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When a Hobby Becomes a Business

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Some people's businesses begin as hobbies. They let off steam (or save money) by building furniture, and then people take notice and ask to have something built. Other people have hobbies that stay hobbies, and that's cool too. In the case of Jessamine, it was not a hobby but a critical need for her family to have gluten-free food. But Jessamine can't work for free, simply to provide her neighbors gluten-free food. She needs to provide for her family and have a reasonable return on the investment of her time, talent, and treasure.

So when does a fun, helpful, or important activity become a business? There are several markers for when that occurs. It starts to become a business when you:

 Invest in commercial equipment to make things faster

 Sign a lease

 Quit your day job

 Hire employees

 Begin to take substantial sums from your savings, or you pay for the activity on your personal credit cards, or both

Somewhere along the line, when you've passed enough of these markers, you're a business. Becoming a small business is a very big deal. Now you have other people and their families depending on you for their very livelihood. You may be taking on liability if someone slips and falls in your establishment, or if a product you sent from your online business gets misused in some way.

It's at this point of becoming a business that people need to ask once again: “Why am I doing what I'm doing?,” but the fact is most people don't ask it again. As far as I can tell, most of the SBR businesses did not ask this critical question. They started the activity, and their “why” at the time might have been clear. Then they gradually morphed into a business, but nobody told them to ask that key question once more.

A business needs to have a purpose, and the purpose can be anything you want it to be. It can be that you're going to run a nonprofit bakery, or that your town needs a combination golf course and community center that will be run partially through donations.

The problem happens when someone is running a store or other organization that's become a business and they reach their breaking point. They get to the place where they are often overwhelmed and not making enough money to pay themselves. They're running today's larger business with the “why” or purpose that they started with five years ago, when it was just a hobby.

For the vast majority of businesses we've worked with over the years and most recently showcased in SBR, their current purpose doesn't typically involve making a fortune and becoming a national sensation; however, it does involve making a living, which certainly is a reasonable and necessary goal.

Small Business Revolution

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