One of the main reasons we have a hobby is because we love it, whether it’s gardening, restoring antiques, weightlifting, or pottery making. That can mean we’re passionate about it. And passion is one of the elements of psychological capital needed to run a successful business — why spend your time on a business you don’t like? It’s a pretty safe bet that you also know quite a lot about your hobby, which will be an advantage if you choose to make a small business out of it.
Considerations about hobby-based small businesses
Passion is fantastic, but turning passion into profit takes serious work, and a serious understanding of how to run a business. You may know a lot about your hobby, but you know it from a hobbyist’s point of view, not an entrepreneur’s. You may be able to compose, shoot and develop the perfect photograph, but can you source suppliers? Negotiate contracts? Find tax breaks? Ask yourself if you’ll still enjoy your hobby once the more stressful everyday components of entrepreneurship are mixed in.
Entrepreneurship is a lot of work, and starting a small business doing something you already enjoy is a huge motivator in getting up every morning and doing all that hard work. You can turn your hobby into a small business, but make sure that you have a good foundation of small business knowledge and skills too – that’ll help turn your great business idea into a successful business.
Last week I was doing a little housekeeping of the computer kind – creating folders, organizing or deleting old files, disk defrag (yes I’m a nerd). I had the opportunity to open the original business plan I wrote in early 2009 for GoForth Institute (then called Small Business Innovation Centres, or SBIC). At the time, I was still a professor teaching entrepreneurship and hadn’t committed to leaving my cushy job yet to pursue my grand idea. I was still in dream mode.
Looking at that original business plan two years later, what struck me was how little the company I founded and run today resembles the plan. My plan for SBIC was a series of retail, street-level “innovation centres” across Canada where small business owners would find classroom-based education and small business training, face-to-face counselling, networking opportunities and access to microfinance.
Great in theory. Until you run pro-forma financials and discover your chances of ever being profitable are zero. End of that business model!
Fast-forward two years. Now, we have the leading online education program for entrepreneurs in Canada (no street level storefront for us), our education is delivered in partnership with the federal government and strategic partners (who provide the face-to-face counselling and access to microfinance functions), and because we’re online, our education can reach entrepreneurs in every corner of Canada (something the original SBIC concept couldn’t).
What’s the point of this post, you ask? How come the business I run today isn’t anything like the one I planned? The simple answer: I wasn’t married to the original concept. My original business model sucked, actually. It wouldn’t have worked. But I was willing to start and to accept the very real possibility of failure.
Here’s how to be a business accelerator
Be willing to follow your nose to cashflow, wherever it might be.
Be flexible and adaptable – don’t stay married to your ideas if they are not producing results.
Be willing to admit defeat – move on knowing that the right business model will be discovered eventually; hopefully in your lifetime!
Be proud – only one idea out of every 2,000 business ideas is ever acted upon – if you’re an entrepreneur you’ve already taken action. And that’s a good thing. The trick now is to continue to accelerate your success, not prevent it.
The secret to writing a good business plan is that there is no secret to writing a good business plan. Writing a solid, actionable business plan requires research, planning and execution just like any other small business undertaking.
Business plan = business model + business opportunity
Business plans begin with a business model, which are two very distinct things. A business plan is really just the written execution of a good business model. Find out why a business model is important here.
Of course, business models begin with an amazing business opportunity – which is different from an amazing business idea – don’t get this former professor started! Soon-to-be entrepreneurs find they have a lot to learn about opportunity identification, crafting a business model, writing a knock ’em out of the park business plan and then executing the plan – all while being flexible to respond to changing market dynamics.
Ninety percent of a business plan won’t help you
When I was developing the business concept for GoForth Institute – researching market size, polling small business owners, discovering its market potential – I got to the stage where I had proven the size of the business opportunity and the likely success of an online education program for entrepreneurs. So I stopped writing the business plan and just launched the company.
Typical entrepreneur. Because we had no written strategic marketing, financial, HR or operations plan, we experienced levels of stress that a completed business plan could have prevented. I did complete the business plan, but not until after we launched. Entrepreneurship is an ever-evolving beast, so being as prepared as humanly possible isn’t just a bonus – it’s a necessity.
Need more help? Get your free downloadable one-page business plan outline and a great business plan template on our website.