Can you turn a Hobby in to a Business?
What do you love to do? Can you turn that hobby in to a business? For many Americans, what they love to do and what they do for a living are two very different endeavors. “After all, that’s why they call it work” is one of those common American clichés that drive the point home that many people don’t go to work and do what they love.
Why is that? Because often what we love doesn’t produce enough of revenue to support our families and for years, that was the case with Jim Olson. Olson grew up with a passion for woodworking and a natural love of music. He combined these in to Jim Olson Guitars, a line of guitars that he hand crafts by himself but like many, his love of art and woodworking wasn’t paying the bills.
Each guitar that he made was a labor of love. He spent hours on each guitar, only able to craft about 30 guitars each year. In 1979 he made a deal with a distributor where they would pay him $447.50 per guitar and sell each one to retail customers for $895. While this seemed like Jim had finally turned his hobby in to a business, this was far from true.
Only able to make 78 guitars in 36 months, Jim only made $5,000 in profit. This was hardly enough to support his family. He tried hiring people to help him but they didn’t have the same passion for quality that he did so he went back to making them by himself. He took on a series of part time jobs to make ends meet but still, his love of guitars was foremost on his mind and causing financial tension at home.
In 1989, James Taylor, one of the most famous guitar players in the world, was coming to Olson’s home town to play a benefit concert. Olson asked if he could leave one of his guitars in the hotel where Taylor was staying. Taylor played the guitar and ordered two which he still plays today.
This was Olson’s big break. He had so many deposits for guitars that it took him three years to meet the demand and what was worse, his guitars started appearing on Ebay for triple what he was charging customers for a new model. He felt an obligation to supply his guitars for the locked in price that his customers had already paid.
In 2000, he had filled all of his back orders and raised his price to $12,500 for a basic model guitar. With features and add-ons some of his guitars are now selling for $30,000.
Although it took Olson decades to turn his hobby in to a profitable business, he proved to all budding entrepreneurs that having passion and love for something can be a business but it will always take time and hard work.