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How to Start an Embroidery Business

Madhushree Kelkar
An embroidery business can not only be emotionally satisfying, but also a highly profitable business venture. Knowing how to initiate this business can help you turn your start-up into a full-fledged business.

Advice

If you are new to embroidery, outsource your embroidery digitizing needs as they need a certain level of experience and expertise. This way, you can save a lot of time and effort.
If you have the gift for embroidery, you can make it your full-fledged business. In today's times, when there are many events in offices, schools, clubs, etc., they require embroidery on their merchandise. This could be a window of opportunity for you.

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If you price your embroidery service right, you will get many customers through word-of-mouth publicity. It is, indeed, a very lucrative business that requires a considerably limited amount of start-up capital.
Hence, if you are looking for a business opportunity that will also vent your creativity, starting an embroidery business will be a good idea. However, like any other venture, you must know certain things before you initiate your business operations. Here are a few guidelines that will tell you how to initiate this business.

Conduct Research

It is important that you conduct thorough research before jumping into this business. Many people go ahead and get an embroidery machine without knowing about the target market, embroidery demand, competition, profit margin, etc.

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Do not commit such a mistake. Conduct market research to know what kind of embroidered items are in demand, understand about the strengths and weaknesses of your competition, know about the areas where you can pitch your business proposals, etc.

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Know whether you want to lease a workshop or conduct a business from your home. Also, it is important that you know which machine to source and whether to buy or lease it out. All this groundwork is important before you actually start the business.

Find a Location

Embroidery business is one such business which can be easily started in your spare room or garage. You will require space to fit in a commercial embroidery machine. Ensure that it is climate-controlled and has electricity as the machines will need it.

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However, you will have to check the zoning restrictions with the local authorities. Ensure that your workstation is clean and the shelf with all the supplies is arranged properly. If a client visits your place, he must see a clean place.
If you buy a place or lease it out in a commercial area, it will unnecessarily prove to be very expensive. You can always start at home and shift into a commercial space once your business picks up.

Get Trained

Even if you are an embroidery enthusiast, making it a business will require professional skills. Hence, it is highly recommended that you learn about all the aspects of embroidery, including manual- and machine-designed ones thoroughly.
Join courses and workshops on different types of embroidery, go through online videos, or even get books on the subject. Remember that most branded companies will offer free training for using your embroidery machine and will give you an instructional DVD or manuals.

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It is important that you attend this training or else, you will not be able to operate the machine. Many also offer 24/7 customer service support, so don't forget to solve your queries.

Find Your Niche

Embroidery designing is fragmented into many different segments; hence, know what your business niche will be. Choose from the various options like shirts, t-shirts, ladies wear, hats, caps, bags, leather goods, shoes, belts, bed sheets, home items, etc.

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It is important that you decide your niche before beginning the business, as your entire business plan will be based on it. Not only this, but your target market and promotion will also vary from item to item.
Also, it is not advisable to go for too many options in the initial stages of the start-up as it can hike your costs and affect the quality of your embroidery.

Business Plan

You will have to formulate a business plan based on your niche. You will have to decide on the important parameters like the number of equipment to source, supplies to others, promotion and pricing of the products, etc.
You will also have to ascertain a budget and work within its constraints. You will also have to decide about the transport of the finished products and their distribution. Ensure that your business plan is foolproof.

Sourcing Finance

The most expensive investment in this business is sourcing the commercial embroidery machine. The price will be dependent on the number of heads it offers.

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You can lease out the machine or buy a secondhand one. This will save you a lot of cost. Also, it is said that an old machine is more efficient than a new one.
However, ensure that you do not incur too many repair and refurbishment charges. You can raise personal finance or avail an SBA loan. You can also get a loan from a bank, but the interest rates may vary depending on your credit score. If you are a member of a credit union, you can get a personal loan at affordable interest rates.

Legal Formalities

You will have to check with the local, state, and federal authorities for licenses and permits required to operate this business from home. Also, find out about the sales tax and income tax. You will have to register your business as 'doing business as.'

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Think if you are going to operate as a sole proprietor or an limited liability company (LLC). If you have a large business setup, registering as an LLC is advisable. If you are hiring employees, you will have to get the Employer Identification Number (EIN). Consult an insurance expert to know about the kind of business insurance that you will require.

Create a Portfolio

It is important that whenever you go for a meeting, you carry samples of your embroidered items. This will convince your prospective clients about your capability and delivery. Do carry swatches of various embroideriesas it will show them that you offer a variety of solutions. Try to be innovative in the designs so that you will have a competitive edge.

Equipment

For conducting this business, you will require a commercial embroidery machine with an inbuilt computer and software. Ensure that you buy one of the networked machines so that you can manage large orders.
A home embroidery machine may have limitations; hence, it is recommended that you get a commercial one. You will also need bobbins, thread spools of different colors, needles of various sizes, spares, platens, hoops, etc.

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Apart from this, you will need embroider cap frames for embroidering caps. You may also need furniture for your workstation and a place to keep all the material. You will also need access to telephone and Internet to receive the orders.

Find the Right Machine

For a start-up, you can buy a single-head embroidery machine. Get a commercial/industrial embroidery machine with warranty instead of the home version. It will help you roll out bulk orders and at the same time, maintain the quality of the business.
Get a machine where the computer will be inbuilt. All you will have to do is put in the design and watch the machine embroider it. Ensure the machine has the required SPM for getting good results. Also, it is advisable that you get a machine that is network-able and connected to another machine for large-scale orders.

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Buy a machine where the manufacturer will offer warranty and free training. Inquire in the market and read online reviews to know which machine is the best. Conduct a cost-benefit analysis to get the best bargain.
Most importantly, the customer support personnel should be available whenever you need them as you cannot afford a situation when the machine breaks down.
Some of the brands of embroidery machines are:
» Brother
» Tajima
» Melco Amaya
» Toyota

Digitizing

As far as the digitizing is concerned, get a software that will give excellent quality of embroidery in lesser amount of stitches. This will help save a lot of cost.
Even when you will get a cost advantage by buying a machine-software combination, get a basic level software which will be manageable by you instead of a complicated one. There is no point in buying it, if you can't use it.
Hence, go for a user-friendly software instead. Ensure that the machine will have minimum thread breaks and will be usable for rough materials like leather, canvas, etc. For most people, digitizing will be complicated; hence, it will be best outsourced.

Promote Business

If you have a home-based embroidery business, it becomes all the more important that you advertise about it in the local magazines and newspapers. You can also use embroidery magazines to promote yourself.
Try to enlist your business name in online and offline directories. Get a search engine optimized website. This will reflect your website in the top search results when someone searches for an embroidery vendor in your area. Give discount coupons to get more and more clients.
Send a newsletter to your clients and start a blog about the embroidery services that you offer. Start social media pages for your business and update them with embroidery DIY projects and many other interesting tips. This will help connect with your prospective customers. Try to participate in local craft fairs where you may find customers.

Business Expansion

Once your business is established, you can expand it further by engaging in new ventures. You can embroider logos on bags, caps, and t-shirts for companies and even offer personalized embroidery of names for gifts.

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Similar services can also be offered to the local police and fire departments. You can also approach the local clubs, hotels, and schools who are always in need for embroidery for branding purposes. Also, tap in the local churches, PTA, and sports teams.
You can approach the local sports shop and offer to embroider t-shirts, caps, and letters for Letterman jackets. You may also customize embroidery designs for your customers based on their requirements.

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Also, during the holiday season, you can embroider stockings, scarves, etc., for gifting purposes. Embroidering shoes and guitar straps is also catching up fast. You can even start your own designer label of embroidered garments and textiles and supply to retail outlets. This can earn you a good amount of money.
Start with a single-head machine at first, and as your business expands, you can go for a multi-head machine. Also, once you get the right expertise, you can graduate to complicated digitizing like embroidering photos, etc.
You can embroider quilt blocks and children's clothing and sell them yourself as an independent business. Invest in giving away samples in the first year of the business; it will definitely help promote your venture. Also, try to offer logo designing services with embroidery making as many people are looking for it.