In this series, I talked about converting your beloved hobby to a profitable business.
In Part 1 we talked about why it is advantageous to convert your hobby to business
In Part 2, we talked about how you can take steps to start the process
In Part 3, we talked about how we have to be aware of all the risks that come with converting hobby into a business.
In my opinion, there are no right or wrongs in starting a business but only how you can learn and grow from your mistakes.
- Failures are common in business and you should not be deterred by them.
- You should not start hating your hobby because your business did not succeed.
- If possible you should start your business again with a different twist to make it more palatable to the customer
In other words, serial entrepreneurs and businessmen who did not lose heart upon failure are more likely to become successful in their ventures. Read biography of any businessman you admire and you will find that she had her shares of failure.
With that in your heart let us move on to further part(hopefully last !!!!) of this series. How do you survive a business that is based on your hobby. I may repeat some points from part two.
- Have a business plan
Either create a business plan yourself or take help from expert chartered financial accountant. A business plan normally consists of
- Objectives and goals of your business
- Modes of finance
- Execution and marketing strategies
- Cash flow calculations and other things
- Risks in your business
A good business plan will provide you with enough knowledge to take right decision and work towards your goals
In short term, many a times, entrepreneurs wildly use credit card for their funding needs. It is a dangerous thing to use credit card to run your business, unless you can pay back. Credit card rates in India are around 3% per month which translates to 36% per year. Try topping that off with your business. In summary, do not over-leverage.
It is very important to do some activities early on that provide some cash flows to your business. Selling products on discount, doing consultancy work for less money, parting with a high commission on sales are a few methods to get your cash flow going. Also keep the expenses relatively low so that you can manage.
If both husband and wife work, one can get off job and start his/her business while other works to provide cash for everyday expense. A spouse may join the business if it starts getting some success.
Have you ever gone to a shop on its first day. You might have but it is a reality that there are not many customers on first day or even in first month. Have patience to allow your business get natural growth. You may go ahead and advertise and get people but actual growth happens slowly. Have patience and let your business grow
People would comment on your products and business. Comments can range from words of encouragement to nasty negative criticism ( it has happened to all of us). Do not get disturbed by negative comments and use the feedback to improve your product.
Also network more, plan ahead and enjoy your business. If you can successfully make a business out of your hobby, there is nothing better in this world.