Once you are ready to turn the blanket right side out, check the fabric on both sides for any loose threads or anything else clinging to the flannel and remove it so it doesn't end up inside the blanket making a bump.
Then, rather than pulling the whole blanket right side out at once, I like to do the corners first so that I can get a nice square corner. Reach inside the blanket and grab one of the corners and pull it part way out of the opening. Take your chopstick and insert it into the corner from the wrong side and use the tip of the chopstick to gently poke out the corner. Rather than pushing on the chopstick, I like to brace the end of the chopstick on a surface as shown here and use my finger to rub the corner until it is the way I want it. This is a more gentle method that reduces the possibility of overstraining the fabric and breaking through the corner.
Finish turning the blanket right side out and press the edges flat all the way around. See how nice that corner looks?
Adjust the opening so the edges are straight and slip stitch the opening closed.
To finish the receiving blanket, the last step is to stitch along the edge. You can use a straight stitch and edge stitch about 1/4 inch from the edge. If you have decorative stitches on your machine, you can use one of those on the edge for a special finish. Here, I used a three-step zig-zag stitch with a colorful variegated thread. When you are using a decorative stitch, be sure to practice first on scrap fabric and figure out how close to the edge to sew and how to turn the corner. Some decorative stitches just don't work well and it is better to figure that out ahead of time.
Once you are done with the edge-stitching, shake the blanket out and trim the loose threads and your beautiful receiving blanket is ready for gift giving!
If you are interested in making other baby gifts, these books are full of wonderful ideas (baby clothes are great fun to make)!: