Businesses are often viewed from a commercial perspective. At times, the focus is solely on businesses that generate potential profit margins. However there are examples of hobbies that have turned out to be successful businesses if strategized and marketed to the correct target audience. The following are examples of entrepreneurs who have converted their hobbies into million dollar businesses:
Hobby: Horse-racing aficionado
Business: West Point Thoroughbreds
2011 Revenue: $6.5 million
2011 Revenue: $1.2 million
2011 Revenue: $6.2 million
“Do what you love and money will follow” is advice that is well known to many entrepreneurs. But there are certain tips that entrepreneurs should follow before converting their hobbies into profitable businesses.
Do your own research:
Before starting any business, you should conduct a market research to understand your targeted market segment, price sensitivity and the demand for the product. You could also take advantage of ZoomProspector, a free service that lets you find communities by parameters like community size, education levels, and recent job growth. As said, there is no substitute for market research.
You should always know both the intrinsic and extrinsic value of your product. Analyzing the product from the point of view of a customer helps you to understand if there is a potential market for your hobby. Staying focused on profit/loss avenues helps you to avoid turning an expensive hobby into an unsuccessful business.
Cultivate Supplier Relationship:
In any business, suppliers play a very important role in the value chain. This is due to the fact that supply power can dominate your profit margins. Having a healthy relationship with your suppliers provides you with a competitive advantage. For example, making recurring purchases from a single supplier builds a strong relationship.
Marketing your business right:
You would want to make sure that you use the appropriate marketing strategy for your firm. For example, if the age segment of your target audience is between 18 to 25, you would want to use every social media avenue to market your product or service.
Having a cross-functional team helps you to save money in contrast to hiring someone who has specialization in a particular field. Training your employees for multiple roles within the company will help to streamline operations, which is required for running a successful startup.
Read more about the entrepreneurs who turned their hobbies into million dollar businesses.
Thanks for reading. Until next time, stay WISE!