You invest significant personal time and effort. You depend on the resulting income.

Your expenses are ordinary and necessary to run your business

You have a track record in this industry and/or a history of making profits

You have multiple customers or professional clients

You may sell occasionally, but making money is not your main goal.

It's something you do in your free time; you make the bulk of your money elsewhere

Your expenses are driven by your personal preferences and not strictly necessary

your customers are mainly relatives and friends

You dont have professional training in the field and have rarely or never turned a profit