Monday | 18 May | 2020
By Wilma Bedford
To convert your trade into a profitable hobby in not that simple. It requires planning, dedication and the right attitude.
As a motor mechanic or an electrician you may have performed tasks for friends or the neighbours outside of working hours or over weekends, or even manufactured kitchen cabinets in exchange for cash in hand. Perhaps you have baked a wedding cake or two and then decided that you would like to start your own small business – especially in the current post-Covid 19 climate. However, there are various factors that you have to consider before taking that step.
- Is this the right time to let go of your career and devote your trade knowledge to a possibly profitable hobby?
- Do you possess the perseverance for this? Are you the kind of person who can plan and see opportunities in the midst of setbacks? To dream is not enough, you have to set your dreams in motion.
- Ask yourself if currently you are applying your trade skills to artistic creations that you find satisfying and that have small market appeal, or are you actually meeting a need. Are you for example creating sculptures or do you make clothes for the informal Saturday market?
- How successful have you been/are you thus far with your hobby? Are you satisfied with the income that you have generated up to now and with the product that you deliver?
- Can you market yourself, among others on social media, and do you have sufficient knowledge of web-building platforms to build a website on which you can market your product?
- Can you truly make enough money to pay accounts? Consult a financial advisor, understand the risks and the financial growth potential.
- Which element of your trade skill can you apply in a profitable hobby or a second career?
- Can you handle criticism and set-backs?
- Will you still enjoy it? How will you feel about practising your hobby a few hours a day compared to doing it every day the whole day and even over weekends?
- Are you willing to augment your qualifications? Will you for example enrol for a fashion design course, even though you already can make clothes?
- What will you have to sacrifice to make it a full-time career and generate a regular income? What will you have to do without, for example a fixed salary or a second car or a holiday?
When you finally decide to take the step, there are still a few things you have to consider, one of which is tax that you will come into contact with sooner or later. SARS also holds benefits for you in that you can claim rebate on certain things and under certain circumstances. However, the question is: Do you run a profitable hobby – on which, strictly speaking, you also have to pay tax – or are you running an emerging business? SARS requires that you deliver proof of financial records, a separate bank account for your business, your registered business name and business structure, VAT registration, and the number of working hours you spend on the business.
It would be advisable to, before you take the plunge, contact a financial advisor regarding financing, tax, legal business aspects, a business plan and to look at the viability of your project and where you can apply for financing.
Keep your product simple and your business uncomplicated. You may be tempted to kick off with baking elaborate wedding cakes or producing period furniture, while your prospective clients live in a conservative neighbourhood with limited income. Therefore, keep your target market in mind. Where does your market lie? As carpenter or furniture manufacturer it would benefit you to focus your business on the middle- or higher-class areas, as most people prefer to buy finished products due to their immediate availability.
If you need special equipment for your business, you might consider buying them second-hand on websites such as GumTree or at auctions.
Don’t focus on the competition – it could derail you, but stay true to your brand and your vision. At the same time, you should also not stagnate, but remain innovative. If, for example, you deliver meals from your kitchen or run a home industry, you could think about becoming a ghost kitchen, where you have no counter but sell your product online of even do deliveries; or if there are pizza businesses in your area you could offer to provide them with vegan pizzas.
Listen to feedback. Discuss your plan with experts and listen to their opinion, they might possibly see stumbling blocks that you have overlooked.
Plan how much time you will need to get your business going and how much time you are willing to spend on your new enterprise. Take your personal life into account; if you are on the verge of getting married or have to pay off a large bond on your property, it might not be the right time to do this.
When your hobby becomes a business.
Schubert, M. Management Your Business Magazine. http://www.bizmag.co.za
8 Things to consider before turning your hobby into a career.
Huhan, H. 2018. http://www.glassdoor.com
* All information was correct at the time of publication.