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People say doing what you love never feels like work. Turning your hobby into a profitable business is a great way to do that, but the path forward might seem murky.
Use these tips to launch your small business and experience long-term success. You deserve a career you’re passionate about, which you can always start from home.
1. File The Correct Paperwork
The Canada Revenue Agency (CRA) must file paperwork on your behalf before you can sell goods. Start by running a NUANS search to see if your business name is available. If it is, you can register your business number with the CRA and choose a structure, like a sole proprietorship.
Once the CRA confirms your filed paperwork, you can see if specific licences or regulations are necessary for your professional niche. Use the BizPal search site to discover the legal requirements mandated by the municipal, provincial and federal government for your industry.
2. Avoid Buying Too Many Supplies
Getting tons of supplies is tempting when your small business is legally ready to go. Whether knitting clothes or making pottery, you may want to get everything you need to make a tidal wave of orders. However, people won’t know your operation exists yet. Start by stocking a small amount of items to avoid overspending money your brand isn’t making yet.
This is also something to remember if you’re offering services instead of products. People may overspend on ads or website features if they can’t get crafting supplies. It’s better to start with small investments while trying to increase your audience.
3. Create A Business Plan
Anyone can say they want to turn their hobby into a business. However, you must know how to become profitable before it can happen. Business plans are extensive outlines people use to chart their way to financial goals. You can make one for your brand to avoid feeling like you’re guessing about how to run a small company.
Your business plan should include key features you’ll reflect on during your first year, including:
- Your mission statement
- Your specific products or services
- Your chosen revenue streams
- Your audience
- Your competitors and their market analysis
- Your marketing plan
- Your budget for supplies, advertising and other business expenses
Pulling all this information together may take a few days or weeks. You’ll need to research your competitors, study the market you’re entering and brainstorm ideas.
Skipping steps may lead to poor investments or wasted time. If you don’t research your audience, you might not discover that 82% of people shop online, per the latest data. Trying to sell goods or services in a storefront location might not be as successful as offering them through e-commerce due to consumer trends.
4. Determine Best Marketing Practices
The average person spends six hours and 40 minutes online daily. You know you’ll reach them through virtual marketing efforts, but which sites does your audience use while they’re on? Outlining your target demographic will point you in the right direction.
Research shows people between 25 and 34 are the largest Canadian demographic on Facebook compared to site users. You might not have much success reaching people over 50 on the same platform because they aren’t the primary demographic.
Your time and financial investments should meet your audience where they are. You can always expand to other sites and marketing channels as people become more aware of your brand and what it offers.
5. Remember To Find An Accountant
Filing taxes as an employee with a T4 slip is relatively straightforward. Business owners have much more to track than a small piece of paper. A CPA will evaluate essential tax filing factors such as:
- If your records show you are making a profit
- If you have documented expenses
- If you depend on your business’s profit to support your livelihood
Company owners are responsible for paying various taxes, like income and municipal. The numbers can get tricky, especially as your operation grows. Meet regularly with a CPA experienced in small-business ownership or self-contractor taxes to ensure you don’t get a big bill when you file annually in April.
6. Don’t Quit Your Day Job
Businesses take months or years to build into something that might turn a profit. Entrepreneurs must deal with financial obstacles, including inflation, interest rates and a labour force shortage. Other challenges include spreading the news about your brand and building an audience.
It’s better not to quit your day job right away. You’ll continue earning money you could invest into your business and even learn from mentors while you’re still actively around business professionals. Network and start conversations to learn everything you can about company management without paying to attend conferences.
Make Your Hobby Profitable
Your career should be fulfilling and rewarding. Turning your hobby into a profitable business could be the best way to make that happen. Use these tips to launch your entrepreneurial career and find a path to success with minimal bumps in the road.
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