Wouldn’t it be great if you could turn your hobby into extra income? After all, what can be better than turning something you love to do into a little extra cash?
Whether it be saving for a dream vacation, putting aside a little extra money for early retirement, paying off debt, or creating a whole new career and future – turning your hobby into a revenue stream can be a great way to start the ball rolling.
There is certainly a lot of truth to the old saying “Do what you love, and you will never work a day in your life”. But as true as that can be, that statement can also lead down a very frustrating path if you are not careful.
Whether trying to earn extra money or a full-time living, you need to be certain that what you love doing can provide a reasonable income. Especially when you consider it versus the time you are investing.
Perhaps most important of all – and this is a big one – you have to be cautious that turning your hobby into a revenue stream doesn’t frustrate or overwork you so much that it ends up ruining your passion and love for it.
How To Turn Your Hobby Into Extra Income – And Keep It Fun!
One of the most important secrets to making a hobby work as a side business is to first make sure what you will be doing can earn you extra cash. But even more, at a rate that makes it all worthwhile!
Even if you love making small crafts, that love can quickly fade when you realize you are spending 20 extra hours a week making them, and earning $3 an hour or less to do it.
That is exactly why you need to know what your time is worth before ever starting down the road to a hobby-based business. And to figure that worth out, you need to look at every angle of what you might be spending to create your business.
With that in mind, here is a great example of how what you think you might be earning is not really what you are making!
What Is My Time Worth? The Wood Worker Example
Lets say you enjoy woodworking on the side. And you want to turn that passion into something that can earn you extra money.
After all, if you could work a few evenings through the week, or for an afternoon on the weekends and earn extra cash, all by doing something you already enjoy, wouldn’t that be great? It sounds like a match made in heaven, and it can be when done right. But it can also end up being your worst nightmare.
One of the quickest ways to frustration is to work harder than ever, and still barely make a profit. Or even worse, lose money while doing it! Unfortunately, when it comes to turning a hobby into a business, this is the most common failure of all.
The Wood Worker Example – Turning A Hobby Into Extra Income
For the example, we will say you are a woodworker who loves to build picnic tables. Not just any ordinary picnic tables, but beautiful, sturdy, handcrafted picnic tables.
Best of all, you happen to be really good at it. Because of that, you can turn a stack of lumber into a gorgeous picnic table in just under two hours.
You know that it takes $60 in lumber and hardware to build your tables. Because these are hand made and extremely unique, you charge $200 per table. Your customer comes and picks up the table, and you can smile knowing you made $140 profit, or $70 an hour for your skill set.
But before you pocket that $140, you also have to realize it took an hour to go pick up the lumber. But even then, at 3 total hours, you made a little over $46 an hour. You can do a few each week, spending nine total hours, and make $420 in extra income.
Now that is how to turn a hobby into a reasonable side hustle! A limited investment in your time, which keeps your family and free time reasonable. And even more, the knowledge that you earned valuable extra income.
Stick With What You Do Best – The Other Side Of The Story
Here, unfortunately, is how that same scenario can go south in an instant. And learning to avoid this is truly the key to keeping your side hustle fun, enjoyable, and most importantly, profitable!
As you will see, sticking to a plan, and to what you do best is the real key to success.
Don’t Be Afraid To Say No – Turning A Hobby Into Extra Income
Lets get back to the story in a different light. Instead of purchasing the picnic table as you make it, a customer asks you to make it a bit larger with a few special features. And they would like you to paint if for them as well.
Lastly, they don’t have a truck, so they will need it delivered. Unfortunately, this is exactly where frustration and trouble can begin. And here is how it can all play out if your not careful:
You take the job, and not knowing really how long the extras will take, you charge an extra $150 to paint, customize and deliver. The customer says it sounds a bit steep, will you take $100? Not wanting to lose a $300 sale, you say yes.
Remember, the old scenario had you spending two very reasonable hours of your evening plus one hour of getting materials to make $46 an hour.
This table ended up taking 4 hours to make because of the customization. It also meant an extra hour going to the store to pick up paint, which also cost $20 to purchase.
Managing The Unknown – How To Turn A Hobby Into Extra Income
And that painting, oh what a nightmare. You didn’t realize it would take two coats. And each coat took 2 hours to put on. And then to deliver that table, it took another two hours of your time as well between loading, unloading, and helping the customer take it to the back yard.
The end result? You went from only spending three hours of a single evening to make a total of $140 – to now spending a grand total of nearly 12 hours or the better part of a whole week of evenings making, painting and delivering a table.
Add in the $20 you spent on paint + and extra $20 in wood for the larger size, and the table now cost $100 to build. At a $300 sale price, you may think you earned a $200 profit instead of the usual $140.
Sounds okay on the surface. But you spent twelve hours doing the work. That means you paid yourself a grand total of $16.66 an hour. And you lost many evenings of quality time in the process. You could have spent that time enjoying it with family and friends. Or, building 6 regular picnic tables making a total of $840 profit!
Even worse, you are now wore out from the time you spent. You also have no desire to spend any more time this week doing what you normally love to do.
Keeping It Fun & Profitable – Turning A Hobby Into Extra Income
The moral of the story? Stick to what you do best and have fun doing! Don’t be afraid of losing a sale or missing an opportunity if it takes you out of your comfort zone.
And finally, know what you really make per hour on your hobby. Keep that number in your head at all times to know that in order to make something “extra” worth it – that number needs to stay the same or even go a bit higher.
Here is to making the most turning your hobby into extra income – without frustration! For more money managing tips, check out our Budget Tips section on the blog.
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