Freelancing

Growing your hobby website into a full-time business

For most people a hobby website is exactly that, a hobby. But sometimes an amazing thing happens and that website that you set up because you love doing it becomes a viable business.

I’ve worked with many small businesses over the past 6 years, most of them were set up with money and growth in mind from the beginning, but others have flourished from their humble garden shed or home office origins. With their insight, I’ve put together a list of 5 key elements that you should consider when making the decision to go pro and turn what you do for fun into a living.

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Business structure

As a hobbyist you’ve probably not thought much about how your business should be structured. Is this just something for you, something to do with a partner perhaps, or will you want to be selling shares?

In its simplest form a person could trade as a sole trader. All you’d have to do is tell HMRC and complete a self-assessment tax return detailing income and expenditure. Done, you’re a business! You’d personally be liable for the business’s debts, but for a small business it is a very easy way to get started.

Partnerships are similar to sole traders in that they are easy to set up and partners are liable for the business’s debts. The only real difference is that there are more than 1 people involved and therefore there is the need for a partnership agreement which is a contract between partners that sets out the rules.

Limited companies are another option. Unlike sole traders and partnerships, a limited company is owned by its shareholders and is an entity in itself. Therefore, short of a few exceptional circumstances, shareholders are not liable for the debts of the business. As a result there are lots of strict rules determining how a limited company should be run and how accounts are reported. To form a limited company you must registered one at Companies House, where you must also file annual returns and other documents as required by law.

There are other forms of company, such as public limited companies, companies limited by guarantee and co-operatives, but for a hobbyist-turn-pro, becoming a sole trader, partnership or forming a limited company are the most likely choices.

Branding, marketing and attracting new customers

As an online business getting your SEO and Social Media right is essential. Now that you’re running your website as a business and not as a hobby you need to be looking into offline marketing channels, unifying your brand message and seeking new customers whilst maintaining relationships with your existing customers.

The first thing to do is to determine who you’re targeting, what are your own brand values and how do you intend to communicate these values to those you are targeting. If you’ve been running your website as a hobby the chances are that you already know this, even if you haven’t given it much thought.

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What you may not have considered is consistency. It’s important that when developing your brand that the message consistently reflects your brand values, whether that be though the words you say, the actions you take or the imagery you use.

Once you are happy that you have defined what your brand stands for, start looking into offline advertising. Remember that word of mouth is extremely powerful so make sure you have a strong network, but then make sure that network is supported with printed media, personal letters, radio ads, personal visits, seminars or whatever else makes your target audience positively take note of who you are and what you are doing. It doesn’t matter what marketing methods you adopt, so long as they support what you are trying to achieve, which is most likely customer acquisition and customer retention.

Training and hiring staff

There will likely come a point when you don’t have the skills, expertise or time to do something. Knowing the human resources required to grow your business is essential so it is very important to be able to realise when it’s time to brush up with some training, outsource a particular job or hire someone.

Don’t be afraid to admit that you can’t do something. Instead, take it on the chin and go and seek help. Maybe it’s just a case of going online, searching support forums and asking questions. If it is something that is more involved, such as learning to use Photoshop from scratch, familiarising yourself with Sage or learning how to submit your company account then why not look to see if your local college has a course?

If there are no courses available, or you just don’t have the time, then you could consider hiring a freelancer or agency for a specific project. This is extremely common with website development, design work, accounting, marketing and pretty much every other business function you could possibly require.

If it looks like the support is going to be required on a long-term basis then it may be more cost effective to hire an employee. Beware that as an employer you have more legal responsibilities and you will have to pay employers’ national insurance. You may also lose the pool of expertise that you would otherwise have with an agency. That said, employing the right person could really help your business grow.

Accounts, bookkeeping and financial decisions

Keeping track of your accounts is very important. As a business you are obliged to report your income to HMRC. If you’re incorporated then these obligations are even stricter and you will also have to report to Companies House. However, keeping track of your accounts is also important for internal use, to set budgets and make sure the decisions you make are the right ones.

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You may well be able to do all this yourself in which case great! But you may have to outsource to a bookkeeper, accountant or even look at hiring a finance director if your business is growing well.

A bookkeeper is great if you’re still small and can’t manage your accounts on a day-to-day basis. You can then send the information to an accountant to compile the accounting reports, or simply use the information to fill in your self-assessment tax return depending on your situation.

An accountant is better placed to offer advice and will be able to format the accounting reports into their formal structure. This is essential if you’re a limited company as reporting in a specific way is a legal requirement.

Finance directors are usually only necessary when your company is really starting to grow. They are responsible for making resource allocation decisions based on available funds and information. While they are not essential early on, if you’re seeking external funding a qualified FD may be a requirement of you receiving the finds. Finance directors don’t usually come cheap, but an alternative could be to hire a part time FD, something that more common than you might imagine. That would give you access to the skills you need, but without the commitments of hiring a full-time FD.

Work with a mentor

Finally, many of the businesses I’ve worked with agree that having someone acting as a safety net, sharing contacts, offering advice, and experience is an invaluable resource. Finding the right person however can be difficult. Some mentors are happy to volunteer their time, others may require payment. Whichever route you choose, make sure that you find someone who knows your industry and shares your values.

Finding a mentor that challenges your ideas is a good thing because it will constantly make you think. What you don’t want is someone who disagrees with your values because there will be constant conflict. There are a number of places where you can find mentors, one of the most popular I’ve seen is MentorsMe.co.uk which is a gateway to mentoring organisations across Britain. It’s always good to get as much advice as possible; ultimately it is your choice whether you decide to act on it.

About the Author
Alex is a digital marketer and business consultant based in London, UK. He is also the founder of Hyperlink Media and works with a variety of SMEs helping them develop their online potential.