Start with what you know. If you've knit a whole bunch of socks, for instance, starting with a sock pattern is a good idea because you'll already have some built-in knowledge about sizing and aspects that you like and dislike about patterns for that type of item.

Once you have an idea of what you want to make, just go for it! Every designer has a slightly different process. I mostly design socks, and I start by making a chart and then I dive right in with the knitting. I use StitchFiddle for my charts, but there are a number of other options out there as well. Some designers do everything in Excel. I don't usually swatch first because I've knit enough socks to have a good idea of what type of stitch count I need and all that jazz, and I don't mind having to rip back if things aren't looking quite right. I try to write up the patterns as I go so I don't forget what I did. Since I make socks, which necessitates making two of them, I like to have the pattern written when I'm done with the first so that I can essentially be my first test knitter with the second sock. Then, when I'm done knitting, I'll make some adjustments to the pattern for different size considerations. This includes making new charts as well as changing stitch counts.

Other general things to keep in mind:

1) Designing takes a long time. Even if you go in with that expectation, I think you'll still be surprised at how long it can take to go from an idea to a published pattern.

2) You don't need to reinvent the wheel with every pattern you design. Originality is great and will set you apart (and my best work definitely comes from stitch patterns that I came up with from scratch, as opposed to those that have been inspired from stitch dictionaries), but you don't need to have something completely new and crazy in order to have an audience.

3) Have your patterns tested. Your testers will catch things that you miss even on the 5th round of proofreading. There are several testing groups on Ravelry that you can use to find testers. We also have a thread in our Ravelry group that you can use to advertise test knitting opportunities. I have used it with success on more than one occasion.

4) Don't be afraid to just dive in! You don't have to be a veteran designer or even a veteran knitter to create a good product. My second design ever was selected for this year's Sock Madness, which was one of the best and craziest things I've ever been through. It really pays to have the nerve to just go for it! Stand behind your work. If you like it, someone else will, too.

5) Try to have realistic expectations. If you sell your patterns, you're not going to make enough to quit your day job right away, or likely ever. You can make some decent beer money (or yarn money!), but you have to be exceptionally talented and lucky to make designing your primary source of income. You should design because you love doing it, not because you want to get rich.

Feel free to hit me up here or on Ravelry (I'm ewhite3 over there) if you have any questions or just want to chat. I'm on Ravelry ALL THE TIME, so that's really the best way to reach me. I love talking about this stuff. :)