There is a thin line differentiating a hobby from a business. Some times it is difficult to label the activities which you undertake. It is important that you must know the difference between the two, so that you can give them the importance they deserve. Whether you don’t know in which category your activities fall, yet they still take time of your life and you are spending a bit of money on them as well. In this peace of writing we shall discuss some of the major factors which help in classifying your activities as business or hobby.
Is there a Monetary Value Attached? The obvious difference between a hobby and a business is the monetary value attached. If you incur a certain amount of cost and expect to have some return over it, then most probably you are running a business. And if you invest and don’t give a dime about the return; then the activity can be classified as a hobby. And it is solely an activity you do in your leisure time.
Is there some Objective to the activity? You have to ask yourself that what is the objective of the activity you are performing? Is it just for pleasure or there is some commercial aspect attached to it? Take the example of blogging, if you are blogging just for the purpose of sharing your feelings and communicating with other people then it can be considered as a hobby. But if a friend asks you to share your feelings and experiences for his web site, then there is a whole new commercial aspect attached to your blogging hobby. So now it can be considered as a business, because by the end it generates or assists in generating profit for your friend’s website.
Do you frequently perform the Activity? The other thing you need to observe is that how frequently you are performing the activity? Whether you have a specific time assigned to it, or you do it on daily basis and sometimes you just perform it abruptly? If you undertake some activity and do it any time of the day and have no specific hours devoted to it; and perform it when ever you wish of doing so, then this activity can be your hobby. Because you are not committed to it; and perform it just for the sake of pleasure. While on the other hand when you perform the activity in specific hour of the day and perform it frequently without any postponement then this activity has the prospects of a business.
Do you put emphasis on the way Activity should be carried on? Another way to differentiate between a hobby and a business is the emphasis you put on its management functions like planning and organizing. If you properly plan and organize an activity, like the time its going to consume, the resources required, distribution and prioritizing of tasks involved in the activity, in what manner the resources will be utilized and how presentable your activity should look; then the chances are the activity you are under taking is surely a business. While on the other hand you neither plan nor organize any of the factors affecting your activity then it must be considered as a hobby.
If your answer to any to two of the above factor is YES then it would be realistic to presume that you are running a business. And if the answer is NO, then it is merely an activity to amuse you in your leisure time.