Make no mistake: Hobby-based businesses can become big undertakings. Juggernauts such as Facebook, Chanel and Microsoft all have roots in personal hobbies.
The Panel Study of Entrepreneurial Dynamics II, a multiyear survey of nascent entrepreneurs, found that nearly 26% of budding U.S. entrepreneurs started their businesses from a hobby.
Turning your hobby into a business can get complicated - so much so that there's a risk the work involved could even temper your passion for your favorite pastime. It is, in the end, a commitment that requires hard work.
But with proper planning, you may be able to strike the right balance of success and satisfaction from monetizing your hobby.
We asked career experts and hobbyists-turned-business owners to share their advice and the lessons they learned about starting hobby-based businesses, to help you start off your endeavor right.
Don't expect your hobby to be in-demand
Benjamin Warnick, professor of entrepreneurship and strategic management at Washington State University, told MagnifyMoney that once you add money into the equation, a hobby isn't just about about personal enjoyment anymore; it morphs into a business that needs to create value for customers.
"People aren't going to pay you just to do something you enjoy," Warnick said. "If you can find a way to identify what people value - [Ask yourself] 'How can I make life better for them in some way and how can I tie my hobby to that?' - then you are on to something."
Anna Juhl, a former nurse manager, quit her job at age 54 to pursue her passion for cheese and travel, but she did so carefully. Juhl now runs a business called Cheese Journeys, offering cheese enthusiasts tours in European and Asian countries. She didn't act on impulse; she had a plan.
Juhl, who ran an artisan cheese shop in Salt Lake City back in 2000 while working her full-time job as a nurse manager, did her homework before piloting a cheese-themed tour to Europe in 2013. She knew that food-based travels were on the rise. And she was confident that and her expertise in artisan cheese and love for food and travel would give her an edge in the market.
When her husband's job led them to New York in 2012, it was a good opportunity for her to leave behind her previous career, and Juhl started brainstorming a cheese-travel business.
During the first six months, she found herself spending hours reading up on food, travel and everything she needed to know about running the business. With help from industry experts in Europe, who coached her through the basic tour process, she launched a pilot England tour in 2013, 15 months after quitting her job.
Juhl said she was lucky that she was able to pilot the business with her own savings instead of taking out loans. She had to cover a considerable amount of money upfront, and she lost money in the first couple of tours. The fact that her husband has a good-paying finance job also helps, although Juhl admits that the switch to full-time entrepreneur was not without stress: She didn't take a paycheck for a few years and any money she made was invested back into the business.
Then again, Juhl's initial goal was not to make profit, she said; rather, her new business was a transition into retirement. She was prepared not to make a profit the first few years as she worked toward building a business that would allow her and her husband to travel while having a steady stream of income at retirement.
Looking back, Juhl said self-assessment really helped her focus in this midlife career shift.
"Know what you want from it, how much do you want to work and set your own goal so you build a business that meet your goals and not the expectation of somebody else's."
Indeed, entrepreneurship demands a big-time commitment. The word "passion" has its roots in Latin, meaning suffering, Warnick pointed out, so hobbyists need to ponder how much they are willing to sacrifice before launching their leisure-based business.
Start small, test it out
Nancy Collamer, career coach and author of Second-Act Careers, says it's wise for hobbyists to start testing out businesses as a side gig in their free time.
"Let's say you are great at baking," said Collamer. "What you may want to do is just on a very small scale, offer your brownies for sale during the holidays to some friends."
A side hustle allows you to gauge the market interest and to test out pricing, she said. Once you have a taste of it, put a little more time into the work than you would on a hobby basis. If it doesn't feel right, stop right there before you waste too much money or time on it.
"Keeping one foot in stable employment can really help ease the transition," Warnick said. "So if you have alternative sources of income, especially in the early stage of the business, you can explore and then gradually scale up the the business, instead of putting tons of money into it and then realizing it's not going to work."
You may be excellent at what you love to do, but a business is a business. When you try to commercialize your expertise, there is a lot more work that goes into the process than you would probably have expected.
"That's everything from marketing your services to keeping your books to producing your products, to finding the cheapest materials, to keeping your office clean everyday," Collamer said, "You are doing it all."
The business side of the hobby entrepreneurship - bookkeeping, accounting, digital marketing - can be really daunting.
"Curating researching and building the tour, that was easy," Juhl admitted, "Executing the tour, superfun. Doing all the other related business things can be challenging."
Gianna Leo Falcon, a New York-based freelance photographer, told MagnifyMoney the learning curve was very steep for her, a person who's not quite business-oriented.
Prior to becoming a professional photographer in 2015, Falcon did occasional freelance portraits and headshots. She recalls constant frustrations with clients who booked shoots but ended up not showing up. To protect herself, Falcon later learned to ask for down payments.
"I'm really an artist. I just want to show up and shoot," she told MagnifyMoney. "Invoices and how to get paid online are really confusing. I'm navigating and learning that stuff as I go along."
Figure out your rates
It may be a bit strange to tie money into the things that you love to do, but knowing your market value is extremely important if you hope to profit off your passion.
The hobby community you are in is a great resource for you to find out the average fees. If you don't feel comfortable asking about rates, there are tools available online to help you figure out the value of your time.
This Norwegian website by FINN.no AS, an online classified advertising marketplace, is good not only for figuring out what you should charge for freelance or contract work, but also for determining which things you should outsource. Similarly, BeeWits, a project management software company, also released a freelance rates calculator.
Writers and journalists may want to check out The Freelancer's rates database, where freelancers can add what they've earned for certain projects for a variety of publishers.
Outsource labor if needed
Experts say being your own boss not only requires possessing a variety of skills and knowledge of the business but also knowing your own strengths and when to outsource some of the labors you have no interest in or talent for.
"You don't have to be able to do everything," Warnick said. "So if you got the expertise in the domain of your hobby, maybe you could bring on someone who's a little bit more of the business side who can help you commercialize the hobby."
As Juhl's business has grown, she hired a bookkeeper, a website developer and a publicist so she can focus on the centerpiece of the business - booking and executing the trips.
"It's a personal relationship that I have with people who travel with me," she said. "So I have to make sure that I'm available to do what my role is, really what I'm best at."
MagnifyMoney is a price comparison and financial education website, founded by former bankers who use their knowledge of how the system works to help you save money.