So you’ve got a hobby – something you’re interested in, you choose to do and you’re (probably) pretty good at, right? But how do you make the move from weekend hobby to actual moneymaking business and start to reap the profits of your hard work?
Well, whether you’re an entrepreneurial spirit just starting out or you’re a career veteran headed for retirement, now is the time to indulge your interests and turn your hobby/passion into real moneymakers. And what’s more, the technologies at your disposal to make your dream business venture a reality are getting more innovative and efficient every day.
But, first things first, you’ll need to understand the difference between a hobby and a business for tax, insurance and legal purposes.
What distinguishes a business from a hobby?
As you might’ve guessed, a hobby is defined as a leisure activity conducted in your spare time simply for recreational purposes.
Should you decide to turn your hobby into a business, you’ll need to establish your status as early as possible as it will impact your tax and deductions. And, as with all things ATO-related, failing to declare your business activities and income could lead to a world of tax time pain in the future.
Where to start?
So where do you begin if you decide to go down the business path? You’ll need to firstly apply for an Australian Business Number (ABN). You might also need additional licenses and permits specific to your business type. For example, if you’re running a home-based business, you might need council approval depending on your business type. You can find more on that with the ATO here.
Inspiration to make the move…
So in the spirit of turning your hobby into a successful business, we’d like to introduce you to Amanda Schenk. Amanda runs a small (but seriously cool) cake and catering business called Sugar Plum Cakes and Desserts. After finding herself dissatisfied with the offerings in her local community – and with a serious knack for making pretty delicious sweets – Amanda decided to turn her hobby into the successful business it is today.
For Amanda, being successful meant having the time to do exactly what she loved. But, just like Amanda, many small business owners find themselves struggling to claw back that time amongst doing all the other tasks it takes to run a small business. We’ve found that often, small business owners – and you might know the feeling – wish they’d organised their finances/books sooner. Why? You’d be amazed at how much time cloud accounting can save you in the long run (and that includes the hassle avoided come EOFY as you rest assured knowing your books have remained ATO compliant along the way!)
So how does cloud accounting = success?
If you’re new to business, accounting can be overwhelming. But, whether you love it or not, every business (no matter how big or small) needs to keep track of its accounts – and cloud accounting packages, such as MYOB (Amanda’s preferred accounting solution, which grows as your business grows) make that simple.
So if you decide the MYOB Essentials solution is right for you, you can start on a payroll-for-one package and as your needs grow, your package can too. Of course, you know your business better than anyone – and that’s the way it should be – and that’s why it’s important to choose an accounting package that will cater for your business at any size.
And the real benefits for small business owners?
Online accounting solutions can help small business owners like you keep control of your finances, be more productive, reduce risks (because you actually know where your business is at) and allow you to actually enjoy your business just as you did when you called it a hobby.
According to Amanda, above all else, entrepreneurs want freedom. If you began a hobby as a means of therapeutic escape, or a way to express your creativity or perhaps it was simply to indulge a passion, you shouldn’t have to let that go as you change the title from ‘hobby’ to ‘business’. Using cloud accounting packages allows you to stay connected to the things that are most important to you in business and in life, without the complicated processes behind the scenes.
Imaging not having to carry all your vital business information in your head, but still having access to it at the click of a button, even when you’re out of the office! That’s access to real time information on who has paid (and who might need a little reminder) and so much more on your dashboard. And then there’s the increases in time/productivity that result from better utilising your resources (like your valuable time and money) on the things that matter most to you. Be it growing your business, spending more time with customers, or working on new recipes – all of which are likely to grow your future revenues!
Or it might even be spending more time on something of a more personal nature to take back a bit of that life balance you were after when you first started your business! Whatever the case may be, having all your information (and remember for small business, information is power) available anywhere, any time allows you that freedom!
If you’re just getting into business and you’d like to experience easy accounting software, you can try MYOB free for 30 days. Of course, if you’d like to know more about cloud technology or using Shoeboxed Australia to help you ditch the data entry so you can focus on the things that really matter, you can give us a call on 1300 00 1333 (AU) or 0508 00 1333 (NZ) or drop us a note.