There are two things you’re probably going to need when you retire – something to do with all that spare time and a little extra income to keep you afloat on a fixed income. It’s possible to kill both those birds with the same stone with a little thought, planning and some hobbies that make money.
Finding Hobbies That Make Money and Make You Happy
There first thing you need to do is figure out what sorts of things you like to do. If you’re going to use profitable hobbies to make a little money on the side, it might as well be ones you enjoy. A leisure interest inventory can help. Here are two inventories to help you identify what sorts of leisure interests your have that might be turned to a profit-making venture.
Planning a lucrative leisure:
Once you’ve identified what sorts of things you have an interest in, it’s time to start assessing their profitability. Follow these steps with each of your high interest leisure activities:
1. Identify first which hobbies or leisure activities you already have skills or training for or for which you can get classroom or home-based training. Leisure activities and hobbies that require higher levels of skill are more likely to have specialized equipment you can make or buy and sell or classes you can teach to help others acquire those skills. Your local community college can provide training you need to dust up your mad skills!
2. List each potential money-making hobby or avocation on a sheet of paper. Think about things you can make, collect and resell or skills you can teach. If you are an experienced canoer, you might get certified and charge to teach lessons, you could operate a small canoe rental livery out of your backyard, make custom paddles in your shop or sell gear on the weekends at flea markets. You could do repairs in your garage. You could build beautiful custom boats. Choose potentially profitable hobbies that have long lists of things you can make or services you can sell related to the activity..
3. Below each item, write out a list of the things that people who participate in this hobby need to buy, need to learn or want to make. List every possible service or item you might turn a profit on. If you’re interested in banjos, for instance, you could make custom banjos, learn to do banjo repairs, set up banjos or collect and restore old banjos. You could give banjo lessons, write a banjo instruction book or make banjo instruction videos and sell them on line. You could make banjo accessories or resell strings. One guy I know cryogenically treats banjo strings and turns around and sells them at premium prices. Make your list exhaustive.
4. Next, go through the list and select the most likely hobbies that make money or activities for which you could produce something that yields income. The very process of listing ideas will help make selecting profitable hobbies much easier.
5. Finally, develop a business plan for your venture. Visit the Small Business Administration. They will provide you free advice on creating a business plan. Connect you with mentors and even help you find funding to get started.
a. Identify the types of goods you will create or the services you may render. Identify where you will get you materials to make your product or find the product you will resell.
b. Lay out how you’re going to obtain or generate your product. Draw flow charts and make Venn diagrams to map out your production or service delivery process.
c. Decide where you’re going to sell your product. You might get a temporary or permanent booth at a flea market or outlet mall. You might also set up an on-line storefront.
d. Decide what you’re going to charge for your product. Make sure you charge enough to cover your costs and give yourself a fair profit on the deal. Figuring a unit price by adding the cost of materials to a fair return on your time, travel and overhead costs per unit and about 8% to cover the extra self-employment taxes you’ll have to pay.
e. Set up legally. You might have to file a DBA with the County Clerk or tax assessor and set up to pay sales taxes if required to collect them.
f. Determine who might be your target market for your product. Develop a marketing and advertising plan.
g. Get a CPA or bookkeeping service if you don’t have that expertise yourself. It’s much better if you make sure and keep all your financial ducks in a row right from the start.
Whether you’re making something in your shop and selling it at flea markets or you are selling your expertise, put as much thought into setting up your retirement sideline as you would have with any full time business you set up. If you’re making kilts and selling them at Celtic fairs and music festivals, you’ll still have booth rental fees, costs of materials, advertising and your food and lodging. Figure all that in when you’re setting prices.
Good startup planning can make the difference between profitable hobbies that provide steady retirement income and those that costs you more than you make.