I’ve been a digital entrepreneur for almost 20 years. (I’m 31.) I recently rediscovered my ancient Neopets account. There lies the earliest known evidence of my digital entrepreneurship. (I designed logos and banner images for guilds and shop pages in exchange for Neopoints and rare items.) I’ve been blogging in some form since ninth grade. And if my enormous trove of baked-goods photos from college are any indication, I was dessert-gramming way before it was cool. If only I had stuck with it, sigh. (Or if I could list *any* of this on my resume.)

Over the course of my clearly illustrious career, I’ve noticed three typical stages of an online business. Not everyone goes through every stage, but most do. I’ve seen this play out in a number of business models from e-commerce to crafting to direct sales. I’m going to focus on service-based businesses since that is my most familiar territory.

The Hobby Path

Most people start here. And some people stay here, which is cool! There’s some activity you happen to enjoy: baking, decorating, writing, sewing, photography, yoga, painting, rocking babies, whatever. On this path, you become relatively good at your craft. (Or at least better than any of the people who will eventually give you money! Which is really all you need to be, right?) You may or may not charge for your work at this point. Maybe you don’t quite feel comfortable doing so. Eventually, though, friends and family will see and hear about what you’re doing. And someone will say, “Gee, you oughta start a business or something!”

The Service/Product Provider Path

After practicing your hobby for a little or a long while, you may decide to monetize it. The most important thing to do as you start down this path is to define your process for working with clients or customers. Doing this will give you confidence in client interactions, help you find ways to become more efficient, and shape your marketing message more effectively. I think it is also very important to define your goals and values when you start out. There is a joke that creative entrepreneurs are the only people who will work 80 hours a week to avoid working 40 hours a week for someone else. I never wanted to work that way, so I structured my business accordingly from day one. Understanding your process, goals, and values will make many decisions about clients, pricing, and work hours a lot easier.

The Content/Knowledge Provider Path

This path often gets marketed as “passive income” and this is where wannabe bloggers, influencers, and the ever-popular “course creators” come to die. Of course there are also many successful bloggers, teachers, and influencers. But in my observations, they are successful because they treat their content, expertise, and influence as a valuable, marketable service to their readers and partner brands. And they work hard for it. Many of them started as hobbyists, became excellent service providers, then finally parlayed all that content and knowledge into consulting, teaching,and influencering.

for example:

Jenna Kutcher bought a used camera on Craigslist, built a successful wedding photography business, and then started teaching photographers how to run their businesses. Liz Bohannon sold sandals out of her car, grew Sseko Designs into a flourishing ethical fashion company, and is now a Forbes Top 20 speaker. Sally Hogshead, author of my favorite branding book, Fascinate, was an award-winning advertising copywriter before she wrote the book and developed the product line around it.

All the entrepreneurs named above became experts in their field before they could earn “passive” income through their knowledge. I often see people try to skip straight to this stage and give up when the six-figure earnings don’t come in fast enough. If you just want to start a blog and monetize traditionally through ads and sponsorships, that’s totally fine. Just know that it will take work, time, strategy, and maybe a little luck. If you want income sooner, consider adding a service component to your content creation and knowledge sharing.

keep in mind:

The upshot of this approach is that you may become so busy and profitable as a service provider that you don’t have time to create content, which is exactly where I am! But hopefully this will enable you/me to build enough of a following (and financial cushion) that switching to a content-centric approach will seem like a natural progression rather than a huge leap.

Which path will you choose?

There’s no one right way to run a business. (There are a number of not-so-smart ways, though!) It ultiamtely comes down to what you want to accomplish, what you want to hold onto, and what you’re willing to let go to achieve your goals. I’ve always enjoyed helping my writing and design clients think through those questions. So I’ve started offering the Business Birthing Bootcamp, which I promise is much more gentle than either birth or bootcamp…I just enjoy overly dramatic alliteration. If you’re looking to go from hobby to business, get in touch: I’d love to help.

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