How to Turn Your Hobby Into a Profitable Business

Introduction

If you do what you love, you’ll never work a day in your life. These golden words by Marc Anthony often motivate many people to pursue their hobbies actively. However, while there’s some truth to this expression, there’s more to learn if you truly want to monetize your passion.   

Transforming your hobby into a business means that you’ve got to satisfy customers’ demands. And not only that, but you also have financial goals. Otherwise, you might just end up hating what you love to do best in the long run. To save you the frustration experienced by most entrepreneur-hobbyists, we’ve come up with tips on how to develop a new product idea. Check out these crucial business elements you should set in motion before diving into the ocean. 

• Do exhaustive research

Hobbies are exciting. As you engage in your favorite activity, the brain releases endorphins – the feel-good chemicals. So it’s absolutely normal that you want to pursue your passion since it makes you feel elated. But you should bear in mind that passion alone will not take you far in business. How do you intend to sustain your business if no one is buying your product or using your service?

To be on the right track, you must dedicate sufficient time to research. Survey people’s needs for the product idea. What is your target market, and who are your competitors? Getting such data and information lets you know whether your idea is viable or unprofitable. And you also get to know how to develop a new product.

• Choose the most suitable business model

You cannot learn how to develop a new product without having a suitable business model. A good business model helps in keeping your expenses in check. If you’ve got a good business model, rest assured that your cost price won’t be higher than your selling price. And you can make more profits. 

Here, you need to scribble your product cost per unit, the selling price, and customers’ financial capacity. Do you want to run your business in a conventional mortar and brick store? Or are you looking to work from home? Which online platform affords you the widest reach? Do you want to outsource an aspect of your production? Do you need a business partner? These metrics help you know how to design and develop a new product idea.

You shouldn’t proceed to the next stage until you’ve provided satisfactory answers to the questions. 

• Have a good business plan

If you venture into a business without a solid plan, you will likely crash out of business in a short while. In fact, Harvard Business Review affirms that if you write a formal business plan, you’ve got a 16% greater chance of succeeding.

Business plans may sound simple, but you shouldn’t underestimate their importance. They are a reliable way that helps you know how to develop a new product. Having a business plan lets you know if you need a loan for your new business. Also, the blueprint should contain the products or services you intend to render, the management team, marketing plans and strategies.    

Note that you may need to update your business plan as time passes. 

• Set milestones

Business plans will remain idle until you give them life. Every business has short and long-term goals. Take a look at your business plan. Identify the key activities and set a time limit to achieve the objectives. 

Business will not always be rosy. But when you highlight milestones, you get the needed motivation to keep pursuing your interest. And if you cannot meet your target, don’t fret. There’s enough time to attain that feat. And always put yourself on notice that your business is a long-term project. 

• Test your product idea

You’ve done your homework on the theoretical. Now it’s time to find courage and set the ball rolling. The next step is to validate your idea. You could have a good business plan and still not make impressive sales. Likewise, your business model might appear the most effective, whereas it only spells a downward spiral for your business. 

So how do you know that your product is viable? You could run digital ads and measure the conversion rate. How many people signed up for your newsletter? And how many customers preordered your product? If you get positive feedback, your idea has successfully passed the test of fire. Negative feedback requires that you go back to the drawing board. 

Testing your product idea, therefore, helps to understand how to develop a new product idea. You can make adjustments when and where necessary.

• The place of a mentor

If you look around, you will discover great entrepreneurs have one thing in common – they look up to someone! You cannot wish away the place of a mentor if you want to go far in business. Your passion alone will not sustain you.

Open your PC and check out business gurus who’ve achieved incredible feats in your industry. Reach out to them for some advice. Your mentor could even be an old pal with good standing in business. Let them guide you through the dos and don’ts of business. If you survive the early stages of business, the chances are that you’d make it big by pursuing your interest. 

• Launch your product/service

Launching your new product has to be a big bang. Depending on your budget, hire marketing experts to promote your business. Build anticipation and let there be a buzz around your brand. 

Now we’ve discussed the top 7 ways to turn your hobby into a profitable business. Let’s see examples of people who turned their hobby into a profitable venture.

• Phil Knight

Phil Knight is the brain behind the famous sportswear brand – Nike. When Phil was at the University of Oregon, he was a running back. He was fascinated by how Japanese cameras replaced German cameras and decided to replicate the same in the sports industry. Phil wanted to stop Adidas’ and Puma’s industry dominance. 

To get cheaper sports shoes, Phil traveled to Japan in 1962. He negotiated to be an American distributor for a company named Onitsuka Tiger. He got 12 pairs of shoes from the company, but sales were not encouraging in America.

In 1964, Phil decided to team up with Bill Bowerman, his former coach at Oregon University. Phil recognized that Bill had more industry experience than him. And the partnership proved to be magical as the duo made a whopping $8,000.

The demand was so high that Phil had to start hiring employees. Unfortunately, the Onitsuka Company was not making supplies available as expected. So Phil incorporated his own company known as Nike – in honor of the Greek goddess of victory. Suffice it to add that Nike is now worth over $60billion.

• Lionel Messi

Renowned footballer Lionel Messi is a striking example of a hobbyist who leveraged his interest.   Born in Rosario, Argentina, young Messi was so in love with football that he would kick tins around the streets when he could not find a ball. Realizing his passion for the sport, Messi’s father decided to coach him (serving as a mentor) at Grandoli Football Club at age 5. Messi’s family would relocate to Spain to allow the young lad to pursue his dreams. 

Impressed by Messi’s skills, Barcelona Football Club signed the star as a senior player in 2005. This contract changed Messi’s life, and according to Forbes, he has a net worth of $600 million in 2022.

• Tom Rosenbauer

Tom Rosenbauer is a fly-fishing expert who had commercial success through The Orvis Fly-Fishing Guide, a book he published in 1984. And it may interest you that the book is adjudged the best-selling instructional fly-fishing reference book of all time.

For over 50 years, Rosenbauer has continued to pursue his interest in fly fishing which continually yields massive revenue. His podcast, Orvis Fly-Fishing Guide, currently has over 11 million downloads. 

The bottom line

As a newbie looking to make a living off your hobby, the experience can be quite daunting. Nevertheless, you shouldn’t despair or fear if you want to succeed in the business world. 

If you want to turn your hobby into a profitable business but don’t know how to start, don’t sweat it. At LA NPDT, we’ve got what it takes to help you realize your dreams. We owe a commitment to helping our clients know how to develop a new product.

Remember that the more time you waste developing that idea into a product, the more money you lose daily. So why not take that bold step and book an appointment with our team immediately?