The short answer is yes. The long answer is that turning a hobby into a business takes a bit more than just slapping a price tag on your work. You don’t want to end up underpaid, overworked, or in trouble with the tax office. So let’s go through what you need to do to get this right.
Are You Running a Business or Just Making a Few Extra Bucks?
There’s a difference between having a hobby that happens to make money and running a business, and the ATO cares about that difference. If you’re just occasionally selling something to cover costs or for fun, it’s a hobby. If you’re actively trying to make money, advertising, or selling regularly, it’s a business. If you’re unsure, business.gov.au has a breakdown of how to tell the difference.
If you’re charging people, have customers, or are even thinking about things like branding or marketing, you’re already crossing into business territory. Time to make it official.
Get the Paperwork Sorted Early
Nobody likes paperwork, but sorting this stuff out now will save you a massive headache later. First up, you need an ABN. This is your business ID number and makes you look professional when invoicing. If you’re trading under a name that isn’t your own, you’ll need to register that too. Then, you need to decide if you’re a sole trader (simple, low-cost, easy setup) or a company (more paperwork but more legal protection).
Sole traders can operate under their own name, but if you want a unique business name, you need to register it. Also, make sure you’re not accidentally using someone else’s brand name.
Sort Out the Tax Side Before It Bites You
As soon as you start making money, the government wants a piece of it. The best way to stay ahead of this is to track every dollar from the start. That means keeping records of what you earn and what you spend on the business.
Set aside at least 20 percent of what you earn for tax so you’re not hit with a big bill at the end of the year. If you make more than $75,000 annually, you need to register for GST. This means you have to charge an extra 10 percent on sales and pass it on to the tax office.
A big mistake people make is assuming all their earnings are profit. They’re not. You’ll have costs, and those costs can be tax-deductible. That includes materials, tools, advertising, website fees, and even a portion of your home office expenses. If numbers aren’t your thing, get a bookkeeper before tax time rolls around.
Pricing Properly: Stop Undervaluing Your Work
One of the fastest ways to burn out is to price too low. If you’re only covering materials, you’re not making a profit—you’re funding other people’s discounts. Your pricing needs to include your time, effort, packaging, delivery, and overhead costs.
People will always tell you they can find something cheaper. That’s fine. They’re not your customers. The right people will pay for quality, and pricing yourself too low just attracts bargain hunters who don’t value your work.
If you’re not sure where to start, look at what others in your industry charge and position yourself in a way that makes sense. And if you’re thinking, “I’ll start low and raise prices later,” just know that raising prices is harder than getting it right the first time.
Getting Customers Without Wasting Money on Ads
You don’t need a huge marketing budget to start selling. The simplest way to get your first customers is to show up where they already are. Social media is the easiest way to do this. Pick one platform—Facebook, Instagram, TikTok, whatever suits your audience—and start posting consistently.
Word of mouth is another big one. Happy customers talk. If someone loves what you do, ask them to share it. Reviews and recommendations go a long way.
Markets and pop-ups are great for testing your product in person. If you’re selling something physical, this is a great way to see what people actually want and get direct feedback.
And if you don’t have a website yet, don’t overthink it. A simple online store or even an Instagram shop can get you started.
Learn From People Who’ve Done It Before
Plenty of Australians have turned hobbies into full-time businesses. Bree O’Connor started a small cleaning service and scaled it to nearly six figures in a year. She treated it like a business from day one, set her pricing properly, and focused on giving great service. No secret tricks. Just consistency, pricing that made sense, and treating customers well.
The same applies to whatever you’re selling. The difference between people who make it and people who don’t is that the ones who succeed take it seriously. They don’t wait until they feel ready. They start and figure it out along the way.
If You’re Waiting for the Perfect Time, You’ll Never Start
Here’s the truth. No business starts out perfect. You’ll make mistakes. Some things won’t work. You’ll change your branding, tweak your pricing, and improve your process. But if you sit around waiting until everything is lined up perfectly, you’ll never launch.
Set up the basics. Get your ABN. Sort your pricing. Start selling. Fix things as you go.
It’s better to start messy than never start at all. Before you know it, your little side project might just be a full-time business.
