There are tons of different ways to make puppets of course. You can just build it out of foam, but I decided to make a foam body then cover it with a plush skin. This let me be messier with the foam since I knew I would cover over any inconsistencies with nice fabric skin. Since getting your hand into the muppet is the most important shaping part, that's where I began, building out from the interior shape.
I made two removable rods to manipulate the arms, so you can get a lot of different poses with this guy.