Starting a Yarn Store Business

LollyKnit, Creative Commons License

A yarn store may not sound like a highly profitable business, but you may be underestimating its potential. It takes hard work and dedication, but many people earn a good living by operating a yarn store. Best of all, they support themselves by doing something they enjoy. If you enjoy any type of needlework, owning a yarn store could be the dream job you've been waiting for.

Write a plan for your yarn store business. All successful businesses start with a written plan. This plan identifies how your company will operate, what your target market is and how you will reach the customers of that market. Download a business plan template and customize it to fit the needs and budgets of the yarn store you plan to start.

Secure the funding that is needed to operate your business. The business plan you drafted in the previous step should have identified the operating budget for your yarn store. Consider how much funding is required to cover your operating costs for the first 18 months. Raise this capital by whatever means are available. Personal loans from your bank, credit card balances and loans from friends are the primary methods of funding for most small business owners.

Register your yarn store as a company. This is an important step because it allows you to buy items wholesale, and also makes it easier for you to pay sales tax on the items sold in your store. Being properly set up as a company also gives you the ability to obtain a Federal Employer Identification Number, which is used to pay income taxes in the event that you hire a staff to work in your yarn store. Contact the city clerk's office in your town to obtain more detailed information on how to set up a company for your yarn store.

Lease a building for your yarn store. You will need adequate retail space for your yarn displays, project books and other items that you will sell. Cash register space and room for a small back office are also necessary. It is nice if you can squeeze in room to warehouse additional inventory in the back, but it is also perfectly acceptable to have your entire inventory in the storefront. The location should be easy and convenient for customers to reach, but since you are in a niche craft business, you do not necessarily need to pay top dollar for a high-traffic location.

Sign up for accounts with yarn wholesalers. You will need to have registered a company in Step 3 before you can proceed to this step, since most wholesalers require a copy of your business license for their records. This is particularly true in the case of wholesale items that do not carry sales tax. Establish accounts with wholesalers for yarn, thread, needles, fabric, craft books and any other items that you plan to sell in your store. This will allow you to buy your inventory very cheap so that you can profit by selling it at the suggested retail price.

Consider building a section in your yarn store where people can relax and work on projects. Setting aside some space for comfortable sofas and chairs will provide people with an inviting atmosphere to work on craft projects and give your customers an incentive to come into the store. You can also earn supplemental income by selling coffee, tea and light snacks, since customers may have a tendency to work on their projects for a long period. Providing a warm social atmosphere can be very popular among some of your customers.

Conduct regular craft seminars and workshops to teach people how to use the products you sell. Exposing new people to needlework or new needling techniques will not only teach a skill to new people but will increase the number of people in the community who have a need for the products you sell. Holding monthly seminars also gives customers a reason to come into your store, which increases your chances of having a big sale day.

Think about opening an Internet storefront. Selling yarn and other supplies online opens the door to a much larger customer pool than what you have access to on a local level. Selling items online also adds a convenience factor to your local customers, who can do their shopping in advance and then choose between paying for shipping or picking items up at the store.


  • Starting a business of this nature can take time to build a large enough customer base to be self-sufficient. Make sure you have enough savings to live on for 1 to 2 years before quitting your job for this type of venture.


About the Author

Jerry Garner has been writing semi-professionally for more than 15 years. The body of Garner's work includes informative articles, news and current events and historical essays. He is an avid sports fan and frequently writes about outdoor activities online.

Photo Credits

  • LollyKnit, Creative Commons License