On the show Shark Tank, Mark Cuban is fond of telling would be entrepreneurs “You don’t have a business, you have a hobby. I only invest in businesses.”
I am sure this offends a lot of self professed entrepreneurs, but I agree with him. How do you know if what you have is a business or a hobby? His definition of a hobby is if you are doing your business on the side of your real job. If you are not going all in, if this is not your sole source of income – then you just have a hobby.
Businesses start all sorts of ways. I started mine when my first child was born. My wife worked full time. I freelanced and was Mr. Mom. Gradually, I built up clientele, we got an office, employees and worked our butts off for 23 years.
I believe that if I had worked another job and done freelancing on the side the business never would have gotten off the ground. The fact that I HAD to find clients is what pushed it to grow. That and the need to prove to myself I could do it.
Some people start as a side business, build it up to where they can quit their job and go full time. This is when they have a business. This is when it becomes real.
Over the years I had more than a few clients who also had “hobby” businesses. But that was all they ever were and some still are. They are not their sole source of income. If their side business fails they only lose some extra spending money.
These same people always talked about their “business” like they were in the same situation as I was. They were not. Nope. Nyeht. No way. Not even close.
My entire livelihood, my income, my house, my kids futures, my employees livelihoods all depended on my business. These “hobby” businesses had none of this. They had a hobby. It is not even in the same dimension close.
Tell me when you are up at night worrying about paying bills or making payroll because some client(s) is dragging their feet on paying you – then we can talk about what it’s like to own your own business. Because when you build a small business this is just one of many things you have to deal with.
If you have a small business that you are all in, I commend you. It takes a lot of fortitude to do this.
If you have a side business you have been doing for more than a few years and it isn’t growing, you have a hobby. If that is all you want, nothing wrong with that. Just don’t profess that to be something it is not.
So do you have a business or a hobby?
