How to start a home-based crochet business

Are you thinking about using your crochet skills to build a small business? With crocheting, you can turn your creative hobby into cash by making various trendy products for customers to enjoy. 

A crochet business is a flexible venture that’d be an excellent choice to start from home. But if you’ve never started a business before, you may not know where to begin. Luckily, we can help. 

This guide covers how to start a home-based crochet business, including:

• Planning
• Setting up
• Organising
• Marketing

Before starting a home-based crochet business, it’s essential to do a bit of planning. A well-developed plan will help you begin on the right foot and set your operations up so they can succeed. 

When building a small business, it’s much easier to succeed if you know your market. In this case, conduct market research on the crochet market or craft industry. 

By looking at the news, industry reports, and popular shops, you can learn:

• The market size – how much money is the crochet and knitting marketing bringing into the UK and globally each year?
• The demand – how many people buy these goods, and how well is the market meeting these customers’ desires?
• The competition – what other businesses tap into this market, and how can you stand out from them?
• The trends – what products are popular or commonly sold?
• The audience – who likes to buy hand-made goods, particularly crochet products?

To learn more, check out how to conduct client research before starting a business. 

You may already be a whiz at crochet, but if you’d like to sharpen your skills to make them more sellable, think about taking a course on the subject. 

For beginners, there are great online options at Udemy. Or you could study more advanced patterns and techniques with accredited courses at the School of Stitched Textiles.

Aside from studying a course, you might seek books or pattern guides to expand your abilities. The Ultimate Crochet Bible offers a comprehensive guide to stitches and techniques. Then, Lovecrafts offers hundreds of free patterns. 

With your skills ready to go, consider what a niche will be for your crochet business. 

Crocheting can turn yarn into many things, but you can’t make everything. If you choose what you create wisely, you’ll target a specific audience to earn sales. For example, you might design crafts for children or target an adult audience. 

Here are a few goods you may create: 

• Clothing 
• Bags
• Gloves and hats 
• Pocket squares or placemats 
• Accessories 
• Toys 

Depending on how much you hope to sell, you create a mix of these things. Still, think about how you can make your products work together for a cohesive brand. 

Once you’ve determined your niche and who you’d like to sell to, build a product list and how much you’ll charge for them. 

To set prices, calculate what it costs you to create a single product, including yarn and labour. Then, determine a sufficient profit margin and compare your products to other prices on the market. 

Next, stock up on essential supplies to start creating your crochet products. Your yarn and crocheting tools will make up the brunt of your startup costs. 

To save money on yarn, compare pricing options and consider buying in bulk. Look to shops like Lovecrafts, Etsy, and Alibaba to find a variety of colours, sizes, and materials.

Aside from the yarn, you’ll likely need: 

• Crochet hooks (various sizes)
• Stitch markers
• Large needles
• U-shaped needles 
• Stitch holders 
• Bobbins 
• Tape measure 
• Scissors 
• Needle gauge
• Pom pom makers 

You may want to find an all-encompassing crochet kit to stock up on these supplies if you don’t have them already. Find options on Amazon.

Writing your crocheting ideas into a business plan can guide you through starting your business and keep you on track. Include what we’ve covered so far in a document to help you develop your thoughts and prepare for success. 

Your business plan may also include:

• Your purpose or mission
• Your core values 
• Short, medium, and long-term goals 
• Your starting budget 
• Any funding you might need to get started

Knowing how to start a home-based crochet business also means turning that business into a legal company. Let’s go over how to make that happen.

To turn your new business into a legal entity, you’ll need to register it with the UK government. You have two options:

• Sole trader – you’re personally liable for your business, but you’ll have fewer regulations and taxes to deal with. 
• Limited company – the business is a separate legal entity from you, but you’re responsible for a few more taxes and regulations.

It’s a bit easier to register as a sole trader, so consider starting there with your home-based crochet business. 

Whichever company structure you choose, you’ll need to manage and report your earnings for taxes, which may include: 

• Income or dividend tax 
• National Insurance 
• Corporation tax – this only applies to limited companies 
• VAT – this only applies to VAT-registered businesses  

Self-employed people with variable income submit a Self Assessment tax return to determine the taxes they owe. 

You may need insurance to protect your business from unexpected risks. For example, you could ensure your goods if you plan to ship them. Or, you might insure your inventory in case it gets lost or damaged. 

Check out Superscript for great small business insurance options. 

When starting a home-based crochet business, it’s important to organise your processes for efficiency. Here are a few things to think about.

Since you’ll run this business from home, organising your daily operations is even more crucial to avoid distractions from your personal life. 

Consider setting up a separate office or workshop so you can focus on creating your crocheted goods and running your business. You’ll also need sufficient storage for your many balls of yarn. 

To make the most of your time and increase productivity, you may want to use a business management tool like Google Workspace. This tool lets you organise your email, calendar, and documents in one place. 

On top of this, a project management tool like ClickUp can help you prioritise your work and better administer your time. It’ll let you create tasks for crocheting projects and track your progress. 

When you’ve stocked up on your hand-made goods, you’ll need a way to sell them. 

Due to your home-based operations, you may want to start an online shop and ship your products to customers. This method allows you to sell to people around the world. 

Here are some platforms you could use: 

• A business website with an online shop 
• An Etsy shop 
• Social media shops 

Whichever approach you choose, ensure you can accept card payments from your customers. To do this, you’ll need a merchant account. If your platform doesn’t offer a built-in payment method, consider using something like Paypal.

Without money, a business isn’t a business. So, it’s crucial to keep your finances organised. 

In fact, HMRC requires you to maintain clear records of the money you spend and earn for your business. So, being organised is essential to staying compliant.

Opening a business current account, or account specifically for your business, is the first step to organised finances. This account ensures that your business transactions won’t mingle with your personal ones. 

Separate finances increase your bookkeeping efficiency as you won’t need to examine each transaction to find those for your business.  

Apart from separating your crochet business finances, it’s crucial to understand your financial habits and performance. If you’re aware of your finances, you can make better decisions for your business, which promotes longevity. 

Countingup, the business current account and accounting software in one app, can help. It automates time-consuming bookkeeping admin for thousands of self-employed people across the UK. 

This app simplifies financial management for single-person businesses with: 

• Ongoing cash flow insights 
• Year-round tax estimates 
• Automatic expense categorisation 
• Invoicing on the go

Save yourself hours of accounting admin so you can focus on growing your business. 

Start your three-month free trial today. 

Another major part of starting a home-based crochet business is marketing that business to find customers and earn a profit. Let’s go over the best tactics for a home-based marketing strategy. 

Creating a brand identity lets you reach people more effectively and win over customers. Your brand is how you present your business to the public. It helps you create a presence and develop awareness for your business. 

When developing your brand identity, consider the following: 

• The target audience – Who do you want to reach with your brand? Who can benefit from your products or services the most?
• Your story and values – What is your business’s purpose, and what made you start it? What values drive your business? For example, you might value sustainability or individual expression.
• The style and colour scheme – What colours might you use when designing your business’s marketing? You can use these to create a unique logo. 
• The tone of voice – How do you want to come across to your audience? Maybe you want to use playful and casual language. 

Developing a digital marketing strategy is essential to reaching potential customers worldwide.  

Even if you sell through another platform, a business website is the foundation of your digital business marketing. This website should hold all the critical information about your business, including products, prices, and contacts.

On top of this, think about starting a crochet blog on your website. If you write articles about crochet tips and project tutorials, you can reach more people interested in crocheting. 

Tip! Try enhancing these articles with SEO to increase website traffic. 

Social media marketing is another great way to reach people who might be interested in your crocheted goods. Let’s look at a few platforms that could work best for this type of business. 

• Instagram – this is a visual platform, so it’s a good choice for posting your crochet products and sharing details about availability. 
• Pinterest – this photo-blogging platform would be an excellent place to post infographics with crocheting tips and pictures of cool outfit ideas. You can also develop boards for your followers to enjoy. 
• Youtube – with this video platform, you could post tutorial videos about doing crochet projects to reach people within your target audience.  
• TikTok – this platform lets you post short-form videos, so you can post quick tips and tutorials about crocheting.  

Though it may take more investment, advertising your business can help you reach more people with less time and effort. It could be an excellent approach to kick start your home-based crochet business. 

For advertising, you could use Google to boost your blog or website. Alternatively, you could design advertisements for social media platforms so people come across your business. 

To learn more, check out how to advertise a new business effectively.

On top of expanding your digital audience to earn customers, try attending local events to put your crochet goods in front of an audience. You might attend and sell your products at craft fairs, farmers’ markets, or small business events. 

You can spin your business idea into a long-term and profitable venture now that you know how to start a home-based crochet business. Before you know it, you’ll transform yarn into sellable goods that customers want for themselves. 

Just remember to: 

• Outline a clear plan before getting started
• Set up your business legally to prepare for regulations and taxes
• Organise your operations and finances to ensure things run smoothly
• Market your brand effectively to bring in the right customers

Next, consider checking out our new business launch checklist to prepare for a strong start.