If you need extra cash, you might ask your boss for overtime or search the classifieds for a part-time job. These efforts can certainly pay off and generate extra money each week or month, but there's a chance that you won’t enjoy your work.
Fortunately, there is a better way to make extra money. In fact, many people are making money every day by turning a hobby into a cash generating business. For example, someone who loves to write might moonlight in the evenings as a freelance writer; and a person who loves musical instruments may spend his or her free time giving music lessons to adults and children.
Creativity and self-motivation are certainly extremely important to bringing in extra income. However, before you get excited and create a business plan, there are some pros and cons to turning your hobby into a business.
#1. You’ll earn money doing what you love
Whether you need cash to pay off debt, save up for a down payment or plan a dream vacation, there is no better way to make money than doing something that you love. And if you don't particularly enjoy your day job, turning your hobby into a side business can be one of the simplest ways to add money to your bank account.
Of course, this requires a lot of groundwork. You have to purchase startup material and promote your business. But if you're a passionate go-getter, you can easily recoup any initial investment and add to your cash reserve.
#2. You’re already familiar with the business
Since this is your hobby, you know the ins and outs of this particular business. Therefore, you don't have to spend weeks or months researching and educating yourself on every little detail, nor do you have to pay for training. You can immediately offer your services and begin earning cash on the side.
#3. Income isn't dependent on your employer
Turning your hobby into a side business not only helps you reach financial goals, such as paying off debt and increasing your savings account, it can provide another income stream during a financial crisis. There is no such thing as true job security. Even if you're a loyal worker, your employer may hand you a pink slip. Losing a job is stressful, but with a money-generating side business, you're in a better position to get through the tough times.
#4. Set your own hours
Unlike getting a part-time job to supplement your full-time income, you can control your schedule with a side business. In other words, you decide when you work, and for how long. There is no time clock to punch, and no employer denying your request for time off.
#1. Your hobby might lose its appeal
Having a hobby is an excellent way to unwind and recharge after a long week. But unfortunately, turning your hobby into a business can impact how you enjoy this pastime in the future.
Right now, your hobby might be something fun that you enjoy in the evenings or on the weekend. However, once you turn your hobby into a business, you can expect a measure of stress — it’s an aspect of running a business. No matter the venture, there will be ups and downs. And if the business side of your hobby brings added stress to your life, the hobby may lose its appeal and become nothing more than another job.
#2. You might be unable to find a work-life balance
Then again, if you discover that your hobby is an easy way to earn extra cash each week or month, you may spend all of your free time making money — especially if you're extremely passionate about the activity. If you enjoy every second of running this business, you run the risk of losing yourself in the business. You may develop a habit of working day and night, and you might not spend quality time with family or friends, nor enjoy any “me time.” And if you continue to work full-time while running your business, you could burn out.
#3. You'll have to wear many hats
In addition to potentially becoming a workaholic, you'll have to wear many hats after turning your hobby into a side business. In the beginning, you won't have enough income to hire help. Therefore, you're responsible for administrative duties, advertising, sales and customer support. Even if you enjoy what you do, you may not be fond of certain tasks related to your business.
#4. You'll have to pay taxes on your income
You're required to pay income taxes on any profit earned from your side business. Unlike a job, you're responsible for keeping accurate records and paying your own taxes. And if you don't plan accordingly, this can trigger an unexpected tax bill at the end of the year. In addition, there's the expense of hiring an accountant if you're itemizing your returns and writing off business-related expenses.
Have you turned a hobby into a business? Do you think it’s a good idea? You’re thoughts and comments below please…
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