Turning your hobby into a business sounds like a dream come true. And if you take the right path, it can be.
But be careful. There are traps waiting along this road. Fierce price competition, burnout, and financial hardship strike many who try this.
But it won’t happen to you!
Why?
Because we’re going to walk you through a proven path to success. We’re going to show you everything you need to turn your hobby into income, then how to diversify and grow that income so you never face hobby-business-burnout.
Ready?
Here we go.
How to Turn Your Hobby Into a Business
We’re going to break this down into 5 steps, here’s a quick overview:
No matter what hobby business you choose, the strategy will remain (almost) the same. The goal is to create a business that is worth $1 million and does not need your work to be successful. You’ll be able to choose how much you actually want to work in this business.
That’s how you fight burnout.
You’ll pick your hobby and you’ll find your marketplace. (This is where most people stop and where the burnout begins). But then you’ll start diversifying your income with secondary markets, repeat business, and high return on investment income streams.
I know it sounds like a lot, but let’s break it down!
Step #1: Choose Your Hobby
We have a separate guide written for some of the possible hobbies out there. If your hobby is here, click the link and check out that for an even more in-depth guide.
If Your hobby isn’t listed, no worries. The strategy is basically the same for all of them.
3MM Craft and Hobby Guides:
Step #2: Identify Your Primary Marketplace
Etsy and eBay are almost always mentioned here, and for good reason, but don’t forget about amazon. There is a health market there for handmade crafts as well.
Step #3: Identify Your Secondary Markets
Now, this is where the strategy starts to shine.
Most people stop after finding their first marketplace. The problem with that is that you get locked into to having to do your chosen hobby day in and day out forever.
Each dollar you want to earn comes from time spent doing your hobby.
In short, it’s just a job.
But to make it a business, you need to earn repeat income from each hour you spend working.
This way, your earnings will compound over time.
How do you do that?
Our favorite way is through digital sales. Online courses are a great example. Spend time teaching others how to master your craft or hobby, but then sell it over and over again. These online course creation platforms make it easy to get started.
Step #4: Build Your Audience
Start branding your business. Make it about you. Build it around your personality and your aesthetic.
You want to leverage all the social platforms to do this. We keep an updated review of the best social media management services out there. They simplify the process, and many of them use algorithms to tell you the best time to post and share.
You’ll also want to use email marketing. We harp on this one a lot, but it is one of the best ways to build and maintain an audience. Like our social media reviews, we keep an updated list of the best email marketing platforms as well.
Step #5: Start Investing
The moment you have money coming in is the moment you want to start investing.
Open a brokerage account and start adding funds to it. Bonus points if you set up a recurring deposit to make sure you are always adding something to your savings.
Then buy shares of a broad market ETF. We like VOO from Vanguard but there are others out there.
To see how this will grow your business, check out our Build Your Own Berkshire guide for details.
You’ll also want to work your way through our Ultimate Investing Guide.
The short version is this: We want to grow our Look-Through Earnings by a set amount each year. In the end, this will net us enough money to live on indefinitely and leave to our kids or to society.
Step #5: Start Streamlining to Work Less
Starting a business is hard work, even one that is built on your hobbies.
So once we get a sense of the process of our business, we want to start streamlining and building systems to reduce our time at work.
The goal is to maximize our dollars earned for each hour worked.
You can find the full rundown in our Ultimate Productivity Guide
How To Turn Your Hobby Into a Million-Dollar Business
If you work through those steps above, not only will you create a million-dollar business (thanks to investing), you’ll build a true 3MM business. That means a million-dollar business that you can run in less than three months per year.