Turning A Hobby Into A Business In 10 Easy Steps

We all have hobbies and tasks we enjoy doing in our spare time. From playing guitar and carving masterpieces to crafting, crocheting, and cooking, these activities provide a sense of relaxation and creative expression.

But what if I told you you can earn money while doing these activities?

That’s right. In easy steps, you can convert your hobby into a thriving business.

Want to learn how? Our 10-step guide will show you everything you need to know about turning a hobby into a business.

But first, let’s look at a few fundamental concepts.

Hobby Vs Business: Definition and Difference

You engage in a hobby during your free time, usually after work, on weekends, or holidays. Hobbies range from hiking and painting to music and sports. They are stress busters; we mainly do them for fun and to kill time.

On the other hand, a business is a regular occupation, profession, or trade. It can be for-profit or non-profit, from sole proprietorships and partnerships to corporations and LLCs.

It’s important to note that a hobby can also be run as a business if you engage in it to generate income. If so, you must adhere to the necessary legal and financial regulations. Business laws differ from one country to another and depend on different factors. 

Turning A Hobby Into A Business

For instance, if you are in the US, the IRS, the agency that oversees the enforcement of tax laws and collection, checks the intention of turning a hobby into profit generation and the profit history. 

If you have made profits from your hobby in 3 to 5 consecutive years, the IRS will view it as intentional and thus make it eligible to be a business.

Moreover, it is easier to set up financial systems for a business than for a hobby. 

Unlike in a hobby, you can create a proper balance sheet and profits and loss statements when claiming income from a business. That way, you can claim expenses such as the costs of the raw materials, utility used, and other expenses.

 Here are the ten steps to follow if you want to turn your hobby into a business:

Steps to Turn a Hobby into a Business

You may have received one or two inquiries from people who want to buy your goods. Now, you’re considering turning your hobby into a business. But where do you start? 

Learn how to turn a hobby into a business in these simple steps:

Step 1: Research the Market

Making money with a hobby starts with in-depth research. You must do your homework to succeed, even if you have a million-dollar idea. 

Doing market research is the best way to validate your business idea. So what does it entail?

It starts with evaluating your competitors. Chances are high that someone else has done or is doing something similar or almost. Therefore, you need to find out who they are, what they do, how they do it, and when and where they are doing it. 

Conducting a competitor analysis will help you determine if there is a gap and enhance a business strategy. It will also let you know if your business idea can work. Plus, you will evaluate how to penetrate the market and whether there is demand for your idea.

Secondly, research your target market. That is to understand who is going to buy your products or services.

You need to know not just your customer base but also its size. While receiving inquiries is a good sign that you could earn with your hobby, you still need to research whether there is a sufficient customer base to make it worthwhile. Also, research their demographics, age, education level, gender, and consumer purchasing habits.

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Thirdly, study the market and consumer trends. Understanding the market patterns will help you fine-tune your idea and strategy. You can use trend discovery tools, leverage social media listening tools, survey customers, monitor competitor movement, and subscribe to trend newsletters.

Finally, understand your unique selling proposition (USP). Having a USP is vital when starting a business. This short statement defines why your company is better than others in the market and why customers should buy your products and services.

Step 2: Choose a Business Model

Now that you understand the market, you can decide on the business model you want to adopt. For instance, is it a sole proprietorship, partnership, or an LLC? This mainly depends on your craft or your hobby. 

You also need to determine a few more critical aspects. For instance, will you be working from home? Is it a service or product business? Does it require an additional workforce (employees), or is it a solo venture? Answering such questions gives you a more precise direction on how to turn your hobby into a business. 

Creating a business plan would help answer all these issues. Therefore, start with the basics, such as creating a business plan. With it, you can determine the kind of capital or funding you need and where to get it. Plus, you establish your goals and the best way of achieving them. 

Step 3: Create a Brand

What do you do? Is it making custom jewelry, photography, art, or even writing? If you want to turn your hobby into a business, create a brand behind it. 

A brand helps define what you do, stand for, and intend to achieve. It also gives your business a brand voice—how it talks or connects with your audience. A brand voice differentiates you from the competition, which is the start of a successful business.  

Defining your brand also helps you create the best logo, website, marketing campaigns, and social media content. In other words, branding defines how the market sees your business. It is the best way to communicate with your target audience and differentiate yourself from the competition. 

Step 4: Determine Your Funding Options

Transitioning from a hobby into a business requires funding. It ceases to be just a fun activity and becomes something grander. You must satisfy your customers by offering the best products or services. 

While you have the necessary equipment and resources, as you were already doing this, you might need to upgrade a few things here and there. 

For instance, you must buy more supplies to create more crafts. You may also require more production space and staff to increase production.

To survive the ever-competitive market, you must also market your offering and maintain the best customer relations. To streamline these processes, you should incorporate a marketing and customer engagement tool like EcommerceBot. It helps automate everything from creating ads to posting them and answering customer queries at any time, any day. 

You can try Ecommercebot for free; no credit card is required. You agree to turn your E-commerce business into a success story by clicking the image below. 

Ecommercebot Free trial

All this requires money. Therefore, determining where the money will come from becomes crucial in turning your hobby into a business. 

There are several ways to raise the necessary funds for your business. For starters, you may use your savings or take a loan from family or friends. Alternatively, you can use your credit card’s limit to hire staff or take a personal loan from your bank. 

You can also seek small business grants, try crowdfunding, or even look for angel investors. There are many options, especially if your credit score is good. 

Step 5: Upgrade your Working Space and Processes

This might change if you made handmade crafts from the corner of your garage. As you spend more hours there, upgrading your home office with better, more comfortable furniture would also help. In other words, you’ll have to make your working space more conducive. 

If you are adding more employees, you will require more space and furniture. More or larger equipment would help with increased production. You must consider getting a bigger space if your space needs to be improved for the new activities. 

The processes also have to be streamlined. It includes everything from sourcing your raw materials to producing the items, marketing them, and getting them to the customer. You need an efficient system that eliminates delays and promotes customer satisfaction. 

Step 6: Open an Online Shop

Assume you were making paper crafts as a hobby. Your work was only available to your family, friends, and maybe colleagues. 

As a business, it needs to be visible and available to a broader audience. And what better way to do this than with an online shop? 

An online shop allows you to display your best craft to a larger audience and give them a chance to buy it. You can open an online shop through your website or use ecommerce platforms like Shopify, Wix, Woocommerce, or BigCommerce. 

Some platforms are accessible and affordable to open and will play a significant role in growing your business. Better still, with a platform like Shopify, you can incorporate various ecommerce tools to make it even more effective. For example, integrating your shop with EcomerceBot’s Shopify integration feature brings a new sense of functionality to your shop. 

This integration allows order and inventory tracking, ensuring your customers are best served. In addition, an Omnichannel Chatbot enables automated chats with your shop visitors and customers, creating a seamless customer engagement process. 

Alternatively, you can try other platforms if your new business involves creative content like writing and videos. YouTube has been the best video-sharing platform for a long time, although newcomers like TikTok have also made a significant mark in the industry. Choose a platform that best suits your content and promote it to your target audience. 

Step 7: Set Clear Boundaries

Hobbies have few restrictions. For instance, you can crochet in your living room while watching TV or create paper art with friends. However, once that hobby turns into a full-fledged business, all this changes. 

First, you must establish a designated workplace in a conducive environment. You can set up a home office or rent some space somewhere else. This allows you to have a quiet space and set up your work equipment. 

Also, if you are employing new staff, you can’t expect them to work from your bedroom or sitting area. 

Step 8: Launch your Business and Market It

Having accomplished all those steps, it’s time to turn all the theory into action. Launching your business ensures that your strategies and planning come to life. 

Generally, if you’ve been doing this as a hobby, your family and friends know about it. This means that they will become your first customers and promoters. Their word of mouth will be the first way to inform people about your brand. 

You can start social media accounts and create an email list for your marketing campaigns. If you have a website, SEO practices, including blogging, will help bring traffic to your shop. Use EcommerceBot’s Social Media Manager to automate your posts and target the right audience. 

With the word out there, you only need to serve your first customers well. If you are selling products, offer quality products that make customers want more and can make them refer friends to your shop.

If it’s content like funny videos or DIY clips, produce quality content that resonates with your audience to attract a loyal fanbase. With consistency, your new business can grow steadily to meet your goals. 

Step 9: Work to Maintain your Customers

Everything else discussed above can only be helpful if you can maintain customers. Your customers are your path to success.

First, higher customer satisfaction leads to loyal customers. In return, it translates to repeat purchases and referrals. All this helps to propel your business forward. 

However, dissatisfied customers never come back. They might also spread bad word about your business, which is never good.

Maintaining good customer relations, offering quality products, and providing efficient customer support can solve all that. If you can work on these aspects, your business will grow. That way, you’ll have successfully turned your hobby into a business.

Step 10: Have a Growth Plan

Even as you launch your business, be ready for growth. You can expect growth if you serve your customers by offering quality products and services. However, if you do shoddy work, the business might fail before it starts. 

Therefore, plan for expected growth. Where do you see yourself in 2, 3, or 5 years? Have those projections. Also, how will you handle the challenges that come along the way? And, ultimately, are you ready for that expected growth? Will you be able to handle it? 

Answering these essential questions sets your business on a solid path towards success. 

Top Businesses that Started as Hobbies

If you are thinking about turning a hobby into a business, and for that matter, a successful one, you are not the first. People have done it before, meaning that it’s a viable idea. So, if you need inspiration, here are some businesses that started as hobbies and are doing exceptionally well.

Yankee Candle by Michael J Kittredge

This is one of the most inspiring hobby-turned-business stories. It started when Michael J Kittredge, then just a kid, made a scented candle gift for his mum by melting wax crayons. 

From this, neighbors loved his work and started buying from him. He bought more raw materials to make more scented candles with the proceeds. 

While in high school, he partnered with two friends to rent a shop and officially start the business. That is how the Yankee Candle brand was born.

Today, it boasts over $840 million in annual revenue, with over 560 shops globally. 


BrewDog was born out of a love for beer by two friends, James and Martin. These two were tired of the usual beer that the UK market offered, prompting them to start an independent brewery.

Two years after being established, BrewDog was among the most promising independent brewers in Scotland and the UK. It even expanded to open more shops across Europe.

According to BBC News, BrewDog’s revenue reached around £321.2m by 2023. This shows that even hobbies can become some of the biggest companies globally. 

The Boeing Company

Isn’t Boeing one of the most respected companies globally? It certainly is. Well, this company also started as a hobby. 

William Boeing was so fascinated by aircraft that he bought one for himself. He also took flying classes and used to fly himself. 

However, when the plane developed a mechanical failure, he couldn’t get the spare parts to repair it. That was when William and his co-pilot thought of building better airplanes themselves. 

In 7 years, after he had first admired aircraft, he started making airplanes for the US Army. That dream never faded, and it’s the origin of today’s Boeing Company. In 2023, the annual revenue for Boeing hit $77.794B. 

Conclusion on Turning A Hobby Into A Business

Turning a hobby into a business is a great way to make money doing what you love. However, even though you love doing what you do, it will still be successful as a business. 

You must follow all the stages necessary to open a new business and adhere to the business’s rules, which are quite different from running a hobby. 

You can try Ecommercebot for free; no credit card is required. You agree to turn your E-commerce business into a success story by clicking the image below. 

Ecommercebot Free trial

Following the steps mentioned above will get you there. Also, using the right tools, especially in e-commerce, helps boost your business’s growth. A good example is the EcommerceBot. 

It includes an Omnichannel Chatbot for customer engagement, a Shopify integration for order and inventory tracking, and a Social media manager for automating your social media posts. 

It streamlines every aspect of your Shopify store to get the best results. Make your subscription today and enjoy all these features and more. 

Frequently Asked Questions

How much does Shopify cost?

The cost of your Shopify shop will depend on the pricing plan you pick. Shopify offers four pricing plans: Basic for $24, Shopify for $69, Advanced for $299, and the Plus plan for $2,300 a month. 

What is an ecommerce business?

It is any entity that generates revenue selling goods and services online. It could sell products like phones, clothes, accessories, or services like virtual assistance, content, or web design services.

What is an ecommerce store? 

It is a virtual online space where the owner can post products or services for their audience. Customers can view, shop, and pay for products and services here. The online store is your shop’s staff, product shelves, and cash register.

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