3 Essential Tips for Determining Whether You Have a Crochet Business or Hobby

Decide Now Whether You Crochet as a Hobby or a Business

Selling crocheted items may seem simple enough. You just post a few items on your blog, let your readers know you have stuff for sale and wait for orders. As easy as that sounds there are a few back-end preparations you need to consider.

Someone once told me when I was teetering on this same fence of whether I’m actually a business – that when you exchange services or product for a financial reward you are indeed a business.

1. Take Responsibility for Your Business

After much gritting of teeth and denial on my part I had to accept the fact that my blogging intentions were now for profit. Sure I started out innocently enough – I was tracking my crochet journey.

However, the moment I turned the corner into accepting advertising via Google Adsense, selling patterns or crochet items my ‘hobby’ turned into a business.

Sure, I wasn’t earning thousands of dollars but according to law this income as little as it may seem to me is income and must be accounted as such.

• Do you want to sell your crocheted items?
• Do you want to sell patterns?
• Do you want to sell advertising?
• Do you want to make a blog about crochet – reviewing products?
• Do you want to make what you want, when you want, for whom you want?

2. Research the Laws in Your Area

Do some research into local, state and federal regulations concerning your business. [If you have one :0] You can do this by visiting your local city hall.

I find that they are willing to give information to those seeking home business information.  If your business is an at home business aka blogging you need to find out if your neighborhood is zoned for such activity. Believe me you want to find out sooner than later because fees can be steep.

It turns out that in my state and city a license is necessary as well as a DBA or Doing Business as name aka Fictitious Business name which needs to be advertised in the local newspaper.

For Federal small business or home business information visit the Small Business Administration site. It is filled with great information how to start a business, the necessary licenses, taxes, Employee Identification Numbers etc.

Questions You Need Answered Now

• What are sales tax in your city?
• What will shipping cost? [this is included in your gross earnings so be sure to get accurate costs]
• What will packaging cost you?
• How will you determine the price of your items?
• Will you be getting a small business loan?
• Do you have a business and marketing plan?
• Who will do your record keeping? Accountant? Book keeper?
• Who will take care of the legal aspects of your business?
• Will you be a Sole proprietor? Limited License Company?
• When will you open a business account?
• Do you need an EIN or can you use your social security number?

3. Raising Start-up Costs

After you’ve done all the research above – and you are sure you want a business you need to take the next step. Do you have the funds to start a business?

I know that the book I wrote (Hooking for Cash: 10 Ways to Make Money with Your Crochet Blog) is about simple things you can do to earn money on your crochet blog but really – do you have funds set aside for this?

There are always costs with any investment and a blogging business is no different.

What costs go into blogging?

• Domain name (~ $10)
• Hosting (~ $5 – $20+/month)
• Graphics ($0 – 100+)
• Advertising ($0 – 100+)
• Taxes [paid quarterly for a business and YES, you do have to set this aside yourself] – Tax all profit for business and all sales for hobby.
• Computer Maintenance (Varies – $100+)
• Internet Access (Varies – $100/month+)
• Time (Varies+)

Disclosure:

Remember, I’m just a mom, who crochets and blogs. I offer information to those who want to earn from crochet blogging but I’m not your lawyer, account, counselor or personal guru. You need to do your own research – start with your local government – ask specifically about the rules and regulations of home business ownership with an emphasis on blogging aka self employment or independent contract work.

Remember too, that as a self-employed individual, you need to take out the withholding taxes that an employer would take out for you. Do you have the discipline? Another thing, you are responsible for health insurance, vacations, payroll, etc..

I’m not trying to discourage you, I’m just giving you the real facts. There is no ‘pie in the sky’ easy way to do this and I would rather you get all your facts now and prepare yourself for self-employment – it might not be what you are seeking after all.

You might indeed be seeking a hobby – that’s a whole other topic. [Yes, if you earn from a hobby that too is taxable so don't think you missed that bullet.]