Are You Running a Business or a Hobby?

Back in 2010 I started a side hustle business. At least, I tried to. I used to make shopping totes out of vintage fabric with a retro owl appliqued on the front. The tote was complete with pockets and it was reversible! Everyone I gifted with these totes loved them. My friend’s in NYC even had strangers stopping them in the grocery store asking where they could buy one.

I was inspired to start a business! Armed with my business license, sewing machine, and tons of fabric, I went to work. I sewed a stack of totes and paid to be a vendor at a local street fair. I set up a super cute display and . . . I didn’t sell a single tote.

My business was a failure!

First, I broke cardinal rule #1. I had an “If I build it they will come” mentality. Second, I wouldn’t have even attained a business license if it hadn’t been required by the street fair. Who even knew that you needed a business license for a hobby that you just wanted to make some pocket money doing? Obviously, not me.

Hobby

• Fun: A hobby is something you do because you enjoy it. No other reason needed. It may relax you, it may challenge you, it may excite you.

• Not set up as a biz: You do your hobby at home or out and about. You don’t make money at it, so business entities and bank accounts are not needed.

• Does not make money (or at least not consistently making money)

• No dedicated time: You do it when you have time and whenever you like.

• No true growth goals: You may have improvement goals for some hobbies, like playing guitar or learning a language, but there are no deadlines.

• No financial goals: Even if your hobby sometimes brings in money you don’t have any financial growth goals. 

• Not data dependent: You are probably not tracking any metrics. Even if you are, you aren’t dependent on that data; it’s just a fun extra bit of info to have.

• Not selling to anyone: You don’t have a customer that you are targeting to sell things to. 

Business

• May be fun: Business can be enjoyable. If you are a business owner, I think it’s kinda important to like what you do.

• Set up as a business: You have a business plan, you have your LLC (or some other legal entity)

• Must make money: You are, after all, in business to make money.

• Scheduled: You have some sort of time structure tied to your business, and you work at it regularly.

• Growth targets: You have growth goals with targets to keep your business scaling at a healthy pace.

• Financial goals: Your financial goals are designed to keep your business profitable.

• Data dependent: You know what metrics you are measuring, why you are measuring them, and how they can help you build a thriving business.

• Has a solid client/customer description: You know to whom you are selling, what they want, and how your product or service solves their problems.

Either is okay. If you want a hobby that sometimes brings in money, fine. Just recognize that and don’t expect anything about your hobby to be consistent (the product, the profit, the following, the money). If it is a business (or you want it to be a business), then make sure you treat it like one. 

The Hobby/Business Mashup

Some people have a mashup of the two - a “hobness” or a “bizby,” if you will. This happens when you have a hobby you are treating like a business or business that you are treating like a hobby. They sound like the same thing, but they are not.

Hobbies as a Business

A hobness (easier than saying “hobby as a business”) is a hobby that you started making money doing. You don’t want it to be a business. Maybe you prefer having it as a hobby and you don’t want the enjoyment of it to go away. Maybe you don’t want to put the effort into making it a business. The problem exposes itself when you start relying on the money you make from your hobby. Now, you’re expecting your hobby to act like a business.

Businesses as a Hobby

Bizbys occur when you have a business that you say you want to have a successful business. However, your actions do not support your business. You don’t have a plan. You don’t have a clear definition of who your client or customer is. You work at it inconsistently, when you feel like it. You don’t make consistent money, and you don’t market. 

There are a couple of different reasons why this happens. You may have started out in hobby land and decided you could make it a business, This happens a lot. Maybe you read or watched a video on XYZ “profitable” business and went all in, with dreams of 4-hour workweeks and mai tais on the beach. You want the business to make you money, but you don’t want to work at it.

A Real Life Example

I started an eCommerce side hustle a few years back with the goal of eventually replacing my income. My intention from the start was for it to be a business. What steps did I take to make my side hustle a thriving business?

• Education: I am a voracious learner, and I studied what other successful resellers were doing. I studied daily.

• Organization: How did they organize inventory? I copied them. 

• Time Management: How did they manage their time? I did that, too. I time blocked my schedule to make the most of my hours outside my full-time job.

• Inventory: How many items did I need? What did my sell-through rate need to be? What should I be paying for goods? I made sure my COGs were low enough to where I could sell them at 4-5 times the cost minimum.

• Finances: I tracked my gross income, COGs, business costs, and taxes 

• Legal Entity: Was I selling enough to get an LLC? Done!

Anything and everything they did to be successful, I did too. Intention is everything. I was profitable within nine months.

Intention is Everything

If you want your business to be successful you will operate it like a business. Just don’t lie to yourself. If you see yourself bringing hobby tendencies into your business, put the kibosh on it today. Start looking at the areas where you are weak to strengthen them. 

• Education: Do you have any skill or learning gaps that you need to fill, or are there things you want to learn about? 

• Organization: Do you have an organization method that you use and stick to? 

• Time Management: Do you have set hours for working on your business?

• Inventory: Do you have inventory? If so, do you have a set system for tracking it?

• Finances: How do you track your expenditures and income? Do you have a financial professional on your team?

• Legal Entity: Is your business set up as a legal entity?

Know What You Want

If you’ve had a coaching session with me or talking to me for any period of time you have probably heard me say, “Know what you want, or you’ll take what you get.” 

If you don’t know what you want, you may wind up starting one of these mashups. Maybe you are already dealing with a mashup and wondering why it isn’t successful. You just have to decide what you want it to be, a hobby or a business.

Regardless of where you are it’s never too late to make a change. Remember, you always have choices.

Do You Need Help Tapping Into Your Potential?

Are you struggling to meet your goals and wish you had support? Have you ever considered having a coach? You may not know what a coach does.

What Does a Coach Do?

Group Coaching:

• Sessions focus around a general topic, a process, and progress

• Each group member shares what they are working on, any challenges, and progress

• Group members may submit questions or as questions during group sessions

• Group feedback is provided to meet the needs of everyone

• Individual feedback may be given as it pertains to the group

• Group accessibility to me (group texts and emails)

• Each person learns how to track and monitor their personal growth

One-on-One Coaching:

• You and I develop an individualized plan targeting your specific goals

• You receive individualized support from me

• Answers to your specific questions

• Guidance on your specific issues and blocks

• Accessibility to me outside coaching sessions for added support (individual texts and emails to check in)

• Your plan leads to learning how your personal growth is in your control

If you need a coach, contact me. I can teach you how to get started and accelerate your growth by using repeatable methods. Need the tools? I’ve got them. The goal is always to make you independent. I should be working myself out of a job. Once you take off, you may want to have a session from time to time, especially if you are scaling your goals. A good coach teaches you how to stand on your own two feet. Are you ready to CONNECT?