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Can a Hobby Become a Business?

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IanJ:
Hobby--->---Business

Yes, I've done just that. I started out wanting to build and adjustable voltage reference for myself and throughout prototyping I realised I could make it a commercial product.
I did the sums, watched Dave's old video on pricing your product......did more sums, looked at supplier costs, did more sums and then decided I could afford out of my own pocket to "try" a batch.
I have never looked back............

I'm in the UK.

- Keep your day job until you have been through a few cycles of building batches and selling. From that you'll get feedback as to it's validity in the market.
- Depending on your own financial circumstances you may want to keep the day job and have it an evening/weekend business. Beats the hell out of vegetating infront of the Tv.
- Supplier costs, Tax, incidentals, packaging etc etc will all add up and quite significantly so, so keep doing the sums. An Excel spreadsheet with formulae you can continually add/tweak is a good idea.
- Get a proper courier account, it will save you loads, especially international.
- Speak to an accountant and/or research tax implications.
- CE/UKCA/UL etc.......thats another ball game!
- Steer away from mains AC stuff unless you KNOW what you are doing.....if somebody gets hurt you may be liable.
- Get liability insurance.
- Do more sums.
- Don't cut corners.
- Try not to outsource everything. I.E. build your own website, don't pay companies to do it.

If you don't find it fun then it won't last.......so have fun!

Ian.

Georgy.Moshkin:

--- Quote from: IanJ on May 19, 2023, 12:16:29 pm ---- Supplier costs, Tax, incidentals, packaging etc etc will all add up and quite significantly so, so keep doing the sums. An Excel spreadsheet with formulae you can continually add/tweak is a good idea.

--- End quote ---
A very good advice! I use SpeqMath to calculate BOM, manufacturing price, and doing sums using formulas, e.g. "price1=sp213+hlk0505a+(stm32f030+adum1201)*0+1*el6n137s+stm32f030", where multiplying by zero is to remove certain function. I always round up use higher component prices in these formulas. Also, I use "NEEDVIEWS=SOLD*100/CONVERSION" formula with a conversion rate from 0.1% (1 unit sold per 1000 views/clicks/etc.), and have "SOLD" variable calculated before based on other goals. Using IanJ's advice you can filter out ideas just by looking at your spreadsheets.
Do not forget your hobby ideas. I have a ZimWiki database where I store all my ideas and screenshots:
- screenshots of product negative reviews on Amazon, YouTube, Kickstarter, Indiegogo, tindie, sparkfun, adafruit, arduino websites, etc.. Helps to understand the problem need to be solved (I've learned one either need to make a product cheaper or with performance level difficult to achieve by competitors)
- screenshots from keyword research prices. I subscribed to Mangools for a short amount of time and exported all the data to keywords I was interested in (search volume, search trends - some topics become obsolete in next few years, similar keywords, etc..). There are free research tools as well.
- at some point stop researching and focus on a product itself. I recommend everyone to find "How Games Can 100x You and Break Reality" video, it is very short and resonates strongly with hobby to business transition. Without making first moves your brain do not have enough information to make next decision. It's like a mechanical clock, you can't put clock arrows in right position without gears moving, so you need to start your "brain gears" moving by starting doing something about your hobby to business transition. By constantly reviewing your ideas and performing calculations you may find some topic you are good at, which matches with your hobby preferences.  I have abandoned few projects, have some unused parts and samples worth 2k USD, but it was worth it. I finally found some topics worth focusing on, hope you can do it too.

tkamiya:
Yes.  I've done it few times.

In early days of my life, electronics were my hobby.  I built radios and what not.  Later in my life, I started Ham Radio.  Then I worked for a Ham Radio store, and later, got a job at a custom electronics company.  I enjoyed it at first, then I realized I lost my hobby.

In mid part of teens, I got interested in computers.  Took many many computer languages courses, and did plenty of self-study.  10 years later, I got a job as a software support person, then a developer.  I enjoyed it at first, then I realized I lost my hobby.

At early part of Covid-19, I was laied off from above mentioned job.  Got another support job.  I couldn't do it.  Then tried electronics repair job.  My medical condition got in the way.  Also, I lost joy in my life, which has always been my hobbies.

So, my answer is, yes, they can be done and they were quite profitable.  But did it increase quality of my life?  I'm still looking for an answer for that.  All I can say right now is, approach with caution.  Have a long term vision.  I cut out unrelavant portion of my job history and left out just enough to make my point.

nigelwright7557:
A hobby can turn into a profitable or none profitable business.
The trick is to find something that isnt being sold for peanuts but has a good profit margin.

I used to sell audio modules on ebay but competition killed it.
You can now buy fully finished modules for less than I can buy the components.

I wrote and sold pcb design software for a while but free software killed that and others selling it at a couple of pounds.

I now sell hardware/software systems at a small profit as a business seller on ebay.
Its fun so long as I dont get too much work as then it becomes a chore.

Georgy.Moshkin:

--- Quote from: nigelwright7557 on May 25, 2023, 09:10:12 pm ---The trick is to find something that isnt being sold for peanuts but has a good profit margin.

--- End quote ---
And high entry barriers. Something that ordinary engineer can't easily reproduce. Something that big company would avoid, because man-hours will not pay off. You must have an advantage. I personally give special attention to the engineering topics that have no good affordable solution for a decade or more: you already have all user feedback, know what people dreams are, know what people looking for, have search history dynamics over time all the required information to predict sales, marketing, perform feasibility tests.


--- Quote from: nigelwright7557 on May 25, 2023, 09:10:12 pm ---I wrote and sold pcb design software for a while but free software killed that and others selling it at a couple of pounds.

--- End quote ---
That is why I think the best solution is to create a personal brand. Imagine if Dave of EEvblog created each video without appearing himself in the picture, uploading each video on a different channel. It would dissolve in the ocean of information. You need to prepare a sticker that people can put in their brain. There are great videos and there are videos that are "less great", but only when put together it creates a trusted, well recognized personal brand. Imagine Tesla, SpaceX, Boring Company and Elon Musk separately.  Mutual simultaneous amplification of different topics with a single "Elon Musk sticker" in our heads. If someone recognizes you, remembers your great product, most likely they will put significant attention to yours even if it costs more.

I think that simple idea explained in "How Games Can 100x You and Break Reality" video may be applied for this hobby to business transitions. First moves and goals, the earlier your start the better.

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