Crochet Business Plan, With an Honest Projection

A crochet business plan has to start with an uncomfortable number: a worsted beanie takes two and a half hours, and a market pays about $35 for it. Pay those hours at $20 and the beanie loses money. So a crochet business that works is built from pieces that take fewer hours for the price buyers pay, commissions sold at their full cost, and patterns, which are designed once and sold many times. In the example below, a crochet maker in Montana sells chunky beanies and ear warmers at markets, PDF patterns online, and commissioned baby blankets, and ends its first year about $7,800 ahead on $35,700 of sales, after paying $20 an hour for about 800 hours of crocheting. Below is a description example, each part of the plan, the first year month by month, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: the pieces, the patterns, where you sell, the goals.
• Cost each piece with your hours paid; at market prices, most of a piece's price is the hours.
• Make pieces that take fewer hours for what buyers pay: chunky yarn, small pieces.
• Sell commissions at their full cost, with a deposit.
• Patterns carry the profit: designed once, sold again and again, nothing to restock.
• TaroStack keeps yarn by color and dye lot, and every piece costed from what it used. More below.

Part 1: the business description

Fiddlehead Stitch Co., a made-up crochet and knitting maker in Missoula, Montana, I use in these examples, writes:

Fiddlehead Stitch Co. crochets chunky beanies and ear warmers for markets and craft fairs, sells its own PDF patterns online, and takes commissions for baby blankets in the customer's colors.

Part 2: what each sale costs

A pattern's variable cost is only its fees; the hours of designing, testing and photographing it are spent once, before the first sale, and they're the owner's, unpaid in this plan. Every other piece is mostly hours. How to put hours into a price for anything handmade is in how to price handmade items.

Part 3: customers and prices

The chunky beanie pays the hour and little more: $35 leaves $2.40 after $20 for the hour. A worsted beanie at the same price, two and a half hours, would lose about $26. The ear warmer does better, half an hour for $22. At full speed the patterns bring about $950 of the month's $1,580 of contribution, three fifths of it, without an hour of crocheting; the ear warmers about $380, the beanies about $140 and the blankets about $100. The pieces pay the maker's wage; the patterns pay the business. Pricing for shops that resell is in how to price handmade items for wholesale, but at these hours, wholesale rarely works.

Part 4: the first year, month by month

Fixed costs are $245 a month: market fees ($120), the pattern shop and website ($30), insurance ($20), photos and marketing ($40), and software and card fees ($35). Sales start at 15% of full speed and reach it in month 11:

The year's sales are $35,723 and the profit $7,800, on top of about 118 hours a month at full speed paid at $20, about 800 hours and $16,000 in the year. That's the honest shape of a crochet business: most of the money is the maker's wage, and the profit grows with the patterns, which can sell on a day nobody crochets at all.

Part 5: the startup budget

At $7,800 a year, the $1,580 spent before working cash is earned back by month 7. How many beanies to make before a craft fair is in how much inventory for a craft fair.

Get the template

Download the crochet business plan workbook. Four sheets: your pieces, patterns and commissions with price, variable cost and a month's volume at full speed; the first year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Yarn in thirty colors, each skein from a dye lot, a blanket commission that needs six skeins of one lot, beanies made ahead for a fair, and a stash that has to be counted before the next yarn order. A notebook can't say how many skeins of the moss green are left from lot 2207, whether there's enough of one lot for a blanket, or what a beanie costs now that the chunky yarn went up.

How TaroStack does it

TaroStack keeps yarn by color and dye lot, and every piece costed from what it used.

Yarn by dye lot. Each color is an item, and each dye lot a lot, so the skeins left from lot 2207 are a number, and a blanket commission is promised from one lot. How lot tracking works is in what is lot tracking.

Pieces as recipes. A beanie is a recipe of its yarn, tag and label; making a batch of them takes the yarn off stock at what it cost, with the minutes it took, so each beanie's cost is what it used.

Reorder before the fair. Yarn comes up on a reorder list in days of cover, and the price creep report shows when a supplier's chunky yarn went up, so the $35 beanie is checked against this month's cost.

Counting, lots, recipes and reorder lists are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

Is a crochet business profitable?

Modestly, with the hours paid. In the example, a crochet maker ends the first year about $7,800 ahead on $35,700 of sales, after paying $20 an hour for about 800 hours, and three fifths of the contribution comes from PDF patterns.

Can you make money selling crochet?

Yes, if the pieces take few hours for what buyers pay, commissions are priced at full cost, and patterns sell alongside. A worsted beanie at a market price of $35 loses money once its two and a half hours are paid.

How much does it cost to start a crochet business?

In the example, $2,080: hooks and tools, first yarn, tags, a market display, a tent and table, pattern testing and photos, a website, and $500 of working cash.

Is selling crochet patterns profitable?

In the example, a $7 pattern leaves $6.30 after fees, and 150 sales a month bring more than all the finished pieces together, because the hours were spent once, before the first sale.