How to Start a Yarn Store
Also called a “knitting store,” a yarn store sells supplies related to the knitting craft. Normally, they sell yarn balls, crochet hooks, knitting needles, patterns, knitting accessories, and crocheting accessories. Yarn stores can sometimes supply other crafts, giving buyers the materials they need for a number of hobbies.
Learn how to start your own Yarn Store and whether it is the right fit for you.
Ready to form your LLC? Check out the Top LLC Formation Services .
Start a yarn store by following these 10 steps:
- Plan your Yarn Store
- Form your Yarn Store into a Legal Entity
- Register your Yarn Store for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Yarn Store
- Get the Necessary Permits & Licenses for your Yarn Store
- Get Yarn Store Insurance
- Define your Yarn Store Brand
- Create your Yarn Store Website
- Set up your Business Phone System
We have put together this simple guide to starting your yarn store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas .
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
What will you name your business?
- What are the startup and ongoing costs?
- Who is your target market?
How much can you charge customers?
Luckily we have done a lot of this research for you.
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Yarn Store Name Generator
If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name , we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability .
It's very important to secure your domain name before someone else does.
Want some help naming your yarn store?
Business name generator, what are the costs involved in opening a yarn store.
A yarn store costs about $20,000 to start. This price includes the store’s products, rent, utilities, account services, insurance, shop equipment, social media services, website services, and beginning employees. While $20,000 seems like a lot for a small shop, it will greatly contribute to your store’s marketing. As a local hobby supply store, you’ll need to gain as many customers as possible.
What are the ongoing expenses for a yarn store?
Ongoing expenses are relatively small. Expect to pay about $1 for a yarn skein. Monthly rent is about $2,000 for a small shop. Expect to pay $200 in utilities per month, and expect to pay employees between $8 and $10 per hour of work.
Who is the target market?
A yarn store’s return customers are crafting enthusiasts. The best customers are those who know what they’re looking for. A yarn store retains customers when those customers become part of a store’s “community.” Like small game shops and cafes, yarn stores succeed with the help of community efforts. It isn’t rare to see groups of knitting enthusiasts spend time in a yarn store. These customers will be your most lucrative customers, and they should be prioritized.
How does a yarn store make money?
A yarn store makes money by selling knitting supplies. They can also sell knitting books, guides, and other informative materials. Some yarn stores sell knitting enthusiast gifts, like mugs and t-shirts.
Yarn store owners can make money by growing a community. These communities can be charged for lessons, workshops, events, food, and trips. Yarn stores can also partner with nearby businesses, gaining community insight while striking deals.
One ball of yarn can be sold at about $3. 100-percent wool yarn skeins, meanwhile, can be charged at about $5. Other supplies, like books, can be sold for between $5 and $20. Keep the prices cheap. Yarn store shoppers will flock to whichever shop has the lowest prices.
How much profit can a yarn store make?
A small yarn supply store owner can expect to make about $25k to $30k per year. A successful shop owner can, however, make a six-figure salary. The success depends on the local economy, community involvement and the store’s product options.
How can you make your business more profitable?
Become as involved with the community as possible. Successful yarn stores don’t only offer products -- they offer experiences . Even a beginning yarn shop should engage its community as much as possible. Talk to local guilds, and host giveaways and trade-ins. Treat customers like family, and make sure every transaction is backed up by trust and a commitment to community.
Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!
STEP 2: Form a legal entity
The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your yarn store is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Have a Professional Service Form your LLC for You
Two such reliable services:
You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history , which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a yarn store. Learn more about licensing requirements in your state by visiting the SBA's reference to state licenses and permits .
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .
Certificate of Occupancy
A yarn store is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location :
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a yarn store.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location :
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your yarn store will be in compliance and able to obtain a CO.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
FInd out what types of insurance your Yarn Store needs and how much it will cost you by reading our guide Business Insurance for Yarn Store.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.
Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a yarn store
Offer “swap days.” You can market your shop while saving money this way. On swap days, knitters bring in unused yarn, swapping it with other community knitters. The best way to promote your shop is through community events. Because knitting is a hobby, big community involvements can boost store attendance.
As for marketing, you should promote via social media. Facebook, Instagram, and even Twitter are great options. These websites can inform customers of your deals, and they can boost your store’s activity during most hours. Take advantage of special events and holidays. Host “sit ‘n knit” events during sporting events. Also, take part in the World Wide Knit in Public Day. Host special classes, and team up with your area’s local artisans. Host money-saving classes, and connect with the area’s artists, too.
How to keep customers coming back
You’ll attract customers by creating unforgettable events. A knitting supply store might be a go-to craft supply resource, but customers will stay for the environment. Be welcoming, and give customers a reason to hang out inside your shop.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business .
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .
Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
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Is this Business Right For You?
A yarn store should be owned by someone who truly enjoys knitting. Good yarn store owners like supplying knitting supplies at low prices. They also enjoy spreading the knitting craft with others. Normally, yarn store owners host retreats, giveaways, and fun activities for customers.
Yarn store owners should be people-oriented. They need to connect with customers, focus on developing relationships, and enjoy ongoing knitting projects.
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What happens during a typical day at a yarn store?
A yarn store owner needs to stock the supplies needed by knitters. They also need to supply different project outlines, yarn designs, and other tools.
Yarn store owners normally host workshops, too. Others may create guilds or enthusiast groups. Normally, these groups promote a sense of community while boosting store sales. Knitting projects take time to complete, but customers can finish them quickly if a yarn store owner is a good teacher.
From an administrative standpoint, a yarn store owner needs to supply the store’s goods, conduct maintenance, pay the bills, market, and manage workers. Customers need to be pleased, and any guilds need to be taken care of.
What are some skills and experiences that will help you build a successful yarn store?
A successful yarn store owner needs to understand the craft deeply. By understanding the craft, a store owner can attract new buyers, build up its current customer-base, and save money. As with any craft, customers will be attracted to whichever store offers the cheapest, most diverse product options.
What is the growth potential for a yarn store?
Any hobby supply store needs to balance self-sufficiency with growth potential. Because they’re often hole-in-the-wall type stores, they rely on local support to thrive. Larger yarn stores may want to expand their services. By offering general crafting supplies, a growing yarn store can compete in the national market.
For most yarn stores, however, becoming a go-to local choice is normally a goal. Unfortunately, a lot of local yarn store owners are forced out of business. To grow effectively, a yarn store owner needs to appeal to local communities while also having competitive prices. A good marketing strategy goes a long way.
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Take the Next Step
Find a business mentor.
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a yarn store?
Prepare for local economy changes. Niche retail stores, like yarn supply stores, can face trouble if they’re unprepared. Build up savings fast, and escalate your shop’s appeal. Once you’ve covered the basic supplies, expand. Start a knitting guild, and give customers a reason to return. Form relationships with current buyers, and try to save money while growing your shop.
Host giveaways, fun activities, and retreats. These activities don’t cost too much money, and you can gain money by attracting new customers.
How and when to build a team
You should hire at least two employees when you open your shop. Employees should be sourced from local guilds, craft enthusiast groups, and hobby-lovers. Successful yarn shops are run by those who deeply understand the craft.
- The Knitting Guild Association
- Craft Yarn Council
Real World Examples
- Ann Arbor business
- NYC business
- Profile on a successful business
- Yarn Shop Survival Guide
Have a Question? Leave a Comment!
Beginning Inventory for Opening a Yarn Shop
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How to Buy Clothing to Start a Secondhand Store
About being an owner of a shoe store, starting a needlework retail business.
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When you start a yarn shop, you may be tempted to carry as many varieties and colors of yarn as possible. You'll also need to carry a variety of supplies. However, carrying too much inventory can place a financial burden on your yarn shop. Target your purchases toward your potential customers and the voids in the marketplace in your region. With careful planning, you can carry enough yarn and supplies to attract customers without spending too much of your capital or creating excessive debt.
Survey the Competition
Before ordering yarn or supplies, visit your local competition. Don't look for what other stores carry as much as look at what they don't carry. Find a niche in your marketplace. Listen to customers and notice what they wish they could find. If you can discover an area of needlecrafts that local stores don't provide, for example, focus your beginning inventory on that area.
Sit in Your Customer’s Chair
Think about the customers you want to attract. Create a profile of your typical customer in terms of age, interests, income and what she will want from a yarn store. You shouldn't carry yarns your customer won't want just to appear to be a full-fledged yarn store. Don't be afraid to specialize. Specializing can save you money on inventory.
Patterns and Projects
Start your inventory ordering with patterns. You must carry patterns for projects that your customers will be interested in making. For example, if you have determined that your typical customer will be interested in clothing rather than doilies, focus on sweater and skirt patterns, along with accessories such as scarves. Order two to three patterns in each category of projects you expect your customers to be interested in.
Yarn comes in batches or lots. Skeins from the same lot have a tendency to match in color. Skeins from different lots can show color variations that will be noticeable in customer projects. Examine your patterns and determine an average number of skeins that customers will need to make those patterns. Order enough yarn to make every pattern you carry. Using your patterns as a guide will also tell you what type of yarn to order, from wool to acrylic.
Establish Relationships for Special Orders
Ask your yarn suppliers about their turnaround time for special orders. To avoid carrying too much inventory in the beginning, offer your customers special orders. If you can get the yarn they want in a day or two, you will satisfy your customer and be able to pay for the extra yarn out of the customer's advance payment on the order.
Track Purchasing Patterns
Keep track of special orders and in-store purchases to determine what customers are buying. Base future inventory orders on this knowledge. As your customer base stabilizes, you will know what to carry.
Carry the knitting needles your patterns call for. If you want to carry some specialty needles that your competition doesn't offer, limit your purchase to one or two of each type. Many of your customers will already have needles, so make this the smallest expenditure in your inventory budget.
Set a Percentage Limit
You will have many expenses to pay as a start-up yarn shop and you may not have enough sales for one or two months to pay those expenses. Keep some of your cash for future expenses. Limit your inventory dollar amount to 50 percent of your cash while you build a customer base. This will give you a fund to draw on to pay the rent and utilities as you grow your business.
- startupbizhub.com: Starting a Yarn Shop
- Gaebler.com: Opening a Yarn Shop
- The National Needlarts Association: TNNA Business Education
- The Knitting Guild Association: About TKGA
Kevin Johnston writes for Ameriprise Financial, the Rutgers University MBA Program and Evan Carmichael. He has written about business, marketing, finance, sales and investing for publications such as "The New York Daily News," "Business Age" and "Nation's Business." He is an instructional designer with credits for companies such as ADP, Standard and Poor's and Bank of America.
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Yarn Shop Business Plan Template
Explore Options to Get a Business Plan.
Are you interested in starting your own yarn shop Business?
Licenses and permits, financing options, staffing needs, inventory management, marketing strategies, financial forecasting, resources and networking.
Why write a business plan?
- Business Plans can help to articulate and flesh out the business’s goals and objectives. This can be beneficial not only for the business owner, but also for potential investors or partners
- Business Plans can serve as a roadmap for the business, helping to keep it on track and on target. This is especially important for businesses that are growing and evolving, as it can be easy to get sidetracked without a clear plan in place.
- Business plans can be a valuable tool for communicating the business’s vision to employees, customers, and other key stakeholders.
- Business plans are one of the most affordable and straightforward ways of ensuring your business is successful.
- Business plans allow you to understand your competition better to critically analyze your unique business proposition and differentiate yourself from the market.
- Business Plans allow you to better understand your customer. Conducting a customer analysis is essential to create better products and services and market more effectively.
- Business Plans allow you to determine the financial needs of the business leading to a better understanding of how much capital is needed to start the business and how much fundraising is needed.
- Business Plans allow you to put your business model in words and analyze it further to improve revenues or fill the holes in your strategy.
- Business plans allow you to attract investors and partners into the business as they can read an explanation about the business.
- Business plans allow you to position your brand by understanding your company’s role in the marketplace.
- Business Plans allow you to uncover new opportunities by undergoing the process of brainstorming while drafting your business plan which allows you to see your business in a new light. This allows you to come up with new ideas for products/services, business and marketing strategies.
- Business Plans allow you to access the growth and success of your business by comparing actual operational results versus the forecasts and assumptions in your business plan. This allows you to update your business plan to a business growth plan and ensure the long-term success and survival of your business.
Business Plan Content
- Executive Summary
- Company Overview
- Industry Analysis
- Consumer Analysis
- Competitor Analysis & Advantages
- Marketing Strategies & Plan
- Plan of Action
- Management Team
The financial forecast template is an extensive Microsoft Excel sheet with Sheets on Required Start-up Capital, Salary & Wage Plans, 5-year Income Statement, 5-year Cash-Flow Statement, 5-Year Balance Sheet, 5-Year Financial Highlights and other accounting statements that would cost in excess of £1000 if obtained by an accountant.
The financial forecast has been excluded from the business plan template. If you’d like to receive the financial forecast template for your start-up, please contact us at [email protected] . Our consultants will be happy to discuss your business plan and provide you with the financial forecast template to accompany your business plan.
Instructions for the Business Plan Template
To complete your perfect yarn shop business plan, fill out the form below and download our yarn shop business plan template. The template is a word document that can be edited to include information about your yarn shop business. The document contains instructions to complete the business plan and will go over all sections of the plan. Instructions are given in the document in red font and some tips are also included in blue font. The free template includes all sections excluding the financial forecast. If you need any additional help with drafting your business plan from our business plan template, please set up a complimentary 30-minute consultation with one of our consultants.
Ongoing Business Planning
Want a bespoke business plan for your yarn shop business, our expertise.
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Yarn Store Small Business Idea and Business Plan
Starting your own small business in the UK isn’t easy but having a properly developed business plan will help you achieve success.
To start a Yarn Store business in the UK, take the time and explain the idea via a business plan.
Understanding all of the aspects of the business idea will be the key to getting the Yarn Store business running like a well-oiled machine. The business plan you develop will help you organize the elements needed into a strategy that you can actually use to startup, by paving a clear road map as to what you need to follow for the lifespan of your business.
Starting a Yarn Store business isn’t easy, but when done right, it can lead to a lot of success.
To help you get started, you can use the free business plan builder tool to develop your own Yarn Store business plan.
The business plan template is very easy to use, is interactive and will quickly and easily help you create your business plan just by answering the needed questions about your small business idea.
Create your own Yarn Store business plan for free using the Business Plan Builder
The free business plan template builder is divided into a few easy to follow steps.
The free business plan builder template is provided by UKStartups.org to help you develop your own business plan. For step by step guidance, see the 5 steps below.
Once completed, the result will be a clean, professional plan that will help you start your own Yarn Store small business in the UK.
When you have completed your Yarn Store business plan, the next step will be to find available funding that will help, or to speak with a funding adviser who will assist you each step of the way to securing the needed funds to make your Yarn Store business startup.
If you are looking to limit your startup costs when starting up a Yarn Store small business in the UK, this free business plan builder tool will be it.
Starting a Yarn Store business is only one of the ways others have used this free business plan tool. There are hundreds of different ideas you can start, and if you need guidance, do reach out to a UKStartups expert to get the needed assistance and guidance.
Step 1. Your business information
To develop a proper Yarn Store business plan with the free business plan builder template, it is important to answer each of the questions about your business to the best of your abilities.
What is your business? What are the products/services you provide? Who are your customers? What are your goals…etc?
Having a clear explanation will help you create a in-depth business plan that you can actually use to start the Yarn Store business and to apply for needed funding to cover your startup costs.
Step 2. Projecting your revenues/income
The Yarn Store industry can have great results. Planning and projecting the financial figures to approximate what you will make each year is crucial to building a strong business plan.
What do you think your business will make from each of its products/services? Simply list your products/services, enter the appropriate financial figures (costs and expenses).
If you don’t have the figures, in many cases it is recommended to do a a bit more research on other Yarn Store businesses locally and within your own region to get an idea of potential revenue. You can do your best to estimate the figures and growth potential.
If you need assistance in projecting, you can always contact UK Startups funding experts for the help.
Step 3. Your business market
As a Yarn Store business, having a clear explanation of the market and industry that you are in will help you plan for the figure and will ensure you can take the business to the next level.
Explain your location of business, share specifics about your customers, showcase your competition and explain the advantages you have over your competition.
Step 4. The future plan
Starting your own Yarn Store business and getting it off the ground is important to you.
No matter if you’re planning on applying for government funding for your Yarn Store business or not, it is important to plan out the future and provide an explanation of how you will grow the business. This means explaining your marketing plan, your sales strategy and clearly outlining a growth plan for the next few years.
Be sure to break this down step by step to show how you intend on making sure your Yarn Store business can grow each year.
Keep in mind that often business plans are focused on key people. Be sure to discuss yourself, your role and any other key figures in the business as well.
Step 5. The financials
In the end, it all comes down to the financials. If you are seeking funding, or not – the business plan you develop needs to have clearly defined financials or projections. The business plan builder tool makes it easy to develop your financial charts by simply entering your expected revenues per month and year. If you don’t have the figures as it’s a new business be sure to project the figures based on your expectations. If you need help with this, ask the UK Startups experts .
A clear breakdown of your funding needs is also recommended in case you are seeking funding and this free business plan template will help you with exactly that. When developing your Yarn Store business plan using this free template, the above 5 steps are recommended in order to succeed. While there are other key points that will assist you in starting your business, finding funding...etc, the free template will help put you on the right path
Be sure to request a professional to review your business plan , to answer any questions you may have and to help you with the funding search once you’ve done the initial free template. You can request this directly via UKStartups.org and through the Small Business Startup Platform as a member.
If starting a Yarn Store business is just one of your ideas, perhaps considering other options, here are some popular small business’s others have chosen to startup
- English Language School
- Fondue Restaurant
- Building Materials Supplier
- Boat Repair Shop
- Plating Service
Yarn Shop Business Plan Template & Guidebook
Starting a yarn shop can be a lucrative and rewarding business venture, but it's important to have the right plan in place to ensure success. The #1 Yarn Shop Business Plan Template & Guidebook gives you everything you need to develop a comprehensive and effective plan for your store. From start-up costs and location requirements, to sales forecasting and marketing strategies, this guidebook covers all the key elements of creating a successful yarn shop business plan.
Get worry-free services and support to launch your business starting at $0 plus state fees.
- How to Start a Profitable Yarn Shop Business [11+ Steps]
How to Write a Yarn Shop Business Plan in 7 Steps:
1. describe the purpose of your yarn shop business..
The first step to writing your business plan is to describe the purpose of your yarn shop business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.
It also helps to include a vision statement so that readers can understand what type of company you want to build.
Here is an example of a purpose mission statement for a yarn shop business:
The mission of the Yarn Shop is to provide an inclusive and welcoming environment for all customers looking to further their creativity through yarn arts. We strive to make the crafting experience enjoyable and rewarding, while providing the supplies and education necessary to succeed in any project. We also seek to enrich our community through our unique products, classes, and events.
2. Products & Services Offered by Your Yarn Shop Business.
The next step is to outline your products and services for your yarn shop business.
When you think about the products and services that you offer, it's helpful to ask yourself the following questions:
- What is my business?
- What are the products and/or services that I offer?
- Why am I offering these particular products and/or services?
- How do I differentiate myself from competitors with similar offerings?
- How will I market my products and services?
You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.
3. Build a Creative Marketing Stratgey.
If you don't have a marketing plan for your yarn shop business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals.
A good marketing plan for your yarn shop business includes the following elements:
- Who is your target market?
- What do these customers have in common?
- How many of them are there?
- How can you best reach them with your message or product?
- Who are your current customers?
- Where did they come from (i.e., referrals)?
- How can their experience with your yarn shop business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?
Product or service description
- How does it work, what features does it have, and what are its benefits?
- Can anyone use this product or service regardless of age or gender?
- Can anyone visually see themselves using this product or service?
- How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?
- Which companies are competing with yours today (and why)?
- Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
- What specific advantages does each competitor offer over yours currently?
- Which marketing channel do you intend to leverage to attract new customers?
- What is your estimated marketing budget needed?
- What is the projected cost to acquire a new customer?
- How many of your customers do you instead will return?
Form an LLC in your state!
4. Write Your Operational Plan.
Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations.
In it, you should list:
- The equipment and facilities needed
- Who will be involved in the business (employees, contractors)
- Financial requirements for each step
- Milestones & KPIs
- Location of your business
- Zoning & permits required for the business
What equipment, supplies, or permits are needed to run a yarn shop business?
In order to run a yarn shop business, you will need the following items:
- Yarn, needles, hooks, and other craft supplies
- Records for tracking customers, orders, and inventory
- Computers for running the business (including software for point of sale systems, accounting, and inventory management)
- Cash register or other point of sale system
- Furniture, shelving, and display racks for organizing supplies
- Security systems such as CCTV cameras and alarms
- Business license (may vary depending on location)
5. Management & Organization of Your Yarn Shop Business.
The second part of your yarn shop business plan is to develop a management and organization section.
This section will cover all of the following:
- How many employees you need in order to run your yarn shop business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
- The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
- How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!
6. Yarn Shop Business Startup Expenses & Captial Needed.
This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.
Typically, expenses for your business can be broken into a few basic categories:
Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a yarn shop business varies based on many different variables, but below are a few different types of startup costs for a yarn shop business.
Running & Operating Costs
Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.
Marketing & Sales Expenses
You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your yarn shop business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.
7. Financial Plan & Projections
A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your yarn shop business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses.
Here are some steps you can follow to devise a financial plan for your yarn shop business plan:
- Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
- Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
- Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
- Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
- Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
- Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.
Frequently Asked Questions About Yarn Shop Business Plans:
Why do you need a business plan for a yarn shop business.
A business plan for a yarn shop business is essential to help you determine the cost of starting and running your business, develop goals and objectives, identify your target market, analyze the competition, and create a marketing strategy. It also serves as an important tool to help you secure funding from investors or lenders.
Who should you ask for help with your yarn shop business plan?
You should ask a business consultant, accountant, or lawyer for help with your yarn shop business plan. Additionally, you could look online for resources and templates that could help you in creating your business plan.
Can you write a yarn shop business plan yourself?
Yes, it is possible to write a yarn shop business plan yourself. However, it is important to make sure that the plan is comprehensive and covers all aspects of the business. It should include sections on the goals and objectives of the business, the target market, marketing strategy, financial projections, and operational plan. A professional consultant or advisor may also be able to provide assistance in writing a comprehensive and effective business plan.
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I'm Nick, co-founder of newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. As a small business owner with over five years of experience, I have garnered valuable knowledge and insights across a diverse range of industries. My passion for entrepreneurship drives me to share my expertise with aspiring entrepreneurs, empowering them to turn their business dreams into reality.
Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.
From assessing market viability and formulating business plans to selecting the right technology and navigating the financial landscape, I am dedicated to helping fellow entrepreneurs overcome challenges and unlock their full potential. As a steadfast advocate for small business success, my mission is to pave the way for a new generation of innovative and driven entrepreneurs who are ready to make their mark on the world.
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Sippy Cup Mom
Setting Up a Yarn Store
June 18, 2020 By Sippy Cup Mom 1 Comment
Everyone needs a hobby and nothing feels better than serving people who share the same interests as you. Opening up a yarn store is a darn good idea but it is not for the faint of heart. There are a lot of things that you need to consider, market research that you have to conduct, and a few legal stuff here and there that you need to plow through. If you are like me, in that you feel like the opening up a tidy and colorful yarn store is your calling, then look no further as I journey you through my own experience.
Make no mistake, the path towards the completion of this journey is no walk in the park. But, if there is anything that will sustain you, it will be the love of yarn and knitting. So, if your heart is not set into it, and if this is just a job to you, then turn back now. The yarn store business is cutthroat and feeble wills shall bend. With that said, let us see just how much fun you are going to look forward to.
Dreaming of a Yarn Store
During my earlier years, I was kind of an odd duck among my peers. They dreamt of curing cancer, heading multinational conglomerates or becoming president. While I was daydreaming about the years when I can just sit back and relax on my rocking chair, watching the sunset, and a pair of knitting needles in my hands. It is not that I am lazy or do not enjoy the thrills. But something about the gentle solace as I look forward to a future doing nothing that sits right with me. Knitting will shield me from the overly convoluted world and keep my mind serene is what I thought.
Nevertheless, I did have friends who share the same love for knitting but perhaps not as fervently as I do. We made each other scarves, gloves, sweaters, oven mitts, and pretty much everything else we can knit. We would sneak into our favorite corner in the library and knit the entire recess period away. We were just a group of cheeky teenagers wrecking havoc again.
As soon as I made it past the point of no return, I already had my mind set on the thing that I love. Knitting was no longer just a hobby for me and I felt that under the deluge of yarns is where my place was going to be when I grew older. The eureka moment happened during a guidance counselling session. When I was asked what I would do after I graduate, I knew I could not say knitting. I understood that a vague plan like that will not sustain me and I did not want the counsellor to break my heart by saying it is just a hobby. She would be right however but I did not need any negativity then. They said it will be bad for the yarn. As she leaned over after the usual monologue about how graduation is the start of my own epic, I knew the question that was coming. And in that moment, I just blurted out the first thought that I had. I knew it had to have knitting in there somewhere but I need to make a living out of it. So, with all the fake confidence I could muster, I challenged myself and said I wanted to open up a yarn store.
To be honest, I could not remember how the counselor reacted then, but I knew in my heart that what I said, I said in earnest. She might have been laughing or surprised that I even had a plan and sounded decisive at that. But I guess my biggest takeaway from that session was that I knew what I was lacking. I got the yarn part of the yarn store. But my knowledge on the other half, the store, was completely limited to buying from one. The selling part, not so much. So, for my bright future entangled with yarn, I knew what I must do. I needed to learn business.
The Yarn Store Business
Opening up a business is hard especially if you do not have the faintest clue on how to do it. Aside from my brief stint as lemonade stand manager in the commercial space that is the front of our lawn, I knew next to nothing. I started with gaining basic financial literacy and it really opened my eyes. At first, I was simply doing it for the love of yarn, but then later on I realized just how important it is. I kept asking myself how I was able to survive being so ignorant in this matter. Maybe they taught it in school but my head is filled with too much cottony yarn to focus.
After a long overdue crash course on how money works, then came forth the business planning. My yarn store business was going to be as fluffy as I pictured in my head, but apparently that was not enough for a business plan. I need the plan to be as clear and concise as possible but it was not going to be easy as I needed to clear my mind from the fluff.
Yarn Store Costs
If there is anything as good as yarn in the world, it would probably be money but that is just because you can buy more yarn with it. Before I can start my yarn store business I needed to amass an amount needed for starting up my business as well as keeping it running. By my estimates, I needed to get at least ten thousand dollars just to start. Tempting as it might be to spend that entire amount to buy yarn, I had to set aside money for costs to run my business. These costs include the rent, utilities, insurance and equipment. I did not think I would need staff at least in the first few months of operation.
What makes it so expensive to start up a yarn store is to fund the marketing drive. It is surprising to find out that a lot of people need convincing to start buying yarn. And to convince them to buy it from me, is a whole different matter as well. Even though it is painful, I had to accept that knitting is just a hobby for most.
I did all the tricks to get the word out about my yarn store. I opened channels on a few streaming platforms and annoyed the heck out of the members of online selling groups with my very informative videos. And to top it off, I still did traditional advertising.
August 12, 2023 at 10:32 am
Is there more text to this article? You left me hanging!! I am just weeks away from opening a brick-and-mortar yarn shop, so the story of how you started is invaluable to me. Give me more!
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Starting a Yarn Shop
- 43 comments
- 9 expert advice
- 43,656 views
There are two essential elements you need to contend with when starting your own yarn shop business: one is location, and the other is supplies.
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A yarn shop is usually something that a hobbyist establishes; this stems from a passion for a craft that suddenly branches into a successful business enterprise.
Although this is not a simple formula for business success, new business owners who show a particular passion and zeal for their products or services usually create giant steps to a business boom. Besides, this business entrepreneur will likely stick it out when it gets tricky. Yarn stores may not be exactly as mainstream as, shall we say, the athletic shop in the corner or that trendy ladies’ shoes shop in the mall. Still, craft enthusiasts and knitting hobbyists flock to these yarn shop businesses to get that colored wool yarn for that sweater or to re-supply their supplies of knitting yarn for hand-crafted projects.
If you are thinking of starting your own business selling yarn, here are two of the most essential things to consider:
- Knitting Shop Business Guide
- Steps to Start a Small Fabric Store
Location for Starting a Yarn Shop
The World Wide Web indeed plays host to a lot of great selling businesses. However, if you want to sell yarns and other craft supplies on a per-piece basis, you may not want to establish your yarn shop business over the Internet. Unless your clients are willing to shoulder a more expensive shipping and delivery cost than the actual cost of your merchandise, you are bound to lose out on a lot of profits. We recommend you do the Internet set-up if you are willing to ship bulk orders.
Finding a great location is critical to success if you are a yarn supplier entrepreneur starting a brick-and-mortar business. It would help if you found someplace that provides affordable rent, a great selling area to showcase your merchandise, and considerable foot traffic. Most of the sales for this kind of enterprise come from browsers and window-shopper-turned-shopper . For this kind of shop, you can be assured that your utility bills should be low; you would need to be creative, though, when it comes to attracting potential shoppers to go into your shop.
Suppliers for Yarn Store
What comprises the leading business resource of a knit shop? It’s the supplies, of course. You may want to get a list of suppliers for the different kinds of yarns that are currently in demand. Since your merchandise is not easily degradable, you can order in bulk and store them safely in your shop. There are trends you should keep an eye on, though. There are seasons when one particular yarn would get more sales, and you may even have to contend with advance orders (i.e., Cornish Organic Wool, Dyed Devon Alpaca, Polyester Yarn.)
Other supplies you may want to stock up on are our beads, flosses, instructional books, interlock knit ribbings, knitting needles, patterns, ribbons, sewing fabrics, threads, unique buttons, etc. The acquisition of more extensive materials like looms depends on your arrangement with your clients and suppliers.
- Judith Rudnick said on October 21, 2009 How would one go about selling an already established, successful yarn shop?
- lisa nemchek said on May 21, 2011 I would like to start a yarn store in Stamford. There is not one yarn store, just a Michaels that sells crafts including yarn. I was thinking of purchasing a two family house, renting the upstairs apt and using the downstairs apt for a store. How do I write a business plan and approx how much $ would I need for start up? Thank you
- fifi scarato said on July 7, 2011 I have a dream to open a yarn store in Fenton, Mo. I would like to franchise a yarn shop and possibly combine it with my idea of a tea and coffee shop. Please contact me if interested or if you have any one that would be interested. I retired from teaching this year and want to pursue my dream of a owning a beautiful shop for ladies to laugh, love and enjoy time together! Thank you, Fifi 314-471-7781
- dee said on October 12, 2011 who is the best to go to buy knitting needles plus yarn for my shop thank you .
- Debbie Henderson said on October 22, 2011 Fifi, I'm with you. I just retired from teaching and I want a quilt/knitting/embroidery shop in Central NY. I would like to know how much I should plan on for my initial inventory. If anyone would share I would appreciate that!
@debbiehenderson, pl mail to me for terms for our clients [email protected]
- Debra Schmidt said on October 31, 2011 I would like to open a yarn store in Saranac Lake, NY. The closest place to buy yarn is an hour away at a Michaels. I am interested in know how much money should I plan for my start up inventory.
- LindaB said on January 12, 2012 Like Debbie Henderson, I am also a resident of Central NY who is semi-retired and thinking seriously about establishing a yarn shop. Debbie, have you gotten any further information?
- Nabin Shrestha said on February 3, 2012 I would like to open a yarn store in Kathmandu, Nepal. i would like to export in foreign country. would u like to buy ours yarn. if yes then please reply.
- diane wimberley said on September 23, 2012 I, too, am interested in starting a yarn shop in northeast arkansas. The only place to purchase yarn is Wal'Mart. My dream is a shop with yarns of various quality and prices, perhaps offering yarns spun by women´s coop´s worldwide as well as the synthetic and more economic yarns. I would love for the shop to evolve to a woman´s gathering spot and safe space for friendship, support, etc. How much stock should I plan on purchasing?
- Shelly Downes said on December 12, 2012 I am in Southern California and am planning to start a yarn shop with a coffee bar, as a retirement project. My question is, how much money should I plan to have for beginning inventory?
- Daphne Morrison said on December 31, 2012 I want my own yarn shop so I can make beautiful things to put on the shelf. I need the funding to get started.
- jes said on February 12, 2013 There are a few choices as far as yarn in my area, but nothing with a broad range of price (you either go to a chain, or to a specialty shop that is far too expensive and out of the way) and nothing within the walking area that is Midtown Sacramento. I'd like to take my knitting circle out of a cafe and into a Midtown shop with reasonably priced but interesting fibers. A place with classes and a comfortable atmosphere.
- nic said on January 24, 2014 i want to start yarn shop in haryna.how much money i need to start.
- ALEXANDRIA said on April 6, 2014 SAME HERE, I WOULD ACTUALLY LIKE TO START MINE IN SAN DIEGO, CA. I AS WELL WOULD LIKE TO KNOW OW MUCH I WOULD NEED TO START THIS JOURNEY.
- karen billideau said on May 8, 2014 i am wondering if there's a company that allows you to sell yarn thru "home parties" like tupperware used to be. anyone know?
- joseph said on May 27, 2014 I want to start tea distributor business tell me the formality for that
- kathy said on June 22, 2014 I have started a small yarn and fabric shop. I also have ribbons. I have a hard time find wholesale yarns. Where is the best place to help me build my inventory?
- Alison said on July 18, 2014 I have been thinking about starting a mobile yarn/knitting/crochet shop but have no idea how to begin planning this.
- Lorry said on August 5, 2014 I would like to start a yarn shop in walla walla Washington. Would like to know startup cost and funding options plus where to find wholesale yarn. thank you
- Sekai said on November 28, 2014 Me too I'd also like to start a yarn shop in Harare. I want to know start up costs and help with a business plan and wholesale suppliers of yarn. Thank you.
- elizabet said on January 14, 2015 Hi! I am very much interested to start a yarn shop here in the Philippines. I needed help on how to start, start up cost and suppliers. Thank you
- Jeri Hansen said on June 6, 2015 I live in Key Largo Fla. The closest yarn shop is an hour a way. There is nothing for women to do in Key Largo area. I thought of yarn, various supplies a coffee bar. Knitting classes or groups to meet other women and share ideas. I have no income at the moment, so I would need help with financing also. Dreams are possible. Anyone interested please contact me. Starting small with growth opportunities. Thank You
- Jeri Hansen said on June 6, 2015 Key Largo Fla 33037. 90 miles no of Key West. First key going south on US1
- Jeri Hansen said on June 6, 2015 Key Largo Fla 33037. First key after the stretch road from Fla City Fla Approx MM 97.5 Prefer a close area for the shop. Thank you considering my idea
- alaguraja said on June 13, 2015 i want to start yarn trading and marketing business in tamilnadu. i needed help on how to start this plan and i want to know start up cost and business plan
- Regina Napolitano said on July 21, 2015 Levittown, NY. I wish to open a cozy yarn & stitchery shop & café. Instead of my stock being the pricey yarn, I'd rather mix it up. I want to use only Long Island-based yarn suppliers to help their growth, and to boost the local economy, and I want to tap into Red Heart, Lion Brand, Caron, Yarnspirations, Premier, plus the best selection of stitchery they can afford to buy. I am looking for a 1,000-1500 sqft space. I am 46 years old, got steady job that I hate (school bus driver), certified to teach crochet, no kids, and a loving husband that only wants me to be happy. I want a shop close to home I can walk to or bike to. And I can bring my little dog to hang out. I like the late hours, too. People can drop by after work to shop, or to hang out, have a hot cup of coffee and a snack. I have a basic business plan, and I guess I need to contact an SBA office for a consult, and to find out if I am eligible for a loan? Help? I personally don't have a lot of $, but my credit's good...
[email protected] || Consultant
- Giselle said on October 21, 2015 I live in Kuala Lumpur,Malaysia.I would like to open up a yarn shop to help my communities to find a place to stop by and find their interest to involve it.Basically the most important that there is a place for them to spend with it.
- Michelle said on October 26, 2015 How do you go about finding all the companies that sell supplies for a knit shop. Is there a mart like for clothing and furniture? Thanks, Michelle
- Susan said on December 2, 2015 How would I go about opening an online-only yarn shop as far as becoming a distributor and delivering the yarn? I notice that many yarn makers require a brick-and-mortar store, and they do not drop ship. Can you give me any advice in this area? I know how to set up a website with ecommerce capabilities. I just don't have a clear idea of how to establish distributor relationships and manage inventory. Thank you!
- Lisa Goins said on July 10, 2016 I live in Florida, and would like to open a small shop. Don't really know where to start, but the types, and amounts of yarn to carry is where I want to start. Also how do I go about finding out if the name I want to use is not already inc? Will I have to have a shop to order bulk yarn and supplies? My contact info if anyone in south Florida is also interested in a knit cafe start up. [email protected]
@Susan, It's unlikely that you'll be a distributor of any of the popular brands without a track record and at least 1Mil to invest. But I don't think that's what you mean, right?
Opening an online-only yarn shop takes a serious investment in time and money - almost as much as opening a brick and mortar store - plus, you'll need to be prepared for the inevitable push-back from well intentioned yarn distributors that think that not selling to you will somehow keep the small brick and mortar stores alive.
Identify the yarn brands you are interested in selling. Do a bit of research (ravelry.com is pretty handy for this), find the yarn brand contact info and contact them. Tell them you are starting an online-only yarn store and wish to get their wholesale information. Make sure to ask for their minimum amount and any selling restrictions (as far as sales or discounts) up front. Based on their reply, decide if you are still interested in carrying that yarn line.
Make a list of the yarn brands, then styles, then colors and how much this will cost you wholesale. You can check my previous reply (#29) for a baseline of how much to spend. Then research web hosting and selling platforms - you'll need a budget for web development, graphics, business cards, packing supplies, etc. so make sure you account for all of the things you'll need outside of the actual yarn supplies.
Get your resale certificate and business name and domain name and apply for those yarn brands you've previously singled out. Then call or web order the yarns you want using your new wholesale account credentials - remember that most of the time you'll also need to pay to ship they yarn to you.
As far as inventory? That's pretty much up to you although my caution is to go easy when starting out - there's nothing worse than falling in love with a beautiful yarn, buying a ton of it, and finding you're the only person that likes it. Clearance sales in your first year of business are not good.
Most yarn comes in bags of 10 skeins and most wholesale pricing is roughly half the regular retail pricing. So if a yarn sells for $12/skein you can expect that a bag of ten costs $60. Double wholesale is a convention that most fabric and yarn retailers adhere to because it makes your life easy - no one wants to count in shipping, utilities, web hosting and divide the overhead up per skein. Doubling the wholesale amount usually covers your expenses and, with enough sales, guarantees that you'll make a profit.
@Lisa Goins, check out my answer (#35) to your questions. Feel free to reply...
- Teri said on August 15, 2016 Hi. My name is Teri, I am in Washington, DC, and I have been thinking of transitioning my online based knitting class business to a brick and mortar shop. www.knitting101.org. Knitters over the years have often asked if I would have my own knitting store. And, knowing how pricey starting up a business can be and not know how to contact yarn distributors has placed this idea and desire on the back burner. I want to partner with a coffee and or tea shop with comfy chairs and sofa with a place for crafters to come knit, socialize, ask questions and partake in coffee and tea. We currently meet at a local Starbucks, recently we were in Eastern Market, but not certain this is the best area for my company. I have a large contingent of knitting in both Virginia and Maryland as well as local DC knitters. And, I need guidance with contacting distributors. I want to focus on local yarns to sell, as well as balance my international professional experiences with a nod to international yarns such a Noro, cashmere from China, my favorite camel from Mongolia, silk from Nepal and alpaca (which can easily be found locally) along with Icelandic local yarns, and so much more. I am thinking of possibly buying a HUD house and having a yarn store downstairs. Just need guidance on where. Thank you!!
@Teri, As you've surmised, the "where" to open will be critical.No-one can advise you for your specific market but there are some general things to check. Look for a need that is going unfilled:
-Research the yarn stores that already exist.Opening up a shop specializing in Noro won't work if two blocks away is a similar shop.Also be aware that some yarn brands "regulate" the proximity of other yarn shops with their brand.
-Research yarn "deserts." Is there a median or above income neighborhood without a yarn shop? Or within easy driving distance?
-You'll need physical space foryour yarn - make sure the spot you're considering has enough space for showcasing and inventory storage.
-Your demographic will be mostly older women, over 55 with an upcoming group of millennials around 30. View the 2014 TNNA report and make sure driving distance neighborhoods have your demographic.
-Be good to your demographic. Craft Industry Alliance just published an article about how to court the millennial crafter - many younger folks complain of being ignored or not taken seriously by established knit shops. Also don't devolve into a shop with a table of knitters that are fixtures in the shop - many people feel turned off by this.
-Research pricing and brand/style. I've turned down plenty of yarns because of oversaturated discount pricing; I would just not be able to make my target price selling competitively. Figure out your basic yarns - you will need at least three, "always sell" or bread and butter yarns that you can count on. Most physical yarn shops stock Cascade 220 as one of their basics; you almost can't go wrong with this yarn.
-Make sure you have pattern support! Gorgeous, pretty yarns need a pattern to go with them. Don't overestimate your ability to create enough patterns for the unusual yarns you wish to carry. The majority of knitters will start with a pattern, then look for a yarn. Explore trunk shows or near-to-you contract knitters that can knit up sample garments. Folks need a way to visualize how the yarn will look made up.
-And then the lease - do not settle for some hard to find location, even if it seems like a great deal. You must be allowed decent, prominent, large signage; if folks drive by once or twice and don't see you they'll give up. Be careful of commercial lease terms that include a high maintenance; find out what NNN stands for. Also do not lease right next door to a fast food restaurant or one with a big grill - the smoke will contaminate your shop and yarn.
If you're buying you'll need to make sure the zoning laws allow for light commercial and signage - remember that any food service has it's own set of regulations.
-Reply #39 has some info on distributors. Know which yarns you'll be selling before you finalize your location.
-Be careful of dealing with unknown Chinese or Indian yarn sellers - someone selling cheap cashmere or silk might be too good to be true - I've gotten burned on a silk yarn purchase with about half the purchase what I ordered and half some really shabby yarn.Also make sure you understand customs/import duties and ship charges- these can be quite high.With a new seller see if they'll work through an escrow account so you can be sure of the quality before releasing money.
- Rozee said on August 23, 2016 I'm in Cape Town, South Afica and interested in starting a yarn shop. I want to cater to the needs of low income previously disadvantaged individuals of all ages. We have a desperate need to improve the employability status of our community. I believe a woolshop could help. Offer group gatherings daily for teens to pensioners. Quality yarn at affordable prices and knit/crochet lessons. Yarns I'm interested in are Charity, Budget, Lollipop, Zigzag, Pullskein and Elle stretch (for socks)from Wolmart Afrika, Pretoria (prices are the best at present). The store has to be spacious and close to local shops and schools. Sourcing unsold/redundant stock from our larger stores might also be an option. Knitting/Crocheting for charity would also be an offering at the store. It might turn out to be more of a "not for profit" store, but I would be happy in retirement.
- Anna said on August 25, 2016 I live in New York City and I'm interested in started an online yarn shop. Starting small with some hand dyed yarns under my own brand name. I've done some basic research but am having some difficulty. I am trying to locate yarn mills that are relatively close and who are willing to sell wholesale and if possible be able to hand dye to specifications. Any suggestions would be appreciated!
@Anna, You're so optimistic! Yarn mills, plural.
There is a single large "base" yarn distributor in the US. They havethe yarn milled locally and outside the US. If you find other base yarn distributors they are either buying from China in quantity or reselling from Henry's.
Call Henry's Attic, 845-783-3930, ask them to send you samples, email a price list and minimums.
Your best bet for starting out will be to dye your own. You can inquire with Henry's to see if they dye (they have the capability, they are the company behind Galler Yarns) but almost all hand dyers start with some of Henry's base yarns and go from there.
If you decide to try a Chinese manufacturer make sure to get references!
- Debbie Crump said on September 30, 2016 Hello, I'm interested in starting my own yarn and thread shop. Not sure how or where to get started. I live I. Austin, MN home of the the very famous Spam Museum. But I love working with yarn I do a lot of loom knitting. I'm open for some suggestions. Thank You.
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How To Start A Yarn Shop
- Last Updated: November 1, 2023
- By: Greg Bouhl
Opening a yarn shop can be a rewarding way to share your passion for knitting and crocheting with others in your community. With some planning and dedication, you can turn your love for yarn into a successful small business. This guide will provide an overview of the yarn shop industry and outline the key steps you need to take to get your shop up and running.
A yarn shop is a retail business that specializes in selling yarn, needles, patterns, and other knitting and crocheting supplies. As the owner, you will need to make decisions about your product selection, store layout, pricing, and marketing.
A yarn shop is not just a place to buy supplies; it can be a community hub for knitting and crocheting enthusiasts. Along with a variety of yarns, you’ll likely offer other knitting tools, books, and accessories. Plus, you can host workshops and knitting circles, providing an experience that online retailers can’t match.
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The crafting industry is pretty resilient, with a market size in the billions. Economic downturns can even bolster the sector as people turn to home-based activities. Yarn shops are a specialized niche within this industry and are supported by a loyal, passionate customer base. The yarn industry has seen steady growth over the past decade, fueled by a resurgence of interest in knitting and crocheting as more people discover the creativity and stress relief these crafts can provide.
This is an industry where small, independent shops can still thrive alongside big-box retailers and e-commerce giants. Why? Because your customers aren’t just buying yarn; they’re buying an experience and a community. Many knitters and crocheters still enjoy selecting materials in person and benefiting from personalized service at community found at local yarn shops.
Steps To Start A Yarn Shop
Starting a yarn shop allows you to turn your hobby into a thriving business. But it takes more than just an enthusiasm for knitting and crocheting. Check out the steps and advice outlined here to launch your shop successfully.
Step 1: Research Market Demand
Starting a yarn shop can be a rewarding journey, weaving together a love for crafting, a knack for business, and a desire to build a warm community. However, thorough market research is key to ensuring your shop’s success. By understanding your customer base, analyzing competition, and choosing the right location, you can weave a successful path for your yarn shop.
The first step in your market research journey is understanding the demand for a yarn shop in your area. To tap into this potential, it’s essential to understand your customer segments. Typically, the primary customers for yarn shops are women aged 25-65 who knit or crochet as a hobby or for small-scale selling. Using the Census Bureau website to analyze local population demographics will also help estimate the number of potential customers within a reasonable drive time. Look for areas with higher household incomes, young professionals, and a vibrant arts and crafts scene, as these factors tend to support yarn shops.
Another approach to consider is running an online survey on community forums and social media platforms to gain insights into their interests, price points, and desired products.
Next, identify and analyze existing yarn stores in your area. Visit these shops to observe their strengths, weaknesses, product offerings, pricing, and customer service. This will provide a snapshot of the current demand, gaps in the market, and the competitive landscape.
Consider both independent yarn shops and big-box craft stores in your analysis. Independent shops often fill a niche that larger retailers don’t, such as offering hard-to-find supplies or specialty yarns. However, you’ll also need to strategize how to compete with the convenience of online shopping.
Finally, scout potential locations for your yarn shop. Look for areas with high foot traffic, ample parking, good visibility, and proximity to residential areas. Retail space availability and costs are also important factors to consider.
Opportunities may arise near craft fairs, fabric shops, coffee shops, colleges, or affluent neighborhoods. These locations could provide a steady stream of potential customers and create a sense of community around your shop.
Step 2: Write a Business Plan
The path to creating a successful yarn shop is much like knitting a complex pattern. Each step, each decision, and each stitch adds to the overall design, shaping your venture into a unique and vibrant creation. Just as a knitter needs a pattern to guide their work, an aspiring business owner needs a business plan. This document serves as your roadmap, marking out the journey ahead and providing a clear vision of your destination.
But perhaps the most valuable role of a business plan is that of a reality check. Starting a business is a journey filled with excitement and optimism but also uncertainty and risk. Your business plan provides a grounded, realistic view of what lies ahead, including a picture of the financial feasibility of your business.
Related: How to write a business plan
Step 3: Source Funding
The next step, which can be a big hurdle, is funding. If you’re wondering how to get the money to open your yarn shop, you’re not alone. Funding is a critical yet challenging aspect of kickstarting any business. Below are common sources of funding for a yarn shop.
The first source of funding to consider is personal savings . It can be expensive to start a yarn shop, so if your personal savings aren’t enough to cover the start-up expenses, you’ll need to look for outside funding.
Lenders are one of the most popular outside sources of funding for businesses. To obtain a loan, you’ll need to invest at least 15% of your personal funds into the project, have a decent credit score, and have sufficient collateral. If the bank feels the loan is too risky, they may use an SBA (Small Business Administration) loan guarantee, which can be helpful for newer businesses.
Many entrepreneurs also turn to private funding sources like friends and family . While easier to obtain than traditional loans, it’s critical to put any agreements for these private loans in writing. Outline repayment terms, interest, and what happens if the business fails. This protects both sides.
If your funding needs are not high or you’re not able to obtain credit from a lender, then a microloan program might be your best option. Microloan programs are typically offered by community development organizations, and loan amounts typically range from $500 to $50,000. In addition to providing funding, some organizations offer business training to applicants.
Related: Finding the money to start a business
Step 4: Register the Business
Before you can open your doors and welcome your first customers, you need to ensure that your business is properly registered and legal. This involves several key tasks, from choosing your business structure to registering your business name and obtaining necessary licenses and permits. While the process may vary depending on your location, there are general steps that apply in most cases.
Choosing a business structure: Your first task is to choose a legal structure for your business. The four primary types are:
- Sole proprietorship: This is the simplest structure where you operate the business as an individual. However, there is no legal separation between you and the business, so you have unlimited personal liability.
- Partnership: This involves two or more people operating the business together and sharing profits. There is also unlimited liability for the partners.
- Corporation: This fully separates the business from the owner and provides liability protection for the owner(s). The downside it is more complex to start and administer
- Limited Liability Company (LLC) : Combines features of sole proprietorships/partnerships and corporations. Owners have limited personal liability for business debts and actions without some of the hassles of a corporation.
Related: Comparison of business structures
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
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Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.
Related: Tips and ideas for naming a yarn shop
During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.
Related: Finding a domain name for your business
Obtain business licenses and permits: You may need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the yarn store is located. Some common local, state, and federal registrations a business needs include a sales tax permit and an Employer Identification Number if you plan to have employees.
Related: What licenses do yarn shops need ?
Step 5: Acquire & Set Up the Shop
Now that you’ve got your business plan, funding, and legalities sorted, it’s time to roll up your sleeves and get your yarn shop ready for business. Setting up the operations is an exciting phase; it’s when your vision starts to take tangible shape. A few tasks in this step include:
Picking the Perfect Location
Choosing the right location is more than just finding a place you like. It’s about being accessible to your target customers and ensuring the spot is in line with local zoning laws. Ideally, your location should be in an area where there’s foot traffic, adequate parking, and visibility from the street. Once you’ve secured the perfect spot, you’ll want to focus on store layout. Plan a layout that encourages customers to explore and browse. Accessibility is key. If you’re offering knitting or crocheting classes, make sure there’s a dedicated classroom space, too.
Setting up Your Shop
With the location finalized, you’ll get into the nitty-gritty of setting up the shop. It’s not just about filling the space, and creating an environment where customers want to stay. Start with furniture and displays that complement the aesthetic you envision for your yarn shop. Decor is not just about looking good; it should tell the story of your brand. Plan the layout to guide customer flow smoothly from entrance to checkout. Think about including shelves that make your range of yarns easy to see and touch. Having storage is necessary, especially if you plan on offering a wide variety of yarns. And if your shop will offer classes, consider a dedicated area where people can gather, learn, and share.
Finally, establishing supplier partnerships is key to stocking your shop with a variety of yarn types, colors, and textures. Establishing wholesale accounts with major yarn brands and distributors can provide a steady supply of popular products. But don’t overlook small indie dyers and local fiber artists. Partnering with them can offer unique, high-quality options that differentiate your shop from others.
Step 6: Hire Staff
If hiring employees is part of your yarn shop, there are some legal requirements you’ll need to sort out as an employer.
First, you’ll need to obtain an Employer Identification Number (EIN) from the IRS for tax purposes. Next, make sure all potential hires are eligible for employment in the U.S. by verifying their identification and employment authorization. State reporting is another important step, and each state has different reporting requirements for new hires, so make sure you comply with local laws. Most states will also require you to have workers’ compensation in place. Last, familiarize yourself with both federal and state labor laws.
Related: State guides for hiring your first employee
Step 7: Prepare to Open!
As you near the finish line in your journey to open a yarn shop, there are some additional details you’ll probably want to square away. Every business will have unique requirements, but these are some of the common tasks you should consider completing before opening your doors.
Business insurance: Look into various types of insurance to protect yourself from liabilities and other risks associated with running a retail business.
Setting up bookkeeping: Set up accounting software and systems to handle daily transactions, taxes, and financial statements.
Opening a business bank account: Keep your personal and business finances separate by opening a bank account specifically for your yarn shop.
Accepting credit cards: Set up a system for processing credit card payments like Square or Stripe .
Pricing strategy: Figure out how to price your yarn and other items. Take into account your costs, what the competition is charging, and how much your target customers are willing to pay.
Store policies: Create clear policies about returns, special orders, gift cards, and other procedures. Make sure your staff knows these policies inside and out.
Promote your shop: Get the word out using social media, hosting classes or events, and networking with local knitting groups or arts communities.
Grand opening: Plan an event that introduces your shop to the community. This can include special deals, workshops, or even live demonstrations to draw people in.
Common Questions When Starting A Yarn Shop
How much does it cost to start a yarn shop.
Starting a yarn shop requires a substantial investment. While costs can vary greatly depending on location, size, and specific business needs, initial costs can range from $30,000 to $100,000. Below is a detailed look at the types of expenses you should be prepared for.
Business registration: Registering your business will likely cost between $100 and $500, depending on your state and the type of business structure you choose.
Location deposit: Renting a retail space often requires an initial deposit. This can range from one to three months of rent, so for a space that costs $2,000 per month, you’d be looking at up to $6,000 just for the deposit.
Renovation and setup: Turning a rented space into a yarn shop will involve some costs. Think shelving, display tables, and signs; costs can run from $5,000 to $30,000.
Initial inventory: Stocking up on yarn and other supplies can be one of the biggest costs. Plan to spend between $10,000 and $20,000 to offer a variety of choices to your customers.
Equipment: Point of sale systems, furniture, and other equipment can set you back around $5,000 to $10,000.
Business insurance: Initial costs for insurance can be around $1,000 to $3,000, which often covers the first few months of operation.
Marketing: You’ll need to budget for an initial marketing push to announce your grand opening. Plan for around $2,000 to $5,000 for flyers, social media ads, and perhaps a local newspaper feature.
Miscellaneous costs: Things like utility setup, initial office supplies, and other miscellaneous costs can add up to around $1,000 to $3,000.
Last, it’s recommended to have three to six months of operating expenses saved up as a buffer. This can help you navigate through the initial stages when revenue may be inconsistent.
What skills are helpful in running a yarn shop?
Running a yarn shop requires a blend of creative, interpersonal, and business skills. Here’s a rundown of some of the helpful skills:
Passion for crafting: This is more than a skill; it’s the heart of your yarn shop. Being passionate about knitting, crocheting, or any form of fiber art will not only fuel your dedication to the business but also allow you to connect with your customers on a deeper level. It’s this shared love for crafting that turns a store into a community hub.
Customer service: A yarn shop is a haven for crafters. Providing excellent customer service means not just selling products but also offering advice, suggestions, and a listening ear.
Business management: As romantic as the notion of a yarn shop might be, remember that it’s still a retail business. Understanding the basics of running a business, such as budgeting, pricing, inventory management, marketing, and managing expenses, can help ensure your yarn shop remains financially healthy.
Networking : Building relationships with suppliers, local artisans, and other businesses can offer advantages like better prices and cross-promotions.
Adaptability: The retail landscape is ever-changing, particularly with the rise of online shopping. Being open to new ideas and willing to adapt can set you apart from the competition.
What is the NAICS code for a yarn shop?
The NAICS code for a yarn shop is 451130.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Related: What is a NAICS code and how to find yours
Resources: The National Needlearts Association Knitting Guild Association
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Welcome! My name is Greg Bouhl, and I am a serial entrepreneur, educator, business advisor, and investor.
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