For many of us, a dream job involves being your own boss or getting to partake in your favourite hobby or passion while using it to turn a profit. For most of us, this often seems unachievable and distant, but understanding how this can be achieved can help more people strive to own their own businesses and become budding entrepreneurs.

Following mass redundancies at the start of the financial crisis, around 10 years ago, many skilled individuals found themselves no longer employed. Turning to their hobbies and passion projects, an increasing number of SME’s gradually began to spring up, with many of them relying on alternative finance to boost their business initially.

If you’re considering turning your hobby or personal project into a business, it’s important to understand the core elements that go into launching an SME. Furthermore, it’s crucial to spend some time educating yourself on the types of alternative finance available to SME’s, including P2P lending, which is a popular choice for business owners who cannot access traditional loans.

Taking the plunge from passion project to pounds

When the Guardian Money surveyed over 4,000 people, they found that 86% of the people who took the plunge and began a hobby orientated business experienced greater job satisfaction than those working in traditional roles. 28% of British adults have considered launching their own company and becoming their own boss, as revealed by the Start-Up Loans Company and YouGov survey.
However, less than a third of us who have the desire to convert our passion into pounds failed to try and get it off the ground initially. This could largely be to lack of capital, the inability to access traditional loans and support and a distinct lack of understanding of how to make it work.

How can you monetize your hobby?

Planning is crucial in the early stages of launching your own business venture. Considering the kinds of finance available to you is essential. You will likely need any money borrow to be secured against assets, this could include property or savings, so think about what you have to offer a lender. Having cash to support you during the early stages of getting your venture off the ground is essential – so it’s best to start saving right away.
Ensure you manage your time efficiently and prioritise the critical tasks. You may find yourself having to find extra hours in the day to work on your project alongside your regular job. This could also involve recruiting help from family members or friends, to help you gather resources, meet deadlines and accomplish goals in reasonable timescales.
Ensure that you build a presence online, this will not only attract customers but will also provide a useful information source to potential investors. Investors want to know that there is a demand for your product or service. You can demonstrate this by gaining a following across social media platforms and creating a website that is secure and offers customers a great user experience. Using an online system rather than brick and mortar stores to distribute products, will also save money, utilising a highly successful system that has been adopted by substantial online retailers, such as Amazon.
Networking will become your best friend when it comes to seeking out investors and business supporters. Events, clubs and conferences relevant to your specialty, alongside business networking events, will offer you the opportunity to meet likeminded people alongside knowledgeable business owners and entrepreneur. Prepare an ‘elevator pitch’ that can sell your business in just a few sentences. This will summarise you, your business and the key unique selling points. It should be snappy enough to be reeled off quickly, without sounding like a sales pitch.

How to use P2P lending for your business

For many new business owners and SME’s, traditional bank loans are not an option, due to stringent restrictions. Of course, alternative funding such as P2P lending is often available to most prospective borrowers. P2P lending offers investors the opportunity to find and invest in both established and new businesses. P2P lending platforms such as Huddle aim to both educate and match lenders with borrowers. Higher interest rates provide lenders with extra security whilst offering SME borrowers the chance to acquire the capital they need to fund their businesses.

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