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Your Laser at Work: Making a Home Hobby into a Business

Explore a few questions before even writing a business plan. These questions are directed toward what it will take to make a living from a business venture.

This article appears in the July issue of GRAPHICS PRO. To make sure you don’t miss out on other industry-focused pieces, subscribe today.

Many readers began working with a laser or other personalization technology to make something for themselves or their home. It’s fun learning to use the new machine and crafting a new item.

You may have pieced several cutouts from wood, plastic, or leather together with glue and perhaps painted some pieces. Friends saw the new item and wanted to know if you could make one for them. Or perhaps you posted a photo on Instagram and had a few followers that wanted one. Now you get enough orders that you are considering making a side or perhaps full-time business from this great new venture.

Before jumping into a larger business commitment, spending some serious money on more equipment, or counting on your business income to pay bills, make sure you understand what this new business will require. Explore a few questions before even writing a business plan. These questions are directed toward what it will take to make a living from a business venture.

Can you make a living from your hobby?

custom laser engraving
This sign uses a purchased background. The other pieces have just been cut and painted or stained. The mountain and bear are three layers. The bunny is two layers. These could be further simplified by cutting or engraving the graphic into the back piece. Engraving is the simplest solution. (Images courtesy Kim Pyle; @roamcollective.kb)

If you have sold a few products, how much did you charge for them? If you have not sold anything yet, check out social media to see what similar items are selling for.

Take the sales price and divide it by the estimated number of hours it took to make the product including your time to work with taking the order and perhaps shipping it. Convert this to dollars per hour. In an eight to 10-hour day, how much is the maximum you can earn if you had orders all the time? This exercise will help you realize if making a large enough business from this hobby to pay bills is a worthwhile venture.

You will likely need to find ways to shorten your production process, perhaps by half or more. Consider four to six custom products to sell and designing them in a way that you can pre-make some of the main pieces that will not need to be customized. Production efficiency is important. Minimize gluing and painting, especially small intricate pieces.

You may need to simplify your products to earn a living. This advice may not apply to everyone; however, the method of thinking will help you create a business regardless of what it is. Design products so you can make parts in batches. Remember, smaller is not necessarily cheaper. Miniature products and parts create challenges that require a lot of additional time. You may have more discarded parts because of the difficulty of cutting them out, gluing them together, or just breakage. Consider a product size that provides an easy production process while not over-using expensive materials.

Using off-the-shelf products and parts

Many personalization businesses sell all or mostly off-the-shelf products that are personalized with their laser, full-color system, sandcarving equipment, or another method. Building a business with off-the-shelf products from industry suppliers is a doable (but not easy) approach to building a profitable business.

Building a business from products you design and produce is a much greater challenge. You want to explore industry suppliers’ products where parts can be used to help build your design or perhaps can be substituted for one or more parts that you have been producing. The big benefit of using some or all industry-supplied parts is that the cost of production when making thousands in a factory is far less than your cost of making one or a small number at a time.

The test

custom laser engraving
A two-piece decor set. The entire product was custom cut, including the back of the sign. The small trailer required over a dozen pieces to be cut and hand-painted. The sign contains all cut wood pieces. Santa’s hat is hand-painted. This product is not a recipe for profits. (Image courtesy Kim Pyle; @roamcollective.kb)

As a hobby, you created a great-looking product that everyone loved. It took you about four hours to produce, and 15 minutes to package for shipping. Your material cost was $12. You would like to earn $35 per hour to not only pay your bills, but pay for your investment in your laser and all the other supplies and equipment you need to make your product (while you are working out of your home). Based on this goal, you have to charge $160.75.

Can you charge this amount for your product? If not, you need to greatly reduce the production time and perhaps find some pre-made parts from suppliers that you can substitute for parts you make.

This exercise helps you figure out if pursuing a business venture is practical. If it is, consider beginning a business plan, however brief or thorough you can commit to. Your business plan allows you to explore all aspects of a business whether part-time or full-time.

Education

You will have a lot of questions throughout this journey. There are many educational resources, including GRAPHICS PRO‘s monthly publication and website. Education is not only a resource but also a continuous advantage. Many of your competitors stop seeking out education for continuous learning once they have answers to their questions during start-up.

Become an expert with your equipment and save yourself a lot of repair costs. Become a marketing expert and control your order flow. Become a graphic artist and wow your customers by giving them the quality graphics they want. There are many areas of your business you can become an expert in. Continuous education is a continuous advantage.

Investment mindset

custom laser engraving
The frame used for the background and the puzzle pattern was purchased. Pre-coating the wood with a matte clear coat would eliminate the need for sanding and allow for gluing on the cutout text. The names were all laser engraved, reducing text application time. (Images courtesy Kim Pyle; @roamcollective.kb)

How do you look at the price you paid for your laser? Do you feel good because you got it cheaper than others? I feel a successful and profitable mindset is an investment mindset.

What is the return you expect on your investment? I don’t mean to say the price isn’t an important factor in your buying decision. It is a factor that should be considered after you identify which features meet your needs and how often and for how long you expect to use this piece of equipment each week.

For example, if your laser will be your primary piece of production equipment that runs every day, quality is crucial. All machines require maintenance and repairs. Infrequent and quick repairs you can do yourself is important to on-time delivery. Not being able to produce for several days, a week, or even longer can create both customer problems and greatly reduce income.

Before you buy, understand the maintenance requirements, the most frequent parts that need to be replaced, and their costs. What parts should you have on hand to reduce downtime and overnight shipping costs (and preserve your sanity)?

Equipment maintenance and repairs are often overlooked in the business planning process. A laser tube replacement will cost you several thousands of dollars. Is the cost of maintenance and repairs part of your pricing calculation? Do you have a maintenance and repair budget and savings plan? If your pricing formula does not account for all your costs, you will be surprised one day when you add up your expenses and find the revenue does not cover these expenses or your actual earnings are not what you expected.

Marketing

You may need to increase your order flow from a few orders each month to 10 each week to rely on the income. That order number of 10 may be what you need every day to make a full-time living. Is your present method of marketing able to give you this order flow a year from now?

Friends and family business is not likely to be continuous, although word of mouth is great marketing. Facebook, Instagram, Pinterest, and the many other digital methods of marketing are key to explore today. Meeting prospective customers face-to-face can also be important. Can you hang out where potential customers are? Do you have an active chamber of commerce?

You may need to try a number of marketing methods to see what works for you. This is where a written business plan provides you the opportunity to explore the various methods you can experiment with and help you create a marketing budget. Talk to other local small business owners to see what works for them. If your business will be all online, find chat rooms where you can communicate with some seasoned and successful business owners.

Some hobbies may be focused on the industry you are presently working in such as accessories for construction workers, firefighters, or law enforcement. If you plan to market to present customers or employees of the company you work for, be cautious as you may need to explore this option with your boss. If you create issues with these customers, you may be forced to go full-time with your new business earlier than expected.

Shipping

Shipping is another overlooked subject. Today, you typically see “free” shipping included in the price of the product you order online. The shipping cost is actually included in the pricing formula, and if you buy from a large company such as Amazon who may be filling the order for someone else, their shipping costs are far lower than what you will pay.

Explore not only your shipping costs but the cost of materials and time to package your product. The materials selected and the method of packing must also be secure enough to minimize breakage. Packaging products properly can be time-consuming. Find simple methods and materials that are quick to work with.

I could easily dedicate a whole book to this subject. I have just touched on some of the topics that are overlooked and not thoroughly explored. My goal is to give you some thought-provoking questions to consider and encourage you to write a whole business plan. Going into your new venture with confidence will make it more fun for longer.

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Bob Hagel

Bob Hagel and his wife Dana offered a full line of personalized products using laser engraving, sandcarving, and full-color UV direct print on products for nearly 20 years. The pair sold their 17-year-business Eagle’s Mark Awards & Signs in September 2020. Bob remains an expert in the awards, recognition, and signage industries while he enjoys retirement.

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