"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.
Have you turned your passion into a business? Leave a comment and share how you make it pay.