Sorry it's taken me longer than a week for the next post in my "weekly" series. I had several draft posts ready, but in all honesty, it was very hard for me to follow up the last post with something equally inspiring. "Learning to Love Multiples?" Useful, yes, but eh, maybe for another day. I'm not promising that this one will be, but I will try!
The question I want to tackle this week is: How do you know when you're ready to start a business?
There are two steps involved (although they can be taken at the same time): there's going from idea to reality, and then going from hobby to business.
Going from idea to reality was not that difficult for me: I decided, on a whim, to start listing my newly made greeting cards on Etsy about a month after I'd started making them. However, going from hobby to business was a completely different horse of a completely different color.
For me, it was easy to start selling my cards online, at craft fairs, and at stores. But it was much harder to make the transition to a business. Something in my brain just shut down whenever I heard people telling me the steps I should take to register my business with the State of New York, or whenever I thought of how much it cost me to make each card, or whenever I thought about all those pricing formulas. And based on my background, I'm supposed to be a logical person: I'm a lawyer, as well as a former scientist (well, my bachelor's degree is in molecular & cell biology at least). I took corporations in law school. I know that sole proprietorships and partnerships are personally liable for business expenses, and that filing as an S-corporation will prevent double taxation. But I couldn't apply it to my hobby/quasi-business.
Looking back, this paralysis was caused by conflicting priorities and lack of time, which led to me not feeling ready to turn Chelleline Cards into a business. In fall 2010, I began to feel like I wanted to take steps to turn it into something viable, something full-time, and I got advice from a friend, which I took, but still, I felt impeded by my law school duties. It wasn't until fall of this year when I began thinking about it again. I'd been on three interviews, and had been passed over for all three jobs. I started to worry. What if next fall rolled around and I still couldn't find a job as a lawyer? I decided that I would take a two-prong approach to the job search: I'd spend the next year continuing to look for a job as an attorney, while simultaneously expanding the business, so that if plan A didn't work out, I wouldn't be up the creek. Also, Chelleline Cards was more in tune with my soul, anyway.
Well, if I was going to expand my business, what steps did I need to take? Registering as a business, obviously, but my thinking was not that linear. (Keep in mind that I was working two part-time jobs at this point, as well as working on Chelleline Cards on top of that.) My first thought: I needed more customers. In this line of work, your customers are your stores and individuals (from craft fairs, online stores, etc.). The best way of getting more store customers was to participate in a trade show. But to be in a trade show, I knew that I had to register my business.
And so that's what I did. When one of my part-time jobs ended at Christmas, and I finally had some time to breathe, I looked into filing as a sole proprietorship in North Carolina, and by the end of January, my business had been registered! No more bouts of paralysis, no more spacing out of the mind. I'd now made the leap from hobby to business.
And so the question you're probably asking now is, How do you make the transition from hobby to business? How do you know when you're ready? You can read all the advice out there about what you need to do to turn a hobby into a business, but the truth is, while the advice is good, it is only helpful when you are ready. And only you will know when you're ready. You may know the minute you decide to start selling what you make. Or, like me, you may dally in limbo for several years before circumstances push you into it. But when you know, you'll know.
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