image of machine demonstrating an embroidery business at home

4 Tips for Bigger Embroidery Business Profits

The embroidery business is just that, a business. Shop owners get in it for one thing, to make profits.

Four tips to support a new embroidery business, helping it become successful and stay that way.

Behind every small embroidery business, there is a fascinating story to tell. Although each shop may have had a unique approach to get where they are now, but they things in common on the way. Almost all of them suffered through a few of the same speed bumps.

From customer service and quality control issues, to finding the right suppliers and determining the right pricing, every business goes through similar hardships. Think of it as a rite of passage for every embroidery business entrepreneur and startup.

Your shop may never be quite trouble-free, but there are some ways to make the trip to success a little less difficult. Four tips to get the most profits out of your new embroidery business:

Consider buddying up

As an embroidery business grows, it may be useful to find someone to help deal with overflow. An affiliate can work with orders you sell, but cannot complete with your current setup.  Partnering with similar companies, a small shop can have the same purchasing power as the bigger players.

When buddying up, be cautious with the companies you want to join forces with. One lousy deal and you might be facing an aggressive competitor, not a mutual colleague.

Balance business wisely

The point of an embroidery business is to keep machines working. To be profitable, every system needs to perform regularly.

When machines stop, so do profits. This is why there should be a variety of projects, with both low and high profit margins. Having the occasional high-volume/low-margin project intermixed with several high-profit, yet small-quantity jobs will keep your progress steady and manageable.

Be smart with your growth

A flexible business model, scalable as your volume grows, will prevent growing pains during growth. As a shop owner, always ask how you will be able to effectively adjust when orders become double, triple or higher than they are now.

Management always needs a plan. Adapting to the changes and needs of a larger organization will help an embroidery business maintain healthy profits.

Embrodiery Business Profitibility

Always focus on profitability

Pricing should never be “off the cuff.” An embroidery business should have a pricing structure that fully supports costs and expenses, including profits. Can you imagine a business without profitability? It is simply impossible!

Researching the market is essential to starting any new enterprise, but starting off by averaging what the competition charges is not a sustainable business model. A price list should be based on your business, not your competitors.

Take all of your expenditures (even the hidden ones, like prep and finishing) and make sure your shop’s floor plan is laid out for maximum efficiency. Then, start measuring realistic production times. Take a stopwatch if you have to.

Crunch all the numbers, using times for typical yield based on actual production, and have a pricing structure that balances the numbers properly. One goal could be to get flat-rate pricing that covers all expenses, with the right profit built-in.

The main thing to keep in mind is you got into the embroidery business to make money. With a little planning and using these four tips, your shop can grow steadily and remain profitable.

For a successful embroidery business, you need the right equipment, threads, supplies, training, and support! Colman and Company the place to get the information, tips and troubleshooting to keep your shop making money!  For more information, visit today or call 800-891-1094.

Do you have tips on getting more profits from commercial embroidery? We would love to hear them! Join the conversation in the comments below.