The Difference Between a Hobby and a Business

There are many misconceptions when it comes to starting a business.  

The biggest misconception is that a person can turn their skill or a well-loved hobby into a business.  

The good news is you certainly CAN turn a passion or skill into a business. If you know how. 

Whether you’re a builder, a craftsperson, a writer, a web developer, a barista, an artist, an inventor or a plumber – the list goes on – in order to have a viable, profitable and successful business, it’s imperative to understand business systems. 

As a cheese maker, your business is not the cheese – it’s your business systems. As much as I love cheese – who doesn’t?! – your business won’t survive on cheese alone. There are so many more precious ingredients.  

To unravel this more, let’s look at the difference between a hobbyist and a business owner.  

A hobbyist: 

  • Sells their work for time and materials  
  • Focuses entirely on product  
  • Has a passion but isn’t sure how to turn that into a business 
  • Earns an income that equates to employment in that same field 
  • Gets paid by the hour (for services) 
  • Is creative  
  • May be lacking strategic business skills 
  • Is having trouble leaving their day job to run the business full time 
  • Enjoys this activity as a leisure or pastime  
  • Doesn’t plan their days productively  
  • Doesn’t understand how to maximise income  
  • Relies on word-of-mouth as a marketing strategy  
  • Has been doing things the same way for many years and the business isn’t growing 

A business owner: 

  • Focuses on business systems  
  • Always looks at their competitors  
  • Constantly assesses consumer behaviour  
  • Created this business with the intention of making a profit  
  • Has built a commercial website  
  • Has plans to grow the business
  • Does whatever it takes (morally!) to build the business  
  • Takes a laptop on holidays 
  • Knows how to turn the hobby into a viable, profitable business 
  • Creates actionable plans to see it through 
  • Cares about the entire business, from finance to marketing to product and everything in between   
  • Focuses on the USPs of the business 
  • Knows how to differentiate the business in the marketplace 
  • Lives and breathes the business  
  • Works ON rather than IN the business 

So, are you a hobbyist or a business owner? Can you see a future in the long term of your business? How is it going to make a sustained profit in the years ahead?  

If you think you may be a hobbyist, fear not. There are ways you can still build your business! 

  • Get educated to understand business systems  
  • Maybe you need a business partner on board to fill the gaps (ie the things you hate doing!)  
  • Hire employees to work IN the business 
  • Employ specialists, ensuring they know more than you do in their field. (Ie web developer, logistics manager, marketing manager, graphics designer…) All the failure rates point to owner/operators.  
  • In order to hire people, sacrifice elsewhere in your life – small sacrifices today will lead to extraordinary gain tomorrow 
  • Write a business plan if you haven’t already  Differentiate the business from any other in your marketing communications 
  • Get partners and advocates on board and find businesses who could be pointing people in your direction. (They make dresses, you make shoes – voila!)  
  • All the failure rates point to businesses with less than 500k revenue. Push yourself out of small business and into medium to big business.  
  • Get your turnover up over 2m per year and aim to employ five staff 
  • Get wider in your market  
  • Get a growth mindset 

The reason you need to grow your business is simple.  

Upon speaking with other owner/operators and you’ll quickly discover that there’s no lifestyle when you’re a sole trader. They are struggling. They are suffering. They are knocking on doors to get business. They haven’t taken a holiday in years. They are worried about every dollar they spend, because they physically worked for every dollar they earned, rather than finding ways to make money work for them.  

Sole traders have created a business that they work IN, rather than a business they work ON. Happiness is always on the horizon, but is never truly theirs. It’s no way to live for 50 years of your life and it breaks my heart to see business owners like this, chained to their business with little to show for it. 

To get a lifestyle that you aspire to, you need to grow your business. 

It’s time to take your business to the next level.  

Learn more in the Business Foundations course or take the Am I Ready to Start a Business Quiz  




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