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Starting Embroidery Business in an Economic Downturn

October 14, 2020
embroidery business

Did you start the year believing that 2020 was going to be your year, but then COVID-19 happened, and you had to hit reset? Same. We’ve all been dealt the toughest of cards this year, and though we cannot take back the time, we can reinvent ourselves, do things differently, and still win. Besides, 2020 isn’t over yet, and besides everything happening, this could still be your year.

Covid-19 has shaken the world economies in the most unprecedented ways, and it goes without saying that none of us expected this from 2020. It’s been the weirdest of years, and though things seem to be somewhat going back to what appears to be the new normal,’ the virus is still here among us, and it threatens the way we are and have to do things. But Don’t Worry, you also can Starting Embroidery Business in an Economic Downturn.

It’s a very different time to be alive, and if you are in business, this is the time that your adaptability is tested. Like it or not, you either shift with the times, or your business is phased out.

With everything going on, how then do you start a business at a time like this? And if you are into embroidery, how do you kick off your embroidery business and make sure that you are off to a good start? What are some of the things you should do to be on the safest side of things, and are there missteps that you should steer clear of?

Well, this article goes into great detail, sharing all you need to know and do to be able to start and run a successful embroidery business during such an economic downturn. Put in another way, we’ll take you through how to set up an embroidery business that survives harsh economic times.

It’s also important to note that some businesses are actually blowing up despite all the challenges faced this year, and yours could too. You only need to know where to target and how to run your operations.

So, if you are passionate about the embroidery business and wish to run a successful venture, this article shares important insights into starting an embroidery business, specifically what you should do as a beginner.

The Reasons Why You Should Start an Embroidery Business

Start an Embroidery Business

Some might argue that it doesn’t make much sense to start an embroidery business, but it actually makes sense if you keep the reasons below in mind.

  • Huge Customer Base

Despite popular beliefs and opinions of the masses, which make us believe that no one is into embroidered things or that the embroidery business is already saturated, the truth is that the embroidery business is far from saturated, and numerous opportunities await.

Think of the custom embroidered industry; for example, this a niche whose demands cannot be fully satisfied, not really. There is always a demand for t-shirts from different industries, from the medical and manufacturing industries to supply and security companies.

Keep in mind that millions of small and medium-sized businesses that cannot rely on international supply chains add these companies are forced to leverage the power of the loans taken for their working capital to turn profits. Local sourcing is the only solution for these companies, and you can easily supply your embroidered products to them.

  • The apparel business is recession-proof

Some industries will always do well regardless of what happens in the economy, and the apparel industry is one such industry. So if you are looking for a business idea and can afford one of the best embroidery machines on the market today, we can guarantee you that you will always have clients regardless of the situation in the economy.

Your potential buyers are into custom designs, and they’re always are loads of opportunities that you could take advantage of. Of course, you could also profit from all your local restaurants and the restaurants in the neighborhood. Over the years, the demand for embroidered products has been on the rise, and with the rise in new embroidery designs, you can count on a largely consistent market.

  • Easy Access to Funding

It would be a good idea to start an embroidery business because now, more than ever, you have more access to funding, and there is a long list of companies that you can get funds from.

First, you have your friends and family. For the most part, most people have cut down on their spending and investments, choosing to hold onto their cash for a while rather than invest that cash in the stock market or even real estate. So, if you present an airtight, optimistic proposal, there is a good chance that your people will come through to support your dreams.

You should also note that with the potential that is held in the embroidery business, you wouldn’t have to struggle to pitch an investment idea, as long as your projections are reasonable and the best they can get at the time.

Keep in mind that your investment into the embroidery business will call for the purchase of an embroidery or printing machine. That initial capital investment from your friends and family, plus your savings, will go a long way in getting you started.

You also have access to the best financing rates from lending and financing institutions. And financing your equipment might not be the toughest or the most challenging thing you do this year.

  • Easy access to a wide range of helpful resources

We are past the day of not doing something because you didn’t know how to do it – this cannot happen in the internet age today. People are sharing information all over, and you get to experience the most helpful resources on YouTube, Pinterest, Etsy, and the rest of social media, which really is a slurry of the most helpful information, if only you are keen and know the right pages and people to follow.

Besides learning new embroidery tricks, you will also learn about where to find the best deals on embroidery equipment and tools and how to enhance your craft. So, you really don’t have any excuses.

  • Tax deductions

One of the reasons you could be holding yourself back on starting a business could do with taxes and the fact that you’d have to pay a lot more in taxes. However, this is always the case, especially because you can deduct some of the costs associated with your business from your taxes. But to be sure, you should consult your accountant to make sure that you are doing everything by the book while turning a good profit in the process.

  • Affordable Equipment 

The other motivation behind starting your embroidery business at this time is that the cost of embroidery equipment is pretty much at its lowest and the most affordable. In addition, the barriers to entry and the initial equipment cost for single head or multi-head embroidery equipment have reduced tremendously over the years, largely because of competition and the evolution in technology.

Starting Embroidery Business for a Beginner

 

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If you are passionate about embroidery but you aren’t sure about where or how to start, this next section of the article shares insights into some of the things you should do to get started right.

  • Define your perfect/ target audience or customers and their needs

The first thing you need to do, even before you figure out which embroidery equipment will be the best for you and before you start buying materials, is for you to take a step back and to examine your target niche market, who your ideal customer is, and what they need from you. You also need to figure out how best to meet their needs to break even because you will not make any money out of the embroidery business if you don’t have the right audience and pretty many people to buy from you.

With the right customers in mind, you will stock up on the right materials and invest in the right tools. Determining who your ideal customers are makes everything else easy and pretty much second nature to the rest of your business. If, for example, you’ve determined that your target market is the sorority or the corporate market, you would be able to easily determine the best kind of custom apparel to get out there.

Generally, once you have the idea of what to sell (basically what will happen after some market research) and where to find the customers, you will target the market better and offer the best profits.

Contrary to popular beliefs, running market research is just as simple as searching for the most relevant hashtags on social media to determine what the customers wear and what they need. First, notice current trends of what your audience would like, then find the best ways of meeting their needs.

  • Search for the right embroidery equipment and software

Once you know who to target, you will need to find the right embroidery equipment to run the business with. Find the right equipment and necessary embroidery tools to ensure the efficiency of your business and for you to make good returns from it.

The single-needle machines, for example, might be a good option for you when starting because such embroidery machines are inexpensive. Alternatively, you could opt for the multi-needle embroidery machine if you can afford it, especially because this equipment will allow you to finish your project much faster, and it will return good profits in a shorter time frame.

Keep in mind that in as much as the cost of the equipment might be too high initially, investing in the right embroidery equipment will save you a great deal of money in the long term because you’ll save on the money otherwise spent on labor, meaning that you will be able to pick up larger orders easily.

The multi-needle embroidery equipment, for example, is a preferred investment choice if you are up for embroidering multi-colored designs only in minutes. However, the single-needle option won’t be the fastest option for you because you’d have to swap out the needle in the middle of the embroidery process, and you’d have to run the machine at lower speeds.

The multi-needle embroidery machine is ideal for you if you are looking for equipment that will last long. However, to ensure that you have the perfect embroidery machine, you might want to check out the virtual demos offered by product specialists to ensure the best results.

While you might have to buy some specialty hoops to embroider specific items, it would be a good investment for you to get the job done.

You will also need to invest in the best embroidery software to save money along with the equipment. Throw in a fabric assist tool to go inside the hatch software.

  • Determine your overall business costs

Figure out your business’ direct and indirect costs – respectively, the variable monthly costs tied to the production process and the total number of orders received. The costs remain the same each month, like rent.

For your embroidery business, the direct costs include the thread and bobbin, the stabilizer, labor, packaging, and marketing, digitizing, etc. Then you have the indirect costs, including the cost of machinery, taxes, rent, utilities, marketing, financial/ business management, interest, and supplies, among others. So, if you want to Start A Profitable Embroidery Business, Here’s Our Guide.

  • Register your business

The next important step is business registration. One of the most important things you need to do is to register your business. Doing this ensures that you have access to things like tax-free purchases and wholesale prices, specifically for all the items you plan on reselling.

Some of the things you need to do include filing for the EIN filing for your articles of incorporation in the state. You also need to look out for resale licensing regulations, plus the licensing regulations for the state.

  • Stock up on materials

By now, you have all the basics pretty much taken care of, but now, you’d have to stock up on all the materials you need for your embroidery business.

With the details of the embroidery equipment taken care of, the next thing you’d have to do is to stock up on your needles, the thread, stabilizer, and the blanks needed for the business.

To determine how much you’d need to buy in terms of merchandise, you might want to order the merchandise you need after receiving orders from your customers. This helps prevent overstocking. But it comes with one caveat, the increase in the turnaround times and the potential loss of customers, especially if the wait time is too long. So, it would be a good idea to have some of the materials you need for the business before you start taking orders. Also, work with wholesalers nearby.

  • Create a pricing structure

This is a crucial step in the setup process for your embroidery business because it determines whether you will turn a profit from the business or not. First, come up with a standard pricing sheet for different garments and embroidery designs. Keep in mind that the number of stitches you give each garment will affect its cost.

The complexity of the stitches matters as well. To run things in the right direction from the start, make sure you have a target percentage profit that you must attain – this will be based on the profits you intend to make on an hourly basis and the price of the garment, based on the cost of the raw materials, as well as the time it takes to complete the project.

  • Create a Robust Online Presence

Whether you like it or not, your primary audience is online, and however you feel about the online space, you need to get digital soon. But don’t go in blind. First, determine your unique point of sale and make sure that your social media pages offer all the relevant information about your business and the products on sale – your business contact info must be on the bio. You must post plenty of high-quality photos. Finally, don’t forget to list your business on Google My Business. You will need a website too.

The other considerations to keep in mind include:

  • The skills you need to be able to run a successful embroidery business.
  • Understand your personality. Business owners fall into three categories, the entrepreneur, the technician, and the manager. You will wear these three hats for your embroidery business, and you will start as a technician. First, however, you must remember to make it possible for these three personalities to work together.

Best Embroidery Products to Sell on the Market.

Embroidery Products

1. Business Shirts

To boost brand image and identity and run things more efficiently, many businesses will have their employees wear official shirts with the business’ logo, their names, and positions. Thus, this venture offers a great business opportunity for embroiders.

2. Polo Shirts

Polo shirts and button-up outfits are ubiquitous in the embroidery scene, and if you are not sure where to start things off, the embroidered polos offer the best place for you to start things off. They are urbane, simple, and embroidering these shirts leaves you with more modern pieces. With good embroidery skills, you can easily score embroidery orders from corporates.

3. Jackets

Embroidered custom jackets are pretty much the norm in high schools, middle school, and most education levels. They are also common with teams, and the embroidery work will feature the name of the team, the logo of the institution, and even the name of the wearer. These jackets make the perfect items for promotions and a great opportunity for your embroidery business.

4. Hats and Caps

There is a whole range of caps that can be embroidered, from winter caps and baseball hats, among others. These are important items for sports teams, as well as employees. The hats and caps call for custom embroidery, and it might be one of the areas you flourish in, especially because you get to try out different embroidery styles and designs.

5. Sweatshirts and Hoodies

Custom embroidered hoodies and sweatshirts are among the most common types of embroidered products, with families, corporates, supporters of different causes, sports teams, etc., investing in the best-customized hoodies and sweatshirts identification, and in other cases, brand recognition. Sweatshirts and hoodies offer the highest level of versatility, and you can start your embroidery business by focusing on these as you grow your market.

6. Tote Bags

Totes are every woman’s go-to daily article, a feature that comes about from the versatility presented by the tote bags – this bag carries pretty much everything one needs, and the best part is that tote bags go with pretty much all styles of clothing. Totes are also trendy and eco-friendly.

7. Towels

Hotels need their towels embroidered, and this applies to some families too. And since towels are necessary for bed and breakfasts, resorts, and hotels, all wanting their complimentary towels embroidered, you could focus on sending proposals to the nearest hotels.

Towels are also among the most popular on the list of embroidered items because most people like personalized towels, both for personal use and for gifting purposes. Also, there is a broad category of towels that you could focus on, such as hand towels, bath towels, and specialty towels like pool, golf, and rally towels.

All these towels are useful, and you only need to invest in the best products, including the right digitizing tools, proper hoops and clamps, thread with the right tension, and the best backing materials. It would be best to also come up with samples for different types (materials) used to create towels.

8. Custom Baby & Toddler Blank Apparel

Part of your business could also focus on embroidering custom apparel for babies and toddlers. Again, like the towels, you will need a sample to show off what you can do for different fabrics and some of the best embroidery designs you can offer.

Conclusion

Running an embroidery business at home during an economic downturn might be one of the most challenging things you do, but it is not impossible, and you can definitely return some profits. Choose to focus your services on your community, look for ways of improving the efficiency of your operations, and now would be the best time for you to improve your skills and knowledge.

Read books on different aspects of business, learn new techniques, and basically do different things to boost your business. While at it, focus on giving your clients your very best.

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