As is oft the case I have a theory.
Over the past 15 or 20 years I have met with literally dozens of people who have great business ideas, and very often those ideas are born from a passion for a hobby or interest that they want to monetise.
Whilst there are many good reasons to grow a hobby into a more sustainable income I've also seen the same pitfalls present themselves over and over again, and this is almost always due to a lack of understanding about purpose.
Before anyone starts a business I recommend that they really come to grips with the 'why' - because that matters even more than the 'what'. Why do you want to be self employed? Why do you want to sell this particular product or service? Why do you think there is room for this in the marketplace?
The answers are likely to be...because I love this thing...because I'm good at this thing...because I want the freedom of working for myself, and it won't feel like a job... Because I feel like I've got something great to offer. All of which are GREAT reasons to add to the PLUS side of the list.
In the for-purpose world (used be called charities, non-profits or community organisations) those values exist too, but the primary goal is to engage people, develop a community, create passion and purpose for the outcome - and whilst having enough money is important (non profit doesn't mean for-loss!) the driver is not income generation.
And so, for people starting a business from a hobby, there is an immediate confusion for their customers. This is particularly apparent in the arts and sports worlds. Where large groups of people come together to enjoy something (a play, an orchestra, a fitness class) they will generally be happy to pay a fee. They'll probably be happy to help set up, pack down, do the dishes, and all the other things that go with running a club. No organisation survives without ongoing, enthusiastic and high quality manpower. But when those same customers realise that the people running the organisation are doing it as a business, their enthusiasm for 'helping out' will quickly wane. The business owner might initially be viewed as wearing a technicolour dream coat that every one wants to touch - and the more charismatic you are as a business owner, the more attractive your service, the more likely this is. Eventually though, the hardworking 'volunteers' that your business (and it is your business) requires will move on to other things.
They may have the usual volunteer fatigue that goes with the for-purpose sector, or they may simply need to rationalise their time, but the most common reasons for this are firstly that they don't feel valued (because they're doing everything for free - and that includes your perceived generosity in offering 'free' classes, 'free' food and so forth), and secondly that they see the head of the business profiting from their hard work.
|People will only want to touch the coat so many times|
So what is the solution? The first is, as mentioned earlier, to understand your motivation, and to show integrity in this decision. If you're setting up your business to monetise a hobby, do the numbers. Can you actually make this work by paying people fairly? Can you cover all your costs from your income, even in the early days? Are you really a business, or is it a hobby? What are others doing?
Ask the big question - what is the mandate? - it a true purpose that could engage and motivate a community and is thus really a social enterprise (think of Eat My Lunch, Agoge and others). If it is, do the research, and then set the organisation up that way - be honest with your 'customers'. Invest in getting the structure right and the marketing, the business plan and the success will follow.
The main different between the two options is motivation. For purpose literally does exist for the purpose, for profit to make money. Both can exist beside each other as long as there is clear boundaries, strong structure and true understanding from all the stakeholders including the users of your service.
But whatever you do, don't think that you can go on forever, relying on the goodwill of others to give you an income. There's already more than enough for purpose organisations out there doing that, who will value their workers as true volunteers.