Hobby or Buisness 1040 income or schedule C? 1099-misc, Direct Sales?

[kimberly b]

I have had a direct sales business/hobby for the past 5 years. The first year I had it, I claimed the income and expenses as a business on a schedule C and claimed a loss (I was expecting to run it as a business). The next year, I realized I was spending more money than I was making and claimed it on my personal taxes as misc income (not for profit) and equal amount losses (IRSmaximum) as deductions and have now done this for the past 3 years. This past year, I have been working harder at making it a more "for-profit" buisness. I feel I should be doing a Schedule C, but will this be a red flag for the IRS? My husband also has a hobby on the side that we also listed as misc income with equal losses on our 1040 but he is making more money as well (he received a 1099-misc with income in box 7). How will this look to the IRS, if we now have 2 schedule C's for businesses we were only claiming as hobbies for the past 3 years?

Thank you in advance for your advice!
Yes, looking at things now, I probably should have keeped a schedule C (I didn't realized I could extend the loss to profit years), unfortunately it is too late . No, I do not keep an inventory for my direct sales.