We took an unscheduled break from The Knitrepreneurs last week, only to return with the meatiest of questions: When is your hobby not a hobby, but a business?
There’s a word that hangs around like a bad smell in our community: “just”. It’s a sneaky prefix that, unchecked, has nasty consequences. Have you caught yourself doing this: “I’m just a knitter” or “I’m just a crocheter”; “I just do craft markets”; “I just dye up yarn and sell it as a hobby”. I got news for you: if you do it with the intention to make money, you are running a business and not “just” a hobby.
Why is it dangerous to hide behind the term ‘hobby’?
When it’s a hobby you might do one or more of these things:
- you don’t feel the need to abide by professional standards
- you’re not bothered about intellectual property
- you don’t have to keep financial records
- you don’t keep track of cashflow and how much you are actually spending
- you don’t have goals/ plans/strategies
- you don’t ask questions like “what are the payment terms and are they fair for the time/effort/materials?”
- you don’t worry about visibility on social media
- you’re not interested whether people like and will purchase your product/s
- you don’t think about what you make as a product
- you don’t have insurance because who would sue you if they tripped at your market stand? You’re just a hobbyist!
The dangers of running your business as a hobby could be the simple annoyance that you now have ten crochet Cinderella dolls filling your spare room. But it could also mean legal or financial troubles or a terrible rift in a friendship because you didn’t abide by terms and conditions or you didn’t bother to clearly outline them in the first place.
Have a listen to what Jess (Yarn Trail Victoria) and I have to say about this issue in our latest episode of The Knitrepreneurs.