Turning a Hobby into a Business With a Merchant Cash Advance

Posted by Karen Erdelac on Feb 9, 2016

Turning a Hobby into a Business With a Merchant Cash AdvanceMany businesses grow in a natural, organic way from a hobby into a business, some into very successful full time businesses. Sometimes you start doing something because it's fun and you enjoy it, then friends and family start asking you to do it for them. Soon, word gets around and you have a nice side income. But turning a hobby into a profitable business takes intentional planning and investment. Here are some steps to take if you want to turn your hobby into a business.

Decide on a Structure

There are many different ways to structure your business, from a sole proprietorship to a corporation. A financial advisor can help you decide what structure would fit best with your goals for the business if you can’t figure it our on your own. For some structures, like corporations and partnerships, there is some paperwork that has to be filed. Even sole proprietorships may benefit from having a tax ID number and form professional financial help to set up record-keeping and handle taxes, etc.

Separate Business Finances

A separate bank account for business income and expenses is necessary for proper record-keeping. When you have a hobby, you buy supplies out of personal funds, but a business can deduct supply costs so that you don't pay taxes except on your profits. Mingling personal and business accounts makes it very difficult to keep track of business income and expenses.

Market the Business

Turning a Hobby into a Business With a Merchant Cash AdvanceSetting up a website or marketing through Facebook and Twitter can help the business grow in sales. The more people that know about the business, the better chance of making sales. Marketing does not have to be expensive, but there is a cost in either money or time. Keep in mind that time spent marketing is time that can't be spent producing goods or services to sell.

Make Plans and Goals

Where do you want to be this time next year? In 5 years? Making plans and goals helps keep you motivated and contributes to decisions that will move you forward. Goals and plans make every business more likely to succeed.

Make a Budget

If you are hoping to turn your hobby into a full-time business that supports you and/or your family, you will need to spend some time figuring out how to make that happen. It's important to know how much product/how many services you need to sell to make a living from your hobby. You also need to know how much to budget for supplies and other expenses, such as office or work space, taxes, health insurance, etc.

As your hobby expands into a business, it may need infusions of cash from time to time in order to become profitable. If your hobby has produced income you may qualify for a merchant cash advance from Quikstone Capital Solutions that can help you develop grow the business even further. Apply now to see how much your business qualifies for.

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Topics: Grow Your Business, Merchant Cash Advance