When Your Art, Craft, or Hobby Becomes Your Business

Many small businesses start as hobbies or creative passions. The list is long: metalsmiths, restauranteurs, artists, designers, writers, and anything else that requires an artisanal touch. Here are some tips for how to turn your passion into a successful, long-lived business.

Create A Business Plan

While over planning can seem stifling for many artists, even a creative business can benefit from a simple business plan. This document is where you can determine how your hobby could become a profitable business and what your growth would have to look like over time.

Part of your plan should define a mission statement and list your values, even if you are the only employee of your company.

Any business plan should be dynamic and alterable. You should visit it at least once a quarter.

Use Technology to Sell Your Product

In case it needs repeating, you can use the internet to sell your creative products online. Platforms like Etsy, Faire, and Minted were all built around allowing small artisanal businesses to reach customers.

Social media and other online marketing can be critical for selling your wares in real life, too. How will potential customers know about an upcoming pop-up shop? Where can they find your business hours? Even if you don’t consider yourself an online business, it is essential nowadays to have a web presence.

A simple online presence is a fairly manageable and inexpensive addition to even the newest and smallest creative endeavors. If you’re a creative writer, local musician, or chef, a personal website allows you to plant a flag online so people can find out about and contact you.   

Use Technology to Automate

It may be hard to figure out how to automate your creative business. In fact, automating your process may be antithetical to your entire brand if you, for example, are creating a handmade product.

Still, there are likely areas where you can automate aspects of your business. By looking for these possibilities, you can spend less time doing the less creative work and more time doing the work you built your whole business around.

“Creative businesses, like all businesses, are approaching the point where they will have to sort the automatable from the human, as the workforce undergoes a huge transformation,” Nigel Davies commented in Forbes.

There may be parts of the creation process you can automate – using a table saw to cut up lumber that you then use for woodworking is a simple example. On the business end, there are plenty of services for automating parts of your company, from transcribing recorded conversations to paying taxes to managing meetings to controlling your email inbox.

Find a Community of Like-Minded Businesspeople

It is key to find other people involved in your creative industry — not just for networking or partnership purposes, but for encouragement.

A recent academic study of knitters on a knitting community site called Ravely.com found that encouragement from others was essential for knitters moving from the hobbyist to the professional realm.

It is important to have a community of support both online and off.

The transition from hobbyist to entrepreneur was “facilitated by participation in offline social networks where knitters garner feedback and encouragement,” the report noted. “Importantly, social and human capital appear to complement each other with social capital producing the greatest effect on the most skilled users.”

Finding people in your creative area can help you find new opportunities or learn new skills. It is important to have a support system outside of this community, too; support from friends and family can be critical for staying motivated.

Understand Your Tax Situation

Many creatives do not start out wanting to also be small business owners – if someone offered a good, consistent salary for artwork, plenty of artists out in the world would probably take them up on the offer.

Regardless, that is not how most creative industries function. However, once you start selling a good or service, you become a business in the eyes of the Internal Revenue Service. Even if you think of yourself as a blogger or a painter or a grower of fresh herbs, the IRS will see you either as an independent contractor or some form of company.

The tax situation for small business owners can be an extremely thorny side of owning a creative business. You should think about whether you want to incorporate as an LLC or stay a sole proprietor, among other concerns. A portion of any money you earn from your endeavors should be earmarked for the IRS, and there’s a good chance you’ll have to make tax payments four times a year instead of worrying about taxes only in April.

Obtain the Necessary Permits

Along with taxes, you will likely need to register your business in some form with local, state, or federal authorities. Depending on the business, you may even need to pay for permits.

“Virtually every business needs some form of license or permit to operate legally,” Caron Beesley of the Small Business Administration (SBA) wrote in a report. “However, knowing which one you need, however, can be a little tricky. It depends on the type of business you are operating, where it’s located, and what government rules apply.”

If you open up an airplane flight school, for example, you’ll need to register with the federal government. Some careers, like hairdressing, require professional licenses. If you are selling anything to the public, you may need a sales tax license.

Even someone offering a service out of a home office, like blogging, often needs some form of permit from the local government. The SBA has a service that can help you figure out what sort of permitting you may need on a local and state level.

The permitting and IRS red tape can be frustrating, but it is important to be aware from the outset of your creative business, so you stay on the right side of the law and don’t receive any unwanted regulatory surprises in the future.