Hobby or Business?

During the last 48 hours — or, starting in the middle of the night two nights ago, I’ve been driven to reassess my business model…considering becoming a hobbyist who incidentally sells, rather than a microbusiness. I really am not sure about this, as it seems I can only earn $400 before I need to pay self-employment tax, and possibly need to register as a Business…but it’s a small step forward. It’s also a thought I hadn’t had before, which is reason enough to pay attention to it.

As well: I need to renew my Seller’s Permit, and if I do plan on becoming an official business, I’ll need to register with my City, get a P.O. Box, and follow the rules to obtain a DBA. That’s…not much, but it is progress. It depends entirely on what I intend to do with my project — and how much I am intending to recoup — which route I go down.

It also depends on how long I intend to stay in this area. There are actual plans on moving out of here — particularly because of the ongoing drought and newly lengthened and severe fire seasons. It may not be worth it to establish a business in this locality, if we’re going to move relatively soon.

What I realized last night is that I need to decide whether the beadwork is a business, or a hobby. If we move, I may need to make it a Small Business, at least in the short term. The thing is…what does that look like in five years? In 10? I know that my heart is in design, not manufacturing, and I wouldn’t consider myself a salesperson. There do seem to be ways I can tweak my Business model so that I’m doing what I love to do the most…the thing is, it requires hiring on extra help, doing quality control, supervision, and making sure that other people are happy (or at least satisfied) — and paid and otherwise compensated for their time and labor. If we’re going to also be putting out designs and want them to only be ours, that also requires time (and funds) spent protecting intellectual property — which at this point requires legal help.

I mean, it very much seems the reason why government gives so many incentives to small businesses, is that they want economic growth — meaning, that I need to envision what this could become if it weren’t just me and my family; if I did hire on other people to take down that potential 80-hour work week. I have, though, no direct experience in managing other people (which is why people hire Middle Managers, I guess).

This is…a very different vision than I had at first. At first, I was thinking it would be myself and my family, and I could purchase the raw materials, turn them into jewelry, and turn that around and gain a modest income from selling the finished jewelry. Creating a company — which may be what this becomes if I’m full-time and successful (never bet on failure) — sounds far different. The bare fact appears to be that being an entrepreneur is a job title within itself.

The question is, if I want that. It’s a lot of responsibility, especially if I remain a sole proprietor and don’t incorporate as an LLC (though the risk I bear is minimal, before other people and their livelihoods and responsibilities come into the picture — or until sales actually climb and the company becomes significant, at which point I’ll need legal counsel, if not legal protection). There’s also a lot of learning to be done on the way from hobbyist to one-person sole proprietor to someone with employees to incorporation. A lot. Though I shouldn’t forget, there would be a lot of working with other people and seeing what skills they can contribute that I don’t personally have.

Can I envision this? It’s hard to create what we can’t imagine (unless, that is, what we’re creating is failure: chaos is easy to generate without a guide).

I know I started this post writing about envisioning a future as a hobbyist who sells. That seems as though it’s probably going to be true of this year, at least: I’ve taken a lot of losses since deciding to do this for money (beginning last October), and have not yet recouped anything (although online visibility is moderately OK; this blog is one of the things I’ve been paying attention to). I’d also be doing this, even if I weren’t being paid for it. Those are two of the main markers of a hobbyist.

The thing is: if beadwork is my hobby, then maybe I should treat it as a hobby and focus on gaining a main mode of income (although I’ve sunk a lot of time and effort into making this work, and can’t say I’d prefer a different job: though what I’ve been doing…is learning a lot, both about myself and about the environment my situation is emplaced within). If it’s a business, that’s an entirely different thing. Up to this point, I’ve been treating it as a business — at least, a potential business.

I can operate this blog just fine, as a hobbyist — possibly even better than I could as a businessperson, because I wouldn’t have to think about which information I give out (say, sources for beads) could come back to bite me later.

But there’s something to be said about not giving away all one’s secrets. Even if I wanted to.

I suppose the thing to work on next is to fill in those missing sections of my Business Plan…

Published by Haruna

Haruna is a Librarian by training, currently pivoting from Public Services into Technical Services. Their undergraduate major was English -- Creative Writing, and they hold an additional small degree in Art (i.e. Visual Arts). They are now pondering whether a career in Academia is viable or desirable, given the current situation.

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