Step-by-Step Guide How to Start Crochet Business (2023)

Hello again my maker friend! Have you ever wanted to turn your passion into a paycheck and wondered how to start a crochet business? Well, you have come to the right place because I have put together this quick step-by-step guide to starting a successful business.

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Crochet has experienced a resurgence in popularity in recent years, and many talented individuals are capitalizing on this trend by starting their own crochet businesses – and you can too! Okay, do not get me wrong, it is going to take A LOT of effort and time. Crochet is something that is 100% handmade so expect to spend lots of time upfront. You NEED to put in the work in order to be successful at this. You might even fail, but that is okay! As long as you get back up and keep on trying! I have a whole post about failure and what it taught me to grow my creative business, read about my failures here.

In this post, I’ll walk you through the essential steps to start your own crochet business successfully. Now, I am continuously learning as I go so make sure to circle back to see what else I discover! I am just honestly happy to share what I know and help a fellow makerpreneur by taking out the guesswork by sharing things I wished someone had told me!  From identifying your target market to developing effective marketing strategies, I’ll cover it all.

Developing a Crochet Business Plan

First things first, you need to come up with a business plan. Now, you do not need to have everything sorted out! Do not let making a business plan hinder you from just starting.

At this point, try to figure out what you want your crochet business to look like. Close your eyes and envision yourself years from now. What are you doing? What products are you making? How are you spending your days? These are all important questions to determine what kind of crochet business you want.

Yes! You heard me right. There are different kinds of crochet businesses.

When you closed your eyes, did you see yourself at a booth interacting with shoppers? Maybe a handmade business with physical items is for you. If so, circle back here for my best tips to vending at a craft fair.

Maybe you saw yourself sitting down, planning out your own designs and making mood boards. You just might want to become a crochet designer.

Or maybe you envisioned yourself in front a computer, plugging away and making connections with different brands. My friend, maybe you want to become a crochet blogger and make your earning with SEO and affiliate marketing for products and online courses. 

See! I told you there are a number of crochet businesses. Choose among these business structures based on what makes sense for you at this time in your life. Things might change later on and that is totally normal and expected.

Once you figure it out you can sit down and make a business plan. A well-thought-out business plan is a roadmap to success for any crochet business. Outline your goals, objectives, and strategies in a comprehensive business plan. A business plan not only helps you stay focused but also serves as a valuable tool when seeking funding or partnerships in the future.

Necessary Permits and Legal Considerations in Starting a Crochet Business

Before officially launching your crochet business, it is essential to comply with any necessary permits and legal requirements. Now this is actually the part that really stops creatives in their track because – let’s be honest – it is intimidating and boring.

I made this post about the things I did during my first year of running a creative business you might find helpful.  

Reading about other people’s experiences is always helpful and inspiring. However, make sure to do your own due diligence and research local regulations and business licensing requirements in your area. 

For example, in most cases and depending on your location, you may need to register your business name or company name, obtain a tax ID number, and ensure compliance with local zoning regulations. 

The best way to do this is to call the appropriate offices and simply ask. Trust me, it is a lot easier than you think and not as intimidating as it seems. Most people are very friendly and will point you in the right direction. 

Most makers start off with a sole proprietorship and incorporate as they grow. Sole proprietorship is simple and straightforward. What you make is considered extra income. You are running the entire show here. You and your business are considered one person.

How to start a crochet business includes proper financial management. Financial management is one thing a lot of people overlook when starting. however, good financial management is what sets people up for success. Here are some financial moves I made when I first started my business. This includes setting up a business bank account and proper bookkeeping for creative businesses.

Things get a little more complicated when you incorporate but there are a lot of pros as well. I just recently incorporated (2023) so I can update you on how that goes after a year. I am definitely even more careful with the intake and outflow of money in my business. My corporation covers more than just my creative business and includes my private practice. Because of the complexities, I hired an accountant to help me stay in compliance.

crochet items that sell
how to start a crochet business

Identifying Your Target Market and Potential Customers when Starting a Crochet Business

Okay! Enough with the nitty gritty business talk. Let’s get into the creative stuff when learning how to start a crochet business. 

Now that you have a business plan and have taken care of the daunting task of getting those legal considerations out of the way, you can now enter into your zone of genius: making!

​We have all heard the saying “if I build it, people will come”. In this day and age there is more to it. First things’ first you need to figure out who is your target audience. These are going to be the people who are going to support and buy from you!

Understanding your target market is crucial for a successful crochet business. Identify the demographics, interests, and preferences of your potential customers. These details will help you decide what platforms or events to focus your energy on. Just like your business plan, this can change over time too. Do not stress to much about it. Just focus. 

After you have some sort of idea of what your target market looks like, determine whether you want to cater to a specific niche. To make sure you create a profitable business you need to keep your target audience in mind. Conduct market research to gain insights into your potential customer’s needs and preferences, which will help you tailor your products and marketing efforts accordingly.

Crochet Products to Sell or Design

Now that you know who your target audience is, you can research trends and decide what type of crochet products you want to offer. 

When learning how to start a crochet business you need to understand the crochet market. The crochet market is diverse and offers numerous possibilities, including clothing items, accessories, home decor, and baby items. Here is a way to find what crochet items sell the best.

Also, keep into consideration your own strengths and what you can and cannot do. For example, I am a crochet designer who likes to experiment with textured stitches. My target audience knows that they can expect a variety of stitch or colorwork with me in neutral tones. Keeping this in mind, I will research trending items and think about what I can design to appeal to this trend. 

When I first started my crochet business, I made a lot of amigurumi. My target audience was actually children. I found that at the right price point, parents exploring craft fairs with their children will buy something the kid wants. So I researched what kind of animals were trending for kids (specifically in my vicinity) and made these. My plan was foolproof and I crushed each craft fair I was a vendor at. 

In summary, identify your strengths and preferences to determine which products align with your skills and interests. Consider factors such as market demand, competition, and profitability when selecting your crochet products.

Cost of Materials and Pricing Your Products

The cost of handmade items is a HOT topic in the maker community. 

Customers and even sometimes yourself may say “oh that sounds expensive”. One thing that I always say and know for saying is “Sometimes you are not even your own target audience”. Let that sink in. If it is too pricey for them, then they are not your target audience. I cannot even begin to tell you how my life changed when I began to price my items fairly and started saying “no” to custom orders (because it was not a part of my business plan. If it is a part of yours, great!).

Bottom line: You need to know how to price your handmade items, patterns, partnerships, etc. Remember, this is a business and not a hobby. You are in a profitable venture and in it for the long run. Your prices will make or break you from the start and is one of the most important things to consider when learning how to start a crochet business.

Keep in mind, crochet (whether you are making physical items to sell or designing things to turn into patterns) take a lot of time to make! Unlike knitting, crochet cannot be replicated by a machine and is 100% handmade. 

Determining the right price is actually a part of the things you need to Nail to Make Money on Etsy.

What to consider when pricing your crochet items:

1. Start-up costs – this includes any costs related to getting started. Do you need a computer or your own website? Are you going to need a canopy for local craft fairs? How much did it cost to get your legal stuff sorted? Maybe you got business cards printed for your events. Consider all of these factors that go into play before you even begin selling.

2. Cost of materials – Calculating the cost of materials accurately is essential to ensure profitability. Consider factors such as the cost of yarn, hooks, notions, packaging, shipping materials, and any additional expenses related to your crochet business.

3. Hourly rate- I said it once and I will say it again, crochet takes a long time to make. Determine what your hourly rate should be and factor this into your pricing strategy. Your level of expertise plays into this number too. For example, a more seasoned crocheter might be able to finish things 3x faster than a novice crocheter and with better quality. I have these tips for making things faster with a handmade production line.

Determine a fair and competitive pricing strategy that covers your costs, time invested, and allows for a reasonable profit margin. Research the market and analyze your competitors’ pricing to ensure your prices are aligned with industry standards and customer expectations.

Leveraging Social Media Platforms for Business Growth

Let’s be honest, in this day and age you need some sort of online presence to succeed. It is crucial to learning how to start a crochet business because it is very visual.

Social media platforms are powerful tools for promoting and growing your crochet business. I primarily use Instagram to share my work, behind the scenes, but the most important thing is to connect with a community. Establishing a strong presence on platforms such as Instagram, Facebook, Pinterest, and YouTube, as they offer vast opportunities to showcase your products and engage with your target audience. 

I do not share as much as I have before because my business plan has shifted. And that is all a part of the process. It is okay. However, when you do share, use high-quality images and videos of your crocheted items, engage with your followers, collaborate with influencers, and participate in relevant crochet communities to gain exposure and build a loyal customer base.

Social media is a lot of work but remember that it is also borrowed land. Same to say with online marketplaces, although online marketplaces are a great way to test the waters. Ultimately, you want to get people off the platform and into your online shop. One great way to do this is to collect email address where you can continuously show up for them outside of the platform. 

I want to remind you what I mentioned earlier, think about your target audience and determine where they are hanging out. This is why I am primarily on Instagram and Pinterest. Instagram is a little more curated and the fiber community is strong. People want to see what you are making, your design process, they want to see finished objects and find patterns to try or be inspired. As my business has shifted more into blogging, my audience is looking for free patterns and the number one place for that is Pinterest where I can send them to my blog posts. I don’t see much of my audience on Tiktok, but I do love the app for personal stuff!

Effective Marketing Strategies for Crochet Businesses

This leads us straight into the final step, determining an effective marketing strategy. As I mentioned, think about where your target audience is and show up to attract potential customers and generate leads. 

In addition to social media, consider other marketing channels such as a website or online store, email marketing, collaborations with local boutiques or craft stores, attending craft fairs and markets, and offering promotions or discounts. Develop a cohesive brand identity and craft a compelling story around your crochet business to differentiate yourself from competitors and connect with your target audience on an emotional level.

Marketing is just one piece of the puzzle. You need to know where you can sell or direct these leads. Keep in mind that your audience might be more comfortable buying from certain platforms like an Etsy shop or on Ravelry so try to be on both for business transactions. Diversify your income and build multiple revenue streams.

Here are some places you can sell crocheted items/patterns:

1. Local events – I love these events because you can connect with other small businesses. 

2. Retail store – you can talk to local business owners to carry your products wholesale or on consignment.

3. Online marketplaces – we all know about Etsy and Ravelry! Ribblr is a great interactive platform for crocheters too!

4. E-commernce stores for your own website – this includes Woocommerce, Shopify, Square, etc. I recently switched to Payhip which I am really liking now. 

The most effective strategy that I have witnessed to date is good old optimization. Spending time creating optimized content is a failproof marketing plan that serves you in the long run. Search engine optimization is a big chunk to getting your crocheted products and content seen on Google and online marketplaces. 

Now you learned how to start a crochet business in 2023, it is time to get started!

Starting a crochet business can be an exciting and rewarding journey. Remember, building a successful crochet business takes time, effort, and perseverance. You are not (or maybe you will, we don’t know) become an overnight success. Good things take time and the longer you stick with it and believe in yourself, things will work out. Embrace your creativity, passion, and entrepreneurial spirit, and watch your crochet business thrive! 

Want to try out some patterns? Make sure to check out all of my beginner friendly patterns here where you can find garments, amigurumi, and accessories.

Want crochet business tips?

That’s all for now my maker friend! Remember, never miss a stitch by subscribing to my newsletter. See you next time!



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