WordPress Prompt

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Let’s Discuss

As someone studying business, I bet you can guess where this prompt will take me. You see, I have heard from many about their businesses and their questions about why they aren’t profitable. In most cases, it is due to a lack of understanding in business that leads to that issue.

Finding a Problem, Creating a Solution

That is the basic concept of business. If you notice a need and have a solution, create it, and the sales will come. It reflects the “if you build it, they will come” mentality that you see in the Kevin Costner movie, “Field of Dreams.” As a matter of fact, business isn’t like that. It is much more complex.

Let’s Apply This to the Home-Based Crochet Business

I’ve seen a lot of people try to launch a business selling their crochet goods. There is one problem: The profit-to-time investment ratio is very uneven for most. Some are very successful. This is usually seen when people sell heavily online and in a market atmosphere. However, if you research the averages, the majority of people in this field do not make the kind of money they think they will.

Crochet product sales are a flooded market. There is nothing wrong with being supportive of fellow cro-preneurs. Support of fellow entrepreneurs is a good thing, no matter what business you are in. What I am referencing is the unfortunate aspect that, with so many options and so few buyers, it can be difficult to make the kind of money you want in the field. Furthermore, without intense time investments, the profits are likely to remain thin.

Does That Mean Selling Crochet Goods is Bad?

No. Often, the people in this field are simply trying to make a little extra money while they are home with their kids. They are raising a family, taking care of their home, and selling the things they make is just another layer of purpose in their daily life. This kind of business is often referred to as a hobby business because the profit-time/materials investment ratio is so low. That is just evaluating the Cost of Goods Sold (COGS) percentage and gross profit. The actual profit is lower and often ignored.

Don’t even get me started on Business Taxes and Proprietary Rights

The crochet business is the worst for this, especially theft of intellectual property. People are notorious for stealing the patterns created by others and claiming them as their own. These cro-preneurs generally do not have the kind of money necessary to protect their copyrights. It is a heavy theft industry when it comes to this kind of thing.

While most represent as a sole proprietor and can file their earnings on their taxes, many do not realize how theft-heavy this industry tends to become. I have seen so many have their work stolen without the funds to defend their copyrights. Even more do not even know how to do their taxes. Oh, and if you are accused of stealing someone else’s proprietary information or copywritten material, those sole proprietors suddenly find themselves losing their shirt.

Sole proprietorships don’t protect your personal assets. Many do not realize they can lose their home in a lawsuit without legal protections, like an LLC. Even more do not realize how important it is to maintain a separation from your business finances if you do go for an LLC, because, if you go to court showing your personal assets are still mixed into your business finances, then those protections may not apply in the end.

College is Unnecessary

Simply put, if someone does their research before starting a business, you’re golden. Ask someone who understands business, the market you wish to enter, or even just befriend others within the same field who have had a business for a while. You don’t need a degree to understand entrepreneurship. All I recommend is not jumping in blind.