Can you make money running an embroidery business?
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If you are wondering whether you can make money running an embroidery business, the answer is definitely yes. But, how much money can you make? Could you replace your current salary? If so, how much would you have to work and would running an embroidery business be better than what you are doing now?
Advantages of running an embroidery business
Before we get into the nitty gritty of discussing how much you can make with your embroidery business, you should consider if this type of life would even suit you.
There are quite a few benefits of running an embroidery business:
- You can set your own hours
- Probably, you won’t need any outside investors or partners
- You can work out of your home (if you have the space)
- With a bit of practice and the purchase or an embroidery machine, it’s fairly easy to get started.
Disadvantages of running an embroidery business
Running an embroidery business does have some disadvantages, too.
- You will need dedicated space to set up your machines and do your work. Do you have an area in your house you can dedicate to embroidery? And will it be a place you will want to spend hours of your day? You may have ample room for embroidery in your basement but do you want to hang out there day in and day out?
- You will need to make some upfront investments. Embroidery machines, especially multi-needle ones, are not cheap – typically $5000+. If you don’t have the cash laying around, you may consider financing an embroidery machine.
- You may be required to work long and odd hours. Embroidery businesses tend to get quite busy around the holidays. Are you willing to sacrifice time with your family and friends to crank out embroidery orders?
- You will need to find customers. If you live in an area that is saturated with embroidery businesses, you will need to deliver better service or prices than your local competitors. Or, you can focus more on creating embroidered items and selling them online to a larger audience.
If you are not deterred by these downsides, then it’s time to consider the finances.
So… how much money can you make running an embroidery business?
To determine whether or not you can make enough with an embroidery business to replace your current income, you will need to spend some time thinking about how much money is coming in and going out of your business.
Step #1 Assess how much money you are currently making
If this number seems low, then running an embroidery business may be a good option for your next career. The first step in determining whether or not starting an embroidery business will replace your current income is to look at the amount of money you are currently earning.
Step #2 Decide how much money will you invest in your new embroidery business
The next step is to look at how much money you can afford to invest into starting this type of business. The price for a used or refurbished embroidery machine could be as little as a few hundred dollars, but if you opt for something more professional, newer or a multi-needle embroidery machine, you might need to spend several thousand dollars.
Step #3 Consider what your ongoing expenses will be
Next up is how much money you can expect to pay out in business related expenses every month. This could include things like the cost of materials, supplies, or even renting studio space if you don’t have room in your home. Don’t forget to factor in the cost of maintaining your embroidery machine. A $500 repair bill can quickly eat away at your profits.
Step #4 What will you charge?
If you are providing embroidery services, you will need to establish a formula for charging your customers. Typically this is based on a hooping fee and the stitch count of the design with quantity discounts often factored in.
Step #5 How much do you want to work?
Obviously the more time you have to do embroidery, the more money you can make. If you plan to only work half days, it might be challenging to replace a full-time salary.
Step #6 Determine what your profit will be
Finally, what is left over at the end of all this work and expenses can help determine whether or not starting an embroidery business can replace your income. For example, if after all of these expenses are subtracted from your monthly income you end up with nothing or even less money at the end of each month then it might not be worth starting an embroidery business.
If, however, there is a decent amount leftover that can either replace some part of your salary or contribute to other savings or investments, then it might be worth making the jump. A good compromise may be to start your embroidery business before you quit your job, working on your embroidery business on nights and weekends until you build up a good clientele and have enough work to keep you busy full-time.
My friend, Ellie, who runs the sewing/embroidery business, Gracefully Stitched, encourages and warns wannabe embroidery business owners.
“Be prepared to be patient. It takes time to develop clientele. This is the kind of money that is better suited to part-time/side hustle kind of person. But, you control how much you want to work and or grow.”
Calculating how much money you can make running an embroidery business
Let’s say you offer embroidery services and focus on primarily stitching out names and monograms on items that your customers drop off. You could probably complete 4 of these jobs in an hour, which would equate to 25 embroidered items in an 8 hour work day and the cost per piece averaged $12.
25 * $12 (per piece) = $300
That seems like a lot! But it does not consider the amount of time it takes to communicate with the customer, collect the money for each order, plan drop off / pick up, etc…
There are a couple of caveats to this scenario.
- You would need to find 25 customers or one big customer who needs a lot of pieces embroidered.
- You would have a very, very busy day and make no mistakes!
To effectively make money with an embroidery business, it helps to have a strategy.
Tips for making the most money with your embroidery business
Run more than one commercial embroidery machine
One way to make more money is by running multiple machines. This will allow you to work on several jobs at once and help your business grow faster than if you only had one machine working for you.
Consider the aforementioned scenario. If you had two embroidery machines, you might be able to double your output, which could mean that you could earn $500+ per day!
Price yourself higher than the competition
Another strategy that can be used in order to make more money with your embroidery machine is to price yourself higher than the competition. For some reason, many people assume that if they charge a little bit less or even the same as everyone else is charging then they will somehow attract more customers.
This, however, is the wrong attitude to have when it comes to pricing yourself as an embroidery business owner. If you want your business to be successful and make a lot of money from this industry then you need to price yourself higher than other people in your area that are doing the same type of work.
The more you charge, the less people will be willing to pay for something that is similar in quality and design. This means that if your business can offer a unique service or product then you should price yourself higher than all the other embroidery businesses out there so that it becomes clear which company is offering the best embroidery services.
I know, I know, social media can be a bit annoying. But, it is FREE advertising, and if you want to make money with your embroidery machine then it is a must, especially sharing your work on visual platforms like Instagram, Facebook and Pinterest. Imagine how much money could be made if every time someone likes, shares or comments on one of the posts that are published by your business they end up spending $20 each?
Own your zip code
Owning your zip code means that you should start by letting the people right around you know about your business. Then, think about growing out from there. Focusing on your immediate area also provides face to face contact, and then those people give you referrals all the time
Offer signature products in addition to services
Let’s face it. You are probably much more creative than any of your customers. They are not going to come up with the ideas for cute embroidered items that they could pay you to make. You need to plant some seeds.
Develop signature products that have profit margin built in. For example, a few years ago I started making black knit beanies with embroidered nautical flags representing the recipient’s initials. Friends and family loved them and requested more. My cost was less than $5 per beanie when I bought them in bulk. I believe they could have retailed for at least $25.
My point is – customers won’t always come up with these ideas. But, if they see it, they might want to buy it. And, trust me, after you embroider about 15 nautical beanies – you get pretty good at it.
Partner with a local boutique
Are there any boutiques in your area that might benefit from offering embroidery items? It’s possible that a boutique owner would like the additional revenue but does not have space/time/money/interest to offer embroidered personalization. That is where you can come in.
I have a friend who had such an arrangement with a local boutique. She would pick up the orders every few days, embroider them at home and then return them completed to the boutique. Win-win.
Focus on the right type of customers
If you are a people pleaser by nature, you may have a hard time saying no to some customers. But, you will need to be able to do this in order for your business to stay afloat and prosper.
If you are too nice of a customer service provider, then what ends up happening is that every single person who wants something done – gets their way. You can’t afford that. You need to be able to provide a certain level of quality and service, but not at all costs.
The more you can focus on the right type of customers – those that understand your process and have realistic expectations then the better off you will be.
Minimize your spending on blanks and supplies
Before you settle on a particular brand, try out less expensive threads and stabilizers because every machine is different. Some you can buy a lot cheaper that others. If the cheaper supplies do not affect the quality of your finished products, why not use them?
Also, it pays to establish wholesale accounts with suppliers where you can – not just for supplies but also for blanks. Many of the wholesale blank suppliers have items that your customers don’t see at typical stores. This allows you to offer something unique to your customers that they can’t get other places.
So, how much money can you make running an embroidery business?
As you can see, there are so many factors that will determine how much money your embroidery business can make. You can have all the right equipment and supplies, but if you are not willing to work at it, can’t keep your machines running, and are unable to find any customers your embroidery business will never make any money.