When you have a yarn related business, it’s important that you are making a fair wage while pursuing your passion. You need to know what your personal fair wage is so that you can properly price your finished handcrafted items or patterns. Most articles written about pricing handcrafted items mention using an hourly rate of …
In reality we have two types of of inventory:
1. our raw materials
2. our finished objects
Both of these have value and we must record or track this value (cost), not only to report on our business tax returns but also so that we can also calculate the sales price of our finished item.
Bookkeeping and Accounting in Your Yarn Related Business (BAYYRB). Because both knitting and crocheting are both considered hobbies you are going to have to “prove” to the IRS that your yarn related business is something that you started in order to make money (a profit) from.
Over the last year and a half as I’ve been S-L-O-W-L-Y launching Fanciful Things I’ve read a lot of articles, listened to a lot of webinars/podcasts and taken some classes on starting a yarn related business – I’ve gained a lot of useful information but the one area that seems to come up short is bookkeeping and accounting for your yarn related business.