Hobbies have many benefits, from helping you relax to giving you something fun to do with friends. However, if you've been doing your hobby for some time, you may be wondering if it could also be a way to make some extra cash.
For a large number of successful business owners, the humble hobby was the beginning of a thriving company. Is this the path for you, too? A side hustle (part-time business) may just be what you need to grow your income gradually while still enjoying the hobby you love most.
Good hobbies to monetize
There are hundreds of things you can sell these days, and that's why hobbies can help you figure out the right business for you. Ask yourself the following questions to determine if your hobby has potential:
- Do I enjoy this hobby? Could I see myself doing it for many hours a week?
- Can I make a profit with this hobby? Can I price it high enough to cover my expenses and make it worth my time?
- Do I have customers ready to buy? If not, what can I do to tell others about my business?
- What other businesses exist that are selling similar products or services? How will I stand out in the market?
- Would this business idea require a business license or other administrative paperwork from the state or city I live in? Am I willing to complete this process?
- Am I able to track things like expenses, sales, and tax liability?
- How much am I ready to invest in starting this business?
- Am I OK with not making money on it for a while? If so, how long?
If your hobby is something that you could make money from, it's legal in your area, and people have or would pay for it, it's a good option to consider. This includes selling things, making things, sharing ideas, or doing services for others who don't want to do them on their own.
Choosing the right platform to monetize your hobbies
Deciding where to sell your products or services depends on your market or who you want to sell to. While it's possible to sell in more than one place eventually, it's easier to focus on just one platform when you're first starting out. Notable options include the following:
- Amazon — Sell new or used items or dropship items from other distributors. Amazon has a high reach since most people search Amazon first when shopping online.
- eBay — Sell new or used items, including books, collectibles, and hard-to-find items. eBay features both an auction or buy-it-now option for selling your items. It's easily integrated with PayPal payments.
- Etsy — Allows businesses to sell homemade items (digital or physical) as well as vintage items made by other people or supplies that will be used in a homemade piece.
Target and Walmart also have third-party marketplace options.
You may find that it's easier to sell your items in person. Try garage sales, consignment shops, farmer's markets, swap meets, and festivals that allow vendors to set up tables. You may have to pay a fee to take part in these events, but you'll get face-to-face experience with your customers and won't have to deal with shipping.
Finally, if you want a mix of technical support while not having to share your profits with a marketplace platform, you might choose an e-commerce tool like Shopify or WooCommerce. These companies provide the technology for your own online shop, but you're responsible for all the marketing to get customers to your site.
If you choose to sell a service rather than a product, you have many options, as well. Sites like Upwork, Fiverr, and PeoplePerHour let you sell your expertise or skills at a price point you set ahead of time. They make it easy to track payments, taxes, and income. You might also try setting up a free website through Wix or Weebly and use word-of-mouth advertising to tell people about your service.
Marketing strategies to promote your side hustle
How can you get the word out about your business? You can start by taking advantage of the tools available on the platform you use for selling. Etsy, for example, allows sellers to opt-in to their Google Ads program so products show up in searches. Other platforms offer similar benefits, and the price can range from free to a higher percentage of the fees they take from your total sales.
You can also set up your own social media accounts for your business and promote from your own pages. For example, if you use Instagram, creating a Reelz showing off your craft process can attract new customers who like to follow new art trends.
Don't dismiss the opportunity to network with others in your industry. While you may see other business owners as competition, you can learn from others about what works and what doesn't. There may also come a time when they need to refer business to someone else. Having that relationship built in advance can benefit you.
Financial tips for managing your extra income
If you're like most people, you already have an idea of what you'll do with your side hustle income. It may be designated for paying down debt, helping a child through college, or saving up for the down payment on a new home. Whatever the goal, the best way to meet it is through a careful accounting of every penny you spend on your new business.
Be sure to use some form of basic accounting software to help you track your money. Not only will it tell you, at a glance, if you're making a profit, but it can also help you when it's time to pay taxes.
(Note: The IRS gives guidance on what qualifies as a hobby versus a business. Reference it to see how to handle your extra income; you may be required to pay estimated quarterly income taxes to both federal and state authorities.)
Side hustle next steps
One of the best parts of turning your hobby into a business is that you get to do something you enjoy and make money from it, too. You also don't have to figure it all out on your own. Check out the Netspend blog for more financial tips.
