My sister-in-law is fantastic at wedding planning, arranging flowers, and pretty much anything to do with social engagements. The problem is she really has a hard time asking for money and just likes doing all of this as a hobby. However, the reality is it costs money and her “customers” would gladly pay something for what she does only she has no interest in the bookkeeping and financial end of business management. She has said, “I do this because I love doing it and if I start a business I might begin to dislike it”. I got to thinking about this and thought why not have the best both of both worlds? What if we found a way she could cover some of her expenses and she could share her talents with others?
Well, God is so good about giving inspiration! I am in school and have met so many fantastic people with truly AWESOME ideas. What comes next is a compilation of ideas and be forewarned it is like your neighborhood buffet restaurant; your just browse, take what you like and leave the rest. I make no claims this will solve all your wildest get rich dreams or fix your financial woes. I am sharing some thoughts and ideas. Here are my disclaimer and hold-harmless agreement, if you continue to read your agreement to assume all risk and use this as a springboard for some of your own ideas. (Plagiarism is encouraged here!)
What is Your Passion?
First, you have to decide if this is truly a hobby or not? That is a really hard question. Take some time with this and think about where you are going with your service or product. Do you have fun doing it? Here is a stinker of a question; would you do it for free? There must be hundreds of self-books on the shelves that delve into the motivation, financial risks, family dynamics, and personality types if this topic requires more thought I would suggest doing an internet search or a trip to your local book store. I am assuming you are past that point and will press on to the next item.
If you are reading this, then it would be nice to get a little cash for what you are doing right? Or maybe you already have gotten a bit of cash and might want to expand into a full-fledged operation. Let me just say if you are thinking about a small limited liability corporation then stop reading and go get an attorney to start the process this article is not for you. You can do this by yourself if you want, most local office supply stores carry the forms your need. This is geared for those who want to experiment a bit before heading to the “deep-end” as a big business owner. Now you are probably asking yourself at this point who is this person and how does she know anything about business? One, I owned and operated a daycare. Second, I have been very successful at selling real estate as a full-time job for over five years. Even though I was successful and made money, I closed both businesses because I just didn’t like “love” the work. Even if you are really good at the job, if you don’t love the work, it is hard to be your own boss.
Let’s Get Started
Okay, so let’s get started! You will need just a couple of things you probably already have lying around; something to write with and a pad of paper. Some of your high-tech individuals may choose to use your computers, laptops, tablets, or phones. It really doesn’t matter, use what you are comfortable. Here is what we are going to do with a list of additional items. I ran both of my businesses with a phone and a file box. I typed and Xeroxed my contracts for my daycare, ouch!
1) Legal Zoom is great and fairly inexpensive if you need specific business advice
2) Set up a method of payment
a) gofundme.com account – crowdfunding or fundraising donations https://www.gofundme.com
b) Square account – will take credit card payments https://squareup.com/signup
3) Model release forms – if you want to take pictures of people to use on your blog
4) 3×5 small spiral pad – record mileage and/or expenses
5) Separate personal checking account – we will go over the reasons why your need to keep the money separate
6) Business cards from vistaprint.com – word of mouth advertising is the cheapest and most effective
7) File box with folders to keep your receipts and any paperwork
8) Start a blog or web page – yes this will be separate from your Facebook page, it needs to be professional http://www.websitebuildertop10.com/start-a-free-blog
9) I needed someone to hold my hand and show me the ropes so I opted for this site: https://www.wealthyaffiliate.com/websites/ – (Following these guys training approach you might make a few bucks on your blog posts)
Okay maybe you were like me and you are borrowing a friend’s computer and think you can’t do this because you don’t own one. Well, let me take your excuse away because unless you are living under a rock, I am certain your local library has at least one computer you can use. I never tell anyone to spend a lot of money or go into serious debt! The internet is your friend, do your research and read! If the person who wants to help you wants money upfront first you need to ask one question, do they really want to help me? Or do they just want my money? For example, did you pay for this article? But don’t take my word for it, here is a link to someone who seems really successful and may have more useful tips than I can give you. Paid to Exist is a website for those of you who are looking to fund your ideas and build businesses. https://paidtoexist.com/how-to-fund-on-kickstarter/
Tracking Your Profit
Now on to pay some of your expenses, you need a separate checking account. A personal checking account is fine. The bank may or may not ask you if this is for a business and how your answer is up to you. You can easily answer your hobby is very robust and keeping track of the expenses becomes difficult. When it comes time to do the taxes you will be glad everything is separated for easy accounting. Hubby has always done ours using TurboTax and paid the fee for representation. Now we don’t cheat, it is just a control thing and the TurboTax pretty many walks you through the process. Having a separate account is needed if your plan to take payments through Square or donations from gofundme. The registration process will ask for an account.
This section is based on your comfort level. Are you uncomfortable asking for money like my sister-in-law? Then the gofundme.com option is probably the best. When you navigate to the website it has all the instructions your need. Here is how it works. You describe your product or service and set dollar amounts. There is an option to post a picture with descriptions. This is a FREE way to get your idea onto social media for others to see and make donations or purchases. Yes, I said free because it is called crowdsourcing. At the end of the registration, a gofundme.com address will be provided. Save this because you will need it to post to your blog/website and print on your business cards. All you have to do is tell your clients or customers about your gofundme or give them your business card and then the rest is up to them.
There must be a hundred ways to get inexpensive business cards. I like to use vista print. I have been using them for years. It is fairly simple and doesn’t take a lot of technical experience. There is usually always some sort of special or promotion going on and other products if you want or need to purchase them. Most everyone has a cellphone, email account, and a general idea of what the card should look like. One recommendation-keep the card uncluttered and simple. It is up to you if you want to put your address or not. I have a couple of different cards. A professional one to give out with my credentials minus my address and another that is more personal with all of my information I save to give to friends etc. When I checked the cheapest cards were 8 dollars plus taxes and shipping. That is not a bad price for a very basic card. The site offers all kinds of advice if you are undecided. https://www.vistaprint.com/business-cards
Keeping track of expenses is what drives most people and the accountant crazy. I did this when I had my real estate business and it worked pretty well. I kept a small spiral notebook in the car I used and wrote down the beginning odometer mileage and the ending mileage when I was out showing the property. Be sure to log the date. If you use an accountant he or she may have more specific advice. This little book is also a great place to log the oil changes, tune-ups, tire rotations, and basic vehicle maintenance that might be involved in what you are doing. A legal-size envelope is also great to have in the glove box to hold receipts. When tax time comes around everything is all together for that section. God forbid should your get audited, all of your documentation is together in one place.
Whether you can “write off” a specific area of your home, cell phone, home telephone, or garage will be up to your accountant or tax laws. I recommend doing a little research and reading. I did have a home office I used but was very careful in this area. We tended to underestimate to be safe. The trick is to stay organized. Having a cardboard bankers box or plastic file holder to hold your paperwork is mandatory. Start from the very beginning and get something to hold your paperwork, receipts, and things you have researched. Do not wait until tax time and try to sort through the piles of receipts and paperwork it will drive your crazy. As far as I know, if you receive more than $1,000 you will have to claim this on your taxes. Even if you receive it and then donate it back to charity it has to be accounted for receipts.
So there are a couple of options for keeping track of the monies. The old-fashioned pencil and paper which I used for years. Or a software program. Now that you went to the bank and got that separate account this portion will be really simple. Some banks have their documents online. Since you are already keeping a household budget then your hobby budget should be pretty much the same.
Well, by now you have your new checking account, set up either a Square or gofundme, have some really cool business cards, and a way to keep track of your expenses. What is next? Are you having fun and doing what you LOVE with your hobby/side project? That is really what this article started with anyway. This was a way to possibly capture some money doing it or a way for your clients/customers to show their appreciation. If you wanted to take it one step further, a blog or website is the next level. I ran a basic internet search. I found one with templates, a free domain name, and a very low hosting fee. Remember to get your models to sign a release if you take pictures of people, especially children! I found a website FormSwift that will generate free PDF documents for your state. The form is a release of liability allowing you to post the pictures and use them for advertising etc. Above is the link for one search to get you started if you wanted to go to stage two. Well, this just about wraps it up for what your need to get started. I am still working on my website and will keep your post.