attainable if you're willing to adopt a business mindset and the precautions necessary to guarantee financial stability. The preliminary steps are the easiest: identify your hobby, and make sure you're great at it. But where do you go from there?
Start with Your Endgame
Is your business going to be a full-time commitment or a part-time pursuit to supplement your income? If you're simply looking for some extra cash, your part-time endeavor will likely be run out of your home. In this instance, home-based business insurance will safeguard the business equipment within your home and protect you from business-related lawsuits. If you have your sights set on making this a full-time operation, you'll likely need to invest in moving your business offsite and hiring staff. This is where a business owner’s policy (BOP) can work to protect you, your staff, and your property.
Establish Your Business Plan
Plenty of people have leisurely pursuits, but building a plan to monetize that pursuit is what sets entrepreneurs apart from hobbyists. When starting a business, there are many steps one needs to take:
- Find your clients: You can find an audience for nearly every product or service, but it's best to follow your due diligence and determine the success of similar businesses.
- Determine your finances: Beyond the IRS coming for their share of your income, it's important to take stock of inventory and equipment and be mindful of the increased cost of utilities. After all, you can’t attend a craft fair to promote your business without bringing along a tent and tables.
- Set your budget: Make sure you're able to fund your hobby before generating revenue. If you plan on hiring staff, ensure you are equipped with workers’ compensation insurance. If you're transitioning to a home office, make sure you're prepared to handle the cost of shipping and added utilities.
- Create a marketing strategy: No matter how niche your product may be, there will be competitors. Capturing a market share from your competition often requires a combination of online and offline strategies. Utilize social media and word of mouth to the best of your ability.
Protect Your Business with BOP Insurance
Before you steer your business into the high-speed lane, it's critical to be outfitted with the right insurance. Keep in mind, whether you're running your business from home or leasing a small office, you need to be insured for any accident that could befall you or your business, as most homeowners insurance policies do not cover home-based businesses. You're now solely responsible for your income, so if something should happen that would inhibit your ability to create and sell, the right insurance can ensure you're still able to pay the bills. You also need to verify your home insurance covers visiting clientele, if applicable, in case they're injured on your property.
Turning your hobby into a business can be nerve-wracking, but if you're able to support yourself and your family by doing something you love, these initial steps are worth the time and labor spent. Fortunately, World Insurance has years of experience supporting businesses with the right insurance and protection. For more information, reach out today.
This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.