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Is Now the Time to Make Your Hobby Your Business? Last year amid the pandemic, I decided to buy a home in my childhood home town and turn it into a vacation rental as a side hustle. Former account manager Justin Jones launched his handmade jewelry company. Here's why you should think about making your hobby into a business now.

By Cheryl Snapp Conner Edited by Frances Dodds

Opinions expressed by Entrepreneur contributors are their own.

Luca Sage | Getty Images

As 2020 and 2021 have required workers from every variety of business to spend much more time at home, the U.S. is experiencing a resurgence of "side hustle" businesses. In fact, I'm planning to start another myself.

According to research, 23% of America's small businesses began as a personal hobby or passion that progressed into a full business concern. This was the case for Justin Jones, a former account manager now working full time on his wire wrap jewelry business, Worn Wizard ("Renaissance Man turned Artist"), from his home in Independence, MO. For Jones, the move to full-time business in 2020 wasn't spurred by the pandemic but became the right decision when he and his wife became parents of a second child, and she began a new internship on the path to a doctorate degree in psychology. The business is going well and in its first year has sold 300 individually created pendants so far from his storefront on Etsy.

In my case, following the death of my father this year I've made the decision to purchase an investment home in my childhood hometown of Eagle, ID. I can live in the home part time and conduct my primary business remotely while also having dedicated time with my mother, now widowed. When I'm not there, the home will become a vacation rental.

For many entrepreneurs, the side hustle trend seems delightful. It speaks to the concept of "design your business around doing the things that you love and you'll never do a day of work in your life."

This isn't entirely true, however, as progressing from hobby to business will involve complexities such as detailed accounting and reporting, spreadsheets to manage supply and demand, shipping, and marketing and sales to ensure your product doesn't die on the vine due to lack of exposure. If you're not prepared, the workload and new tasks required to become a full-fledged business could be more than you bargained for and could even sour your enjoyment in the original hobby itself.

Related: 50 Profitable Side Hustle Ideas

Is it a hobby or a business?

This is significant, in that the IRS will require you to pass not just one but nine tests to prove you are running a legitimate business, which you can read about here. If you fail these tests, you will face some negative tax implications.

In a nutshell, the difference between hobby and business boils down to how you treat your expenses and loss. If it's a business, all expenses and losses are tax deductible. But if it's a hobby, you can only deduct expenses up to the amount of income you gain, so examine the test questions with care.

What could you create as a potential side hustle business? Here are 21 ideas:

  1. Book binding
  2. Soap making
  3. Pottery
  4. Upcycled furniture from restored wood or vintage or recycled pieces
  5. Greeting cards
  6. Leatherwork
  7. Picture framing
  8. Screen printing
  9. Stained glass
  10. Bronzing (such as keepsake baby shoes)
  11. Calligraphy
  12. Candle making
  13. Dried flowers
  14. Glass blowing
  15. Quiltng
  16. Scrapbooking
  17. Sewing – either original designs, or outsourcing for businesses such as drapery makers, for a steady supply of consistent and repeatable work
  18. Woodworking
  19. Carpentry
  20. Ice sculpture

You can probably think of many more. There are multiple websites that can walk you through the process of setting up an LLC, getting start-up funding, setting up accounting and meeting licensing, insurance and other requirements.

Related: I Built My Multimillion-Dollar Side-Hustle While Working a Full-Time ...

How do side hustles start?

Now for a little more about Jones' business (and my own). Jones had been seriously pursuing various folk crafts as an avid interest since approximately 2012, with the end goal of someday having his own business based entirely on things he has made, either as a venture he could run alone or perhaps eventually turn into a family-run business he could run with his children.

After graduating from Harding University in Searcy, AR in 2007, Jones began his first career position in Harrison, AR. While there, he met an assortment of retired woodcarvers, knifemakers, blacksmiths, and other professional craftsmen. Inspired by their work, he fostered a dream that he could possibly work for himself as a craftsman one day.

He became involved in the Blacksmith Organization of Arkansas, eventually becoming its president. As a hobby, he stayed busy forging bottle openers and knives and created leather goods such as knife sheaths and leather flip flops.

His new and current business capitalizes on the growing interest in natural crystals and stones. As a wire wrap jewelry artist, he makes one-of-a-kind pendants from crystals and stones wrapped in copper and sterling silver wire.

In 2016, the family moved to a new town and he became a full-time stay at home dad to the couple's 15-month-old son and newly born daughter. The move also gave him time to think about what he would do both in his newly-found free time and as a game plan for the future when the children reach school age. Before relocating, Jones had amassed a steady stream of customers interested in his work. But what could he do as a niche and where should he focus?

"I knew that making this into a business wasn't impossible, but it certainly wasn't obvious," he said.

In that year, he received an email from the casting director of the History Channel's "Forged In Fire," a show where knifemakers from around the country compete against each other with time limits and blade testing to become the FIF Champion. It felt like a good chance to get some exposure, test himself, and maybe win some prize money. He was also a little stir crazy to take his hobbyist nature further, he recalls, so he took the opportunity and finished as the runner up on his episode of the show.

As part of the show, he was required to make a video of himself forging a blade. So, he started a YouTube channel. It was a fortuitous step as long after the show was over, he continued to make videos as he journaled craft-related goals for his growing YouTube audience.

In the summer of 2019, the next project was to make a wire wrapped pendant. After a little research and experimenting, he made several. The people following his work showed high interest. Could he do this full time? Perhaps it could be the "thing" he'd hoped to stumble into. His metal working skills seemed to align well with the craft. Most importantly, he enjoys the work, and is happy to pour his creative energy this way.

Marketing is essential

As the business grows, Jones continues to operate entirely online through Facebook, Instagram, Etsy, and the YouTube channel. In the future, he hopes to add live shows to the mix and hopes that having started a business in the midst of difficult times will continue to pay off in the long term.

Ideas are everywhere

In my own case, my inspiration arose from a chat with a fellow participant in the Board of Advisors mastermind group I attend. He owns a holding firm for luxury vacation properties, and I asked him how his business had gone during the pandemic. He said the majority of vacation rental income stopped on a dime in the middle of March 2020, as it did for many businesses. But by June, to his delight and surprise, it roared back with a vengeance: It turns out that families have continued to vacation but have preferred higher-end luxury rentals (his specialty) as a way to enjoy family vacation time while also staying safely sheltered in place. (Lower end rentals, geared toward business and utilitarian travel, however, have continued to diminish along with the hospitality industry in 2020 and 2021.)

Silver linings amid the dismay

Who'd have thought? The idea took hold as I realized I could potentially build an investment home that would allow me to be with out of state family while also generating revenue during the times I'm not there. It would also help diversify my retirement savings from the standard annuities and 401K. Voila – my own side hustle was born.

These are a few of many silver linings during times of cultural and industry shift. Regardless of the economic and cultural shifts that surround us, the world of entrepreneurial skills forges on.

Related: 9 Reasons to Start an Online Side Hustle in 2020

Cheryl Snapp Conner

CEO of SnappConner PR

Cheryl Snapp Conner is founder and CEO of SnappConner PR and creator of Content University™. She is a speaker, author and national columnist and a specialist in public-relations strategy, crisis communications, thought leadership, entrepreneurship and business communications.

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