The entrepreneurs you read about or see on TV may seem like overnight successes but in reality, creating your own business doesn’t happen overnight. Behind every successful business idea, months (or even years) of thought and planning have gone into launching it. After all, who wants to risk the money, time and effort required to start a new business on a mere whim?
One of the keys to success is creating a business you’re excited about. Your passion will help you persist through all the obstacles. Here are three ideas for creating your own business and loving what you do.
Creating Your Own Business from a Hobby
Most people have some kind of hobby they not only enjoy, but also are good at. Whether your hobby is baking, painting, horseback riding or golf, is there a way to turn it into a business? The answer is probably yes all it takes is a little creativity.
Keep in mind that turning a hobby into a business really means spending 10 percent of your day doing the hobby that you love and 90 percent handling marketing, managing, sales, and bookkeeping. If that idea doesn’t appeal to you, consider taking on a partner who can handle the “business side” of the business while you focus on the creative hobby part.
Task number one to create your own business from a hobby is to find out how the IRS views your new venture. The IRS classifies your activities by asking you three questions:
- Are you participating in your hobby to earn a profit? If you earn any income from your hobby, you must report it on your tax return.
- Are you carrying on the activity in a businesslike manner, such as creating ways to make the activity profitable?
- Do you expect to make a future profit from the appreciation of the assets used in the activity?
If your answers are yes, it’s time to get down to the nitty-gritty of business startup filing the necessary paperwork, securing your trademark and deciding on a business structure such as sole proprietorship, LLC or corporation. You’ll also need to apply for a Federal Tax ID number and get any necessary permits and business licenses.
It’s easier than ever to test your hobby’s viability as a business thanks to online marketplaces. If you want to sell a product, Etsy, eBay and Amazon all make it easy to set up a business page and start selling right away. Place a few products for sale and then get customer feedback it will give you ideas for new products or improvements on your existing ones. If you’re creating your own business to offer a service, such as graphic design or IT services, sign up with a marketplace like Guru or Upwork to promote your services and build up a client base.
Creating a Business from a Trend
Sometimes success in business is all about timing. Discovering a trend or hopping on a trend during its early stages could mean long-lasting profits if you do it right. Here’s how to spot trends that might be the basis for a business.
- Stay abreast of industry news. Most industry trade association websites have email newsletters you can subscribe to so you don’t have to remember to check their websites. For instance, I religiously read Nation’s Restaurant News and the National Retail Federation website and newsletters. Besides the fun of reading about food, NRN helps you spot employee and design trends. The NRF Foundation’s new Retail Insight Center is a great tool for exploring retail industry data from public government sources and the NRF’s monthly consumer survey.
- Watch global trends. JWT Intelligence, a marketing and communications company with offices in 90 countries, covers everything from generational to reports on niche industries such as mobile, travel, food news and more. Springwise‘s contributors include a network of more than 20,000 trendspotters in over 190 countries. Trendwatching and Trendhunter are two other helpful global trend websites that offer free email newsletters and downloadable reports.
- Keep your ears and eyes open. Trends are everywhere you look. Do you have any teens or preteens in your immediate family? Ask them what’s hot in their group of friends. Did your sister just have a baby? Find out what the trends are among the new moms she’s hanging out with. Big cities like Los Angeles and New York are where major trends usually start, but you don’t have to live there to get a heads-up. Subscribe to online newspapers from major cities to keep up on what’s current. Also pay attention to hot trends coming from pop culture icons in movies, books, and television.
Creating a New Business for a Lifestyle Change
Have you recently been laid off from a job? Had to move because of school or family commitments? Gotten married or divorced? Earned a new professional degree? Lost 100 pounds? Any kind of lifestyle change major or minor could be just the push you need to finally create the business you’ve been thinking about. Lifestyle changes often open your eyes to needs in the marketplace you never noticed before.
You might also want to create a business to change your lifestyle. For instance, if you’re sick of your three-hour daily commute and long work hours, running your business from home might sound like the perfect solution.
Before you take the plunge with a business that changes your lifestyle, ask yourself if you have what it takes to be a successful entrepreneur. A recent study from Forbes found the most common traits in successful entrepreneurs were vision, work ethic, resilience, positivity, and passion. Without any one of these traits, you’d be hard-pressed to make it in today’s competitive business environment.
To get the reality check you need, ask yourself these five questions:
- Am I self-motivated? With no one to boss you around, how disciplined will you be to work long days and nights? If you depend on others to motivate you to action, owning a business may not be the right choice for you.
- Am I tenacious? With business, success comes constant obstacles and setbacks. If you can face challenges with the patience and persistence to see them through, you have a better chance of making your small business dream a reality.
- Am I a good manager? You might not be able to hire employees right away, but eventually, you’ll need people to help your business grow and thrive. Some kind of experience managing and motivating people is important for would-be entrepreneurs.
- Do I know my strengths and weaknesses? Successful business owners hire people who balance their skills and help them compensate for the areas where they’re weak. If you think you’re good at everything, entrepreneurship might not be for you.
- Am I financially prepared? Your new business will likely take 12 to 18 months to break even. What will you live on in the meantime and where will you get the money to start your business? Write a business plan to help you determine your startup costs, what to pay yourself and what type of financing you’ll need down the road.
There are many roads to business success and with persistence and enthusiasm, one of them can take you to the business of your dreams.
Creating your own business doesn’t have to be overwhelming. The CorXec team can assist in getting you started and can help keep you in compliance. Grab our Start a Business Checklist to get you started down the right path.
