From a Hobby to a Business: The Mistakes Many Entrepreneurs Make

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Find something you love, and figure out a way to make money from it. That is the American dream. While there is truth to that, there is a vast difference between being an entrepreneur and having a hobby. Starting your own business has become wildly popular these days. Around 27 million entrepreneurs reside in the United States, and the last few years have seen an increase in the amount of individuals starting their own businesses.


Within the technological revolution, there is a growing conviction for many that they need to make their own mark in this world and leave their jobs behind. Tabloids are everywhere saying that someone is his or her own brand. This message has morphed into a powerful movement for individuals to forge their own path in the business world.

The American dream has never been easy to start and has been difficult to maintain. Nearly half of all businesses fail because of the lack of profit they see. They key to a successful business is getting a return on your investment (ROI). The goal is to achieve a return on the financial investment and the time invested. When something is a hobby, it lacks the uninterrupted time and focus necessary to become a successful, long standing business. Furthermore, a hobbyist cannot turn their hobby into a business overnight. It requires a clear vision of what is needed for a successful business.

Hobby or Business?

The dictionary defines a hobby as an activity or interest pursued for pleasure or relaxation and not as a main occupation. Some examples include sowing, baking, or dancing. These are all leisure activities. Can a hobby become a business? Absolutely, but there are some important steps needed. Let’s look at an example…

There is a  woman who experimented making soaps from recipes she found on Pinterest. She succeeds and gets excited. She makes loads of soap, comes up with a clever business name, and uses her own computer and printer to make labels. The leftover hemp string from her child’s school project works great to attach the label, and with a wisp of dried flowers to give it that rustic look, she has a product to sell. She designs and orders some business cards and then creates a Facebook page. Then, she snaps pictures of her products and uploads them to her new business page. She has turned a hobby into a business.

Unfortunately, she might not get many customers. Although she may be make some money, it takes continual effort, marketing, investments, and time to continue to grow the business to a point where she is mailing soaps across the country or even the world.

It is easy to start a project, but without careful planning it is like setting off on a journey to an unknown destination without a roadmap.

Here are some steps she forgot to take:

  1. A well developed business plan. The business plan clearly defines the purpose, structure and direction of the business. Should you need investors or financial support, a business plan is critical. “It is easy to start a project, but without careful planning it is like setting off on a journey to an unknown destination without a roadmap, said Stefan Topfer,  CEO of “You might manage to make it to your destination eventually, but don’t be surprised if you get really lost on the way!”
  2. The paperwork. A business name should be registered with the state, licenses and permits should be obtained and an accounting system should be put in place. While this step is time consuming and can be costly, it will protect the small business owner in the long  run. If you are baking goods out of your home and selling them, you need a permit. If you are a mobile personal trainer, you need insurance. These steps protect you should a customer get hurt or become ill from using your services.
  3. A promotion campaign. Today, most small businesses depend on building their brand through social media. It seems easy to sell items online because we see people find success everyday, but there’s a lot of strategy put behind those Instagram posts. Everything from color, font, and even the time to post is meticulously planned. Consider your audience, post frequently and be consistent.

Selling creations from your hobby is not a bad idea, but trying to make profit enough to sustain a growing business and a family might just be. Should you be successful turning a hobby into a business, find another hobby. A hobby should be a distraction to clear your mind from work and the other responsibilities of life.  Working mothers, in particular, are in need of setting aside personal time for relaxation and fun to avoid burn out.

Have you turned a hobby into a business? We’d love to hear your story.

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About Shannon Trigos

Shannon Trigos is a mom and executive director of a small non-profit. She is in school for her Master’s degree in journalism and enjoys art, music and nature.

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