By Carla Hindman
Money and Finance Columnist
You can break personal finance into three broad categories: income, expenses and savings. Your personal cash flow statement lists your income and expenses and a common goal is to end each month with a positive balance – with money left over to put into savings.
We often tend to focus on how to make the most with what we have, but don’t forget the third category. With planning, dedication and an understanding of how your skill set could benefit clients, you could make the transition to a more entrepreneurial role and increase your income.
A friend recently shared her experience. She started working out while looking for a way to release stress. Soon, exercise became her hobby, and then her passion. Several years later, she got the necessary training and certifications to go into business for herself as a fitness instructor and personal trainer.
Others have similar experiences. A photography or coding course sparks intrigue, which leads to exploration as a hobbyist and an eventual career or part-time income source. Later in life you may decide it’s time for something different and start by exploring your interests and then setting off on an entirely new path.
Acknowledge that you may be giving yourself a new job. First, consider whether you really want to turn something you enjoy into a financial pursuit. Some people find that the transition can “ruin” their hobby in a way – it could feel like a chore or job rather than an enjoyable outlet. As long as it doesn’t require a substantial upfront financial investment, testing the water before diving in fully could be a good idea.
With the proper clearance, you can stay at your current role and start a small side business or offer your services as a freelancer to see what the experience will be like (and how much money you can make). You might find that a profitable, or cost-covering, hobby is enough.
Identify ways to make your offering uniquely yours. No matter how hard you try, you can’t will money into existence. It will take a lot of work to make a business succeed and even with a driven entrepreneur at the helm, many businesses don’t make it past the first several years.
But whether you’re creating and selling a physical product or offering a service, you bring a unique set of skills and experiences to the table. Try to figure out how these can distinguish your offerings or add a unique twist that will help potential customers meet their goals.
Businesses succeed for a variety of reasons. They might create something entirely new, figure out how to make something less expensive or more luxurious, put their efforts into customer support or figure out a fun and creative way to advertise their product.
Figure out who your target customers are and what they like. If you’re going to make money you’ll want to identify a target market. Generally, this will be a group of people who want and can afford your offering. Both qualifiers are equally important.
Be brutally honest with yourself. There isn’t always a profitable market, and some hobbies don’t make great businesses.
Working within a proven market – selling something that people already buy – can be a good thing because you know there’s at least some demand. From there, you can figure out the best way to find customers that like the twist or extra touch you’ve put in.
Drawing on my friend’s experience, she has discovered several ways to attract her clients. Some people already have an active lifestyle and don’t necessarily need motivation. For them, she emphasizes her knowledge of fitness and health. She can craft a meal plan that aligns with their physical goals and work with them to improve their form and help prevent injuries.
With clients who are struggling to get started, she emphasizes the value of having an accountability partner. She takes the planning and worry out of working out; they just need to show up.
Are you ready to take action? Managing spending and saving are essential elements of any financial life. With some thought and planning you could grow another essential element – your income – while doing something about which you are passionate.
Carla Hindman is the Director of Financial Education at Visa Canada.