Hobbypreneurs Turn Passion Into Profits

Intuit, the maker of Quicken, QuickBooks, Turbo-Tax and a host of other small business software tools that make operating a business easier recently commissioned a study of “hobbypreneurs” and their habits. Intuit’s research led them to the strong conclusion that people passionate about their hobbies often lead them to start small businesses. Often these businesses employ only the owner, but in other cases, companies growing out of hobbies can grow very large.

 

U.S. Small Business Administration Office of Advocacy statistics bear Intuit’s study out estimating that there were 15.4 million self employed persons operating in the U.S. at the end of 2008. Further, it estimates that of the 27.2 million businesses nationwide, approximately 78.5% of those were non-employers. The term “non-employer” refers to a business that has no employees or payrolls. Hobbypreneurs are often found in all three categories of businesses (self-employed, employers, and non-employers).

 

Intuit concluded that the hobbypreneur trend will continue to grow as a result of many factors including the use of the Internet and social networking, a growing trend toward baby boomers turning to small businesses based on their hobbies and passions and a growing interest in unusual products and services.

 

Here are a few real stories of hobbypreneurs that turned their passion into profit.

 

BlogFrog is an example of a company that started out as a hobby. As a lifelong technology developer, Rusty developed a home-made tool to help his wife and her friends form "communities" with each other and bloggers with similar interests (such as children with food allergies). The site became popular very quickly and the long-time technology developer left his full time job in the middle of 2008 to run BlogFrog full-time. Now with over 22,000 members, BlogFrog believes it is the largest social networking and blog site in the world.

 

Tom Irvine was taking care of his grandkids one day and decided he would invent something that would make a difference in their lives. He recognized that while compact florescent lighting (CFL) was more energy efficient, it contained a highly dangerous element, mercury. Mercury is especially dangerous to children. Irvine invented a lightbulb (now called ArmorLite) that uses no liquid mercury and uses all safe components. As an additional element of safety, Irvine designed a method of encasing the glass light bulb inside a silicon shell. A company, Clear-Lite Holdings, Inc. was started, and distribution through national and online retailers has keep Irvine busy ever since.

 

John Porten created Graphite, a fitness and weight loss website with an enormous database of foods that are easy to look up in order to help him with weight loss and fitness goals. He had tried numerous software packages and websites and found many didn’t offer both a good fitness database for calories burned and a nutritional database. Now, Porten is slimmer and fit and has built a large following of users who pay him $5.00 per month to use his website. The key to success for Porten was keeping everything simple yet usable for no-nonsense dieters.

 

Perhaps the most fun hobbypreneur is Matthew Snow, founder of Ex-Boyfriend.com. Snow, started Ex-Boyfriend.com while an art student predominantly as way to market his illustrations and his then-girlfriend's/now-wife's handicrafts. According to Snow, “It was very much in the realm of ‘hobby’, but since graduation it has grown into a (modestly) thriving small business that has taken over our lives in the best way possible.”

 

The common link between all these hobbypreneurs is passion. Every one of them is passionate about what they are doing and many are building strong businesses. In their own way, each of them is contributing to the their local economy, paying taxes and employing others. The next time I look for a service, gift, or other product, I am going to make it a point to see if I can find what I am looking for from a hobbypreneur.

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Sam Thacker is a partner in Austin Texas based Business Finance Solutions.

You may contact Sam directly at: sam@lesliethacker.com

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EXTRA: If you have questions for Sam regarding business financing, the credit market, and similar issues, please send an e-mail. Your questions will be recorded and Sam will answer the best ones in his Ask the Expert podcast show.