Many businesses have started from humble beginnings as a hobby. The hobby expands as word spreads. You have to decide whether to keep your hobby as just that, a hobby you do in your spare time, or you look to develop it into a business.

“If you do what you love, you will never work a day in your life.”

Here are 10 things to make your hobby a business

1. ‘Failing to plan is planning to fail!’

   Starting the conversation with someone, such as your accountant or business consultant, is an important step. Preparing for the transition is important!

2. Legal structure.

   Will your business be a sole trader, partnership, company, trust or joint venture? These are the different possible legal structures your business will be set up in. Don’t rush to your solicitor for this straight away until you have spoken with your accountant.

3. Register a business name.

   You need to decide on your business name. But more importantly, you need to register it.

4. Get an Australian Business Number or ABN.

   This is done after you decide what legal structure your business will be and its business name, though you can add the business name later if you wish.

5. Take out insurance.

   A given for nearly every business will be insurances. Getting the right insurances is important to cover you and others. Speaking to an Insurance broker will identify the insurance types you will need.

6. Legal contracts.

   For consultants and service providers you may need contracts with clients. Providers of goods may require terms and conditions of sale. These can be in many forms, but they maybe the difference between a good and bad outcome for you and your customers.

7. Funding your first year.

   You will need to look at what your ability is to fund the business. This can come in various forms as self funded ie from your own money, borrowed from family and friends, or taking out a loan from a loan provider. Knowing how much you will need is important. What’s more important is going in big and borrowing more than you can repay. Many start-ups in technology financed their beginnings with student loans and credit cards.

8. Marketing.

   This can range from a logo, business cards, social media, email and websites. With many businesses needing to have an online presence, getting it right can be critical to your success! Having an online business also means you may be selling your products online. This also requires someone to look at your accounting package for linking to your online account.

9. Bookkeeping.

   You will need to have some type of book keeping in place to record your income and expenses. It is also a requirement that you issue your clients a tax invoice for sales. This might be a simple set up as an exercise book and a receipt book from the local stationery shop. But having a good small business accounting package can help you manage this. Speak to an experienced bookkeeper to know which one is best for you and your business.

10. Budget.

    With many of what we have just talked about, you will need a budget of how much everything is going to cost and how much you need to be making before you can quit your day job. Getting this wrong could be a costly mistake. Sitting down with someone who understands you and your business and who has experience in preparing budgets is critical to your success.

11. BONUS: Don’t quit your day job.

    Seriously, until you’re confident the business can fund your personal needs, don’t quit your job. Try to work on your business outside of your employed work hours and build it from there.

Why does Foley Business Management want you to know this? Well our purpose is to build sustainable communities and to create a better world for our childrens’ children. Many businesses fail in their first year, causing immense pressure on those involved. Knowing whether to start a business is the right thing to do for all involved. This is why we take a holistic approach to our clients, not just preparing financial statements and leaving it to the client to work out on their own. We provide financial management solutions to small businesses, not for profits and social enterprise so they can make informed decisions. For many people, going into business is a big step. One that will affect you, your family and your community.

If you would like to speak to one of our consultants for a free 30 minute consultation, please contact us to organise a time that is convenient. Taking your from a hobby to a business can be a rewarding experience for you, your family and your community! Let’s make sure you do it the right way.

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