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When is your hobby not a hobby, but a business?

The Knirepreneurs

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.

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