Are you running a hobby or a business?
Last week, we touched on some practical steps to take in growing your small business and believe that the post would be incomplete if we don’t write about the differences between running a hobby and a business. The reason is, a lot of small business owners are running their hobbies and think they are running businesses. No wonder there are increased frustrations, poorly structured, and failing businesses as more people step into the entrepreneurship shoes.
Nobody says you cannot turn your hobbies and passions into profit-making ventures, but when it comes to running them as businesses, it’s a different ball game entirely.
In this article, we will show you how you can differentiate between the two and share a few actionable steps you can take to put your business in order.
Five Differences between a Hobby and a Business
- A hobby has no structure, and perhaps does not need one. You just run operations the way you want and deal with issues the way you deem fit when they arise. When it comes to running a business on the other hand, systems and structures are non-negotiable. Your mode of operation has to be clearly stated, and your values and priorities properly communicated.
- A hobby does not need strategies. Growth strategies, customer attraction and retention strategies, marketing strategies, etc. are meant for businesses not hobbies. For hobbies, you just do what comes to mind every time. No plans, no strategies.
- Your hobby is subject to your feelings. You do it when you feel like and the days you are not in the mood, no job necessarily gets done! No successful business is run that way.
- A hobby doesn’t necessarily have to make profit. You know what we mean? Yes, you can make a few bucks from time to time but it doesn’t pay the bills, how much more leaving you with extras; but a business needs a constant flow of income in order to survive and thrive.
- The money made from a hobby can be spent lavishly on irrelevances, without anyone holding you responsible. You do not necessarily have to have savings nor investment plans for your hobby but when you are running a business, the financials have to be in order with proper records, accounting and allocations.
So we ask again, ‘are you running a hobby or a business?’
Here are a few thoughts that can help you straighten things out and get your business running excellently.
- Put systems and structures in place.
Consult books and attend seminars to learn more about business structuring.
- Write a business plan and draw a business model.
A business plan simply highlights what you want to achieve in a particular number of years and how. You can use the help of business development experts to get this done. There are also a lot of self-help books and templates on the Internet that you can leverage on.
- Staff your weaknesses.
This is very important in upholding your business. If you’re poor with record keeping, for instance, employ someone with strengths in that area. With that, you can be sure no stone is left unturned.
- Network with other business owners.
Study the way they structure their businesses and get ideas on how to go about yours. You cannot learn it all on your own and you don’t have to wait till you learn from your own experiences.