I have 2 spaces 1sewing 1for Crafts.
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start with the craft space. Get a few boxes or baskets and gather like items together. Ie hunt down all the scissors. Put in box. Decide what to hunt next....the craft papers? Hunt them down put in box and yes label the box with the contents. If you have kids around you can play a version of “ i spy”.
the sewing room, hang your material from wooden hangers so you can see what you have. If you want to measure the fabric and tag it with the yardage...that’s helpful.keep like colors with like colors. Hanging will keep the wrinkles out.
Your sewing patterns, sort as to size, then in a plastic box or large zip lock bag. Label of course. I have my thread sorted into primary colors all reds in a plastic shoe box. All blues the same, yellows..boxed. Then the secondary colors...same. Sorry for the interruption
My work room had two zones - sewing and beading. I started with most used items closest to work space and went from there. I did keep like with like - lots of clear storage boxes will be your best friends. You may not get it "just right" first time around, but as you work and move in your space, it should become clearer where the best places are for your items.
Browse through the many solutions here....https://www.hometalk.com/categories/organizing/craft-room
Get 2 book shelves. Use one for craft supply storage and one for fabric. Put them on opposite sides of the same walls and put your workspace in the middle.