January 12th, 2016
The number of small businesses being started up in the UK is booming. Numbers of startups rose by 28% in the past year nationally, while in some areas the figure was even higher. One survey suggested that around 17% of new businesses arise from a hobby. Often, hobby businesses are home-based in the first instance, so, to create a professional image, business owners may look at setting up a virtual office arrangement.
Crafts and cookery might be the most obvious types of pastime which can be turned into a business. But many other hobbies could equally provide a way into a new career, from collecting to gardening. Also, increasingly people who enjoy building websites or creating apps are taking the next step and setting up their own small digital businesses. So should you take the plunge and join them?
Advantages of a Hobby-Based Business
The very fact that you already pursue this interest as a hobby means it is something you love doing, so the likelihood is that you will have plenty of ideas and energy. Also, in many cases, you already know this is an area you have a talent for and have developed your skills before you start.
You will probably have a lot of the equipment needed before you start, and you are also likely to have built up valuable contacts who may become your customers or give you advice and support. It’s also likely you may have a good knowledge of the firms you will be competing with, and what they offer. Studying these thoroughly can help you to identify what gap there is in the market before deciding to go ahead and fill it.
So What Are the Disadvantages?
When your hobby stops being something you do in your spare time and becomes your livelihood, there can be a risk of losing your original enthusiasm and becoming burnt out. Doing something for fun is very different from working for customers and having to please them. You might find you have to pursue aspects of your trade which don’t appeal to you so much, and there will also inevitably be a lot of administration and paperwork which you didn’t have to spend time on as a hobbyist.
Another danger is that you might not have a realistic view of your own skills and of how much of a market there is for your product. Friends and relatives will probably have been very encouraging about your efforts in the past, but that’s not always the same thing as getting people to buy your work. There could also be costs that need to be factored in. For instance, sometimes the equipment for small-scale production isn’t so suitable for a professional operation.
Taking the Plunge
When preparing to launch a startup, the message from people who have already set up successful small businesses is to do your homework first. You need to work out how much you will have to invest to turn your hobby into business and to carry out proper market research. This will involve looking at what other products or services are available and thinking about what your unique selling points will be.
Another essential step is to sort out finance. Availability of grants and loans can seem rather bewildering as there are many different schemes, with different criteria about who qualifies. Government initiatives include the New Enterprise Allowance, which is available to people receiving specific benefits, and the Start Up Loans scheme, but there are also numerous other options to explore. It’s best to get expert advice on which sources of funding are best for you before making any decisions. Places to start include official Government websites and Better Business Finance, an initiative managed by the British Bankers’ Association.
Once you have weighed everything up, done some market research and decided to go ahead with your hobby-based small business, it is best to be cautious at first. This means keeping down initial costs and not investing too heavily at the outset. However, even if your business isn’t digitally based, you will need a web presence in modern market – whether you are selling handbags, ice cream or gardening services. So one initial investment worth making is to think of a catchy name and logo and buy the relevant site.
Depending on the type of business, one way of controlling costs while presenting a professional image is to use a virtual office answering service. Alternatively, if you do need a small office space to rent, it could be best to choose a flexible deal where you are not tied up for a long period at the start.
When you are setting up your company, getting advice from mentors and established small business owners can also be very helpful. They have been through the early stages of running a business and can help you through prospective pitfalls and answer questions which crop up as you go through the whole startup process.
Basepoint offers a whole range of services ideally geared to people who are just starting out in business. If you are thinking of setting up a virtual office, we provide different packages tailored to your needs. We also offer flexible office space, which means you can move in without having to make a long-term commitment. All our centres, in areas including Tewkesbury, Chepstow and Northfleet, offer networking opportunities, seminars and mentoring. These services can help hobbyists to take a professional approach and become fully-fledged business owners.
Setting Up a Virtual Office – Click here for more details of Basepoint’s services.