The craft and hobby segment of the retail sector has increased to a $27 billion dollar industry while other retail sectors have declined. Hobbyist and crafters will discover how easy it is to turn a hobby into a profitable business through the sale of hobby materials, craft making designs and craft kits. As a small home business, hobbyist can take business tax deductions and help finance their hobbies.
Write a business plan for the business and obtain business financing. A business plan helps determine the hobby’s customer demographic. Writing a business plan also help to identify where to purchase inventory, what prices the business will charge to make a profit and any other start-up costs. If the business needs money to start it even helps when applying for a business loan. The U.S. Small Business Administration offers free on-line help, personal mentors, and business courses to help small business owners get started through their SBA Answer Desk at 1-800-827-5722.
IRS publications Publication 535 Business Expenses and Publication 587 Business Use of Your Home will show you all the business deductions that you can claim as a small home business and provide advice on record keeping.
Register the hobby business and buy business insurance. All businesses must register within their state as a business. The business plan writing process helps small business owners define all required business regulations in their community. For home businesses, check for additional licensing or zoning laws at county and city level.
Some cities require hobby business at home to register or have zoning laws that prohibit warehousing large amounts of inventory. Since a hobby business sells a physical product, small business owners will need to purchase business insurance to protect their assets from liabilities. Check with your homeowner’s insurance agents for advice.
Build a website e-commerce site to sell your products. A business website establishes a business’ presence. Websites show off craft ideas, supply inventories and offer sales on a global stage. Hire a web designer or purchase a website template to build a website. Many web-hosting companies offer support and design services to help.
Find craft wholesale dropship companies for the best prices on craft goods. Small hobby businesses must watch craft trends to determine what to purchase. Fortunately, all craft and hobby magazine subscriptions and purchase can be tax deductible if used for the business.
Designate some home office space and open for business. A small home business requires designated area in the home for tax purposes. The best place to start a business is where the craft area is currently. A craft business also needs a phone line to take orders, an email address and other business supplies to operate. Google voice is free and creates an excellent home business phone line. Open for business when the home office is set up with all its required permits and registrations