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Turn Your Hobby Into a Business
Entrepreneurs who transformed their hobbies into multimillion-dollar companies.

by Jane Porter  
   
   

 
  A jeweler at work - photo by Jon Law

 
Kim Lavine started making microwavable pillows as gifts for her kids' teachers in 2001, assembling them at her kitchen table in Grand Haven, Mich., using a corn kernel filling. Around the same time, her husband lost his job, prompting her to consider turning her pastime into a source of income. She went from selling pillows out of her truck to setting up mall kiosks and incorporating her company, Green Daisy, in 2002. Within two years, Lavine's Wuvit pillow was in national chains, including Saks Fifth Avenue, Macy's and Bed Bath & Beyond, and by 2006, it generated more than $1 million in sales. Lavine then branched out into a pajama line, and after moving to a licensing model, a home decor line as well. In 2008, she put the retail business on hold and started a media company with plans to eventually relaunch the Green Daisy brand again. Lavine wrote about her success in Mommy Millionaire: How I Turned My Kitchen Table Idea into a Million Dollars and How You Can, Too! (St. Martins, 2007). To determine whether your hobby can become a business, she says, first ask: "Do you have a great product and can you demonstrate and prove its marketability?" That may sound elemental, but Lavine says too many entrepreneurs fail to consider that question.

Here are three other entrepreneurs who transformed their hobbies into multimillion-dollar companies.

Terry Finley
Hobby: Horse racing aficionado
Business: West Point Thoroughbreds
2011 Revenue: $6.5 million

When Terry Finley bought his first horse, Sunbelt, for $5,000 in 1991, he felt stuck in his job selling life insurance. Finley had been betting on horses for years, but had never made an investment like this. After Sunbelt won his first race that year, Finley started running small ads in racing papers and attracted an investor who paid $5,000 for partial ownership of Sunbelt. Within two months, he bought his second horse, Cal's Zen Jr., and continued buying more horses on credit cards. Soon after, he quit his job and founded West Point Thoroughbreds, a Saratoga Springs, N.Y.-based race horse syndication management company. From the outset, Finley talked with clients who ran their own companies and asked for suggestions about growing a business. "We started trying to build a brand and a reputation," Finley says. Through this informal advice, he learned the importance of tracking metrics. In 2004, he hired a web designer to revamp his website. Today, West Point Thoroughbreds owns 55 syndicated horses and has 550 investors who profit when their horses win a race, are bred or get sold. Revenue has grown from $2 million in 2005 to $6.5 million annually over the past three years.

Craig Jenkins-Sutton
Hobby: Gardening
Business: Topiarius
2011 Revenue: $1.2 million

When Craig Jenkins-Sutton started designing gardens he had no formal landscaping training, just a lifelong green thumb. Growing up on a farm in central Minnesota, he always had a love for gardening. He ended up working for a landscape service but knew he didn't want to work for someone else. In 2003, he put a small ad in the Chicago Tribune, offering his garden design services. Within a week, he received 40 calls but only one turned into a customer. It was enough to get the business going. That year he founded garden design company, Topiarius, in Chicago. Jenkins-Sutton learned how to market his business mainly by trial and error. "The tough part in landscaping is that it's something a lot of people think they can do themselves," he says. "What value do we bring? Being able to demonstrate that is really important." In 2010, he started putting door hanger ads at people's homes and realized he was onto something. Ten thousand door hangers produced five to 10 customer calls, much better results than any other promotion he'd tried. As a result, his business doubled in 2010, and revenue rose last year by 80 percent to $1.2 million.

Megan Duckett
Hobby: Sewing
Businesses:Sew What? & Rent What?
2011 Revenue: $6.2 million

When Megan Duckett moved to Los Angeles from Australia 21 years ago, she was 19 years old and had big dreams of working in the entertainment industry. She took a job with an event planner and in her free time began sewing at her kitchen table, making bedding, drapes and costumes. When the request to make the linings inside 10 decorative coffins for her employer's Halloween event came up, Duckett took on the challenge. "That was one of the turning point moments when I began to realize I have a skill set that other people didn't have," she says. Duckett also knew that positioning herself as a specialist in designing props and entertainment decor would set her apart. Her next big project, designing 25 silk chandeliers for The Mirage in Las Vegas, came a year later. By 1996, Duckett was earning more money sewing than the $45,000 salary from her full-time job at the event-planning company. She quit and rented an 800-square-foot warehouse, hired three seamstresses and generated $80,000 in revenue her first year. In 2006, she began producing bags and other items bearing the company logo to make the Sew What? brand more recognizable. "[I realized] that people weren't buying me; they wanted to buy a brand," she says. Four years ago, Duckett branched out by offering the option to rent drapes and other props rather than purchase them and by 2011 her Los Angeles-based company, produced sales of $5 million in addition to the $1.2 million her second business Rent What? generated. Today she manages 44 employees across both businesses.


5 Tips For Transforming You Hobby Into a Business From 'The Toy Hunter'

"Do what you love and the money will follow." Entrepreneurs have heard this advice countless times through the years. What's wrong with it? Most people who try to turn their leisure pastimes into a business fail at it miserably. They end up with a big, expensive hobby, not a successful small business.

Then there are the lucky few, who successfully combine their passion with business smarts and create an income that revolves around something they love.What makes the difference? A great example of how to run a hobby-based business is on Travel Channel's new show, Toy Hunter. The show follows toy dealer Jordan Hembrough as he combs through toy-collectors' attics, garages, storage sheds, and basements in search of valuable collectible toys. Clearly a toy nut himself -- his t-shirt proudly proclaims "still plays with toys" -- Hembrough relishes spending his days perusing the toy bins for valuable gems. Here are five tips for turning your hobby into a business inspired by the way Hembrough has made his toy mania pay:

1. Buy right. Know the true value of your product, and be willing to set aside your own wants. Keep your hobby-self in check, or you'll end up with a closet full of unsalable stuff.

Sometimes collectors counter-offer and want Hembrough to pay more for their toy. He will often pass on the purchase because he knows what toy collectors are willing to pay for that particular item in that condition. He might be dying to own that toy, but he stays focused on the profit-and-loss realities.

2. Cultivate supplier relationships. Opt for building a strong relationship over making the biggest profit. Hembrough isn't out to rip off toy collectors, as he's hoping to come back and visit them again to make more purchases. He approaches each collector with respect, and always asks each time, "Are you willing to sell me this?" before he names a price.

3. Stay on top of marketing. Getting you message out is just as important as having good products. When Hembrough takes a risk and makes a big purchase, like a Star Wars pedal car from the 1980s, he calls his assistant from the road to get her started making marketing calls immediately. With a higher-ticket item, it'll take more marketing to find a willing buyer, so he gets right to it.

4. Watch the cash flow. In the collectible business, it's important to make sure you don't tie up too much money in inventory, or soon you don't have grocery money. Many of Hembrough's toy purchases are under $20, but the Star Wars speeder was a $750 purchase -- all the more reason to find a buyer quickly to get that cash liquid again to cover bills

5. Stick with what you know. Toy collecting is a huge arena with many areas of specialty. Hembrough smartly sticks with what he knows best and has cultivated a customer base for -- classic TV and movie-related toys, primarily from the 1980s.






 




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