Starting a business can be a daunting task, especially if you’re unsure of the differences between a hobby, passion project, and a profitable enterprise. If you’re one of the many small business owners who has a passion project, it’s important to recognize that turning it into a thriving business will take a different set of skills and expectations than simply pursuing a hobby. In this blog post, we will help you understand the game of business and how you can take your passion project to the next level.
Profit First
The first step in understanding the game of business is recognizing that the main goal is to sell a product or service to someone for a profit. While a hobby or passion project may be created for the joy of creation and serving others, a business is focused on generating money for yourself. As such, it is important to ask yourself whether you want support or sales, and whether you are seeking investment to give the investor a return on investment.
Funding Your Business
Once you have established your goals, you may be wondering about how to get funds to create what you need to sell. There are several options available, including pre-selling, crowdfunding, and bootstrapping (using credit cards, savings, or working a full-time job). Each method has its own set of advantages and disadvantages, so it is important to research and select the option that best suits your needs.
Pricing
To make a profit, it is important to ensure that your pricing is right, meaning that it allows you to cover the cost of goods sold (COGS) and generate income. You should also carefully select who is on your team, whether they are freelancers or employees, and establish a separate bank account to manage cash flow.
Related: Setting Your Best Price. Here’s A Step by Step Guide.
Your Business is a Vehicle for Service
If you want to save the world and make it a better place and help others, then build a thriving business. Charge a premium for your work. Use that profit to help others.
Starting a business can be a fulfilling and rewarding venture, but it takes more than just passion and creativity to make it successful. Understanding the game of business means recognizing the difference between a hobby, passion project, and a profitable enterprise, and taking the necessary steps to make a profit. By considering your goals, funding options, team, pricing, and maintaining cash flow, you can take your passion project to the next level and turn it into a profitable enterprise.
Related posts:
5 Ways To Start Your Business With No Outside Funding
When Should You Stop Doing What You’re Doing?
