Turn your embroidery hobby into a business

Turn your embroidery hobby into a business main image

Embroidery BusinessIsn't it amazing at just how much embroidery is around us? It's everywhere and more and more commercial embroidery is being provided by home-based embroidery businesses. In fact many of the larger embroidery businesses struggle to cater for the changes in consumer demand. Anyone who has ever tried to have 5 shirts embroidered by a commercial embroiderer may have noticed three things:

  • They were not too keen to do the job 
  • They probably quoted quite a high price 
  • There was probably a lengthy wait to get the job done

Obviously, this does not apply to all embroidery companies and there are many fine businesses that have adapted to the changing industry. But there is indeed a shift to small run embroidery and this is why home-based embroidery businesses are becoming so popular.

Are you already offering a 'paid for' embroidery service?

  • Have you ever been asked to embroider anything for someone other than your immediate family and close friends?
  • Do you notice how it usually turns out to be a love job and becomes bigger than Ben Hur?

The fact is that if you have embroidered for someone else you are already offering an embroidery service. You just haven’t charged for it! In reality, most people are happy to pay for an embroidery service, even if it is a friend of a friend or a distant family member. Maybe charging your children, parents or close family and friends might be a little out of the question but when you think about the time, effort and of course the cost of this hobby, why not consider a simple charge for your efforts whenever you can.

You may be surprised at just how much income you may be able to make from a little embroidery each week. At the very least, it's a handy way to help fund your hobby and cover your out-of-pocket expenses.

The embroidery business is very much a networking business and the simple process of handing out business cards to family and friends can often be all you need to do to kick start your very own home embroidery business.

Am I capable of providing a professional embroidery service?

Absolutely!! You would be surprised at just what knowledge you already possess. But the secret is to stick to the basics. Knowing about basic stabilizers and correct hooping techniques is a great way to start. Combine this with quality designs and a good machine and you have a great foundation to build on.

The Brother PR650 Entrepreneur

Is the perfect solution for both Home and Small Business Embroidery This is why we are so passionate about this wonderful machine. It is the ideal machine for anyone who is ready to upgrade to a top of the range machine. It gives you the best possible results for home embroidery and is an ideal machine to run a home-based embroidery business should you ever wish to do so. They are easy to operate, take up very little space and free up your time. The only regret multi needle machine owners ever express is that they did not upgrade sooner. So if you already have one - fantastic! If not - it is worth considering!

Do I need to be a 'qualified embroiderer' to run a home-based embroidery business?

No, there is no requirement at all. You do not have to have a Trade Certificate but of course you should feel confident in your own ability to provide a quality outcome. Echidna Sewing Products can ensure that you do just that.

Do I need an ABN? (Australian Business Number)

If you plan to procure an income (profit) from embroidery then you will most likely need to apply for an ABN. But nevertheless we recommend that you talk to your accountant or a business adviser to ensure you meet any necessary requirements.

Do I need to be able to digitise customers' designs?

While it is certainly convenient if you are a proficient digitiser, it is by no means a necessity. In fact you would be surprised to learn than many successful commercial embroiderers do not digitise their own designs. They often out-source to professional digitisers and pass that cost on to the customer. This allows the embroiderer to focus on what they do best - embroidery!

What does it cost to outsource designs?

Again this is a variable expense that depends on the complexity of the design or logo, but typically you would allow between $25 and $200 per design. Nowadays, with the internet and emails, this process is fast and efficient and often designs can be provided within 24 hours of submitting them. All you need to do is load the design and start embroidering.

If I do my own digitizing should I charge for it?

Most definitely. Even if the digitizing requirement is a simple text logo which takes less than 5 minutes, you should charge a basic setup fee. Many embroidery businesses will have a minimum Set Up Fee for all first time embroidery jobs. A figure of $25 to $40 is common. Remember you have a substantial investment in machinery and software and the set up fee helps to recoup that cost. Naturally if the customer places a repeat order using the same design you would not charge a second set up fee.

Can I use that for commercial digitizing?

Many of the home embroidery software programs do a wonderful and very professional job and are more than adequate for small business embroidery.

Can I use my existing embroidery designs commercially?

Most design companies clearly state their copyright terms on their website or on the product packaging and in general they do allow commercial use. But it is always best to check the copyright terms before using them. If they do permit commercial use, then your existing design stash becomes a Stock Catalogue of designs that potential customers can browse through when looking for design ideas. Using a program such as BuzzXplore, you can easily create a beautiful colour catalogue of all your designs in next to no time.

How do I determine a fair price for my embroidery?

This is a question that we get asked all the time and there is no single correct answer. Everyone has different circumstances and like any business decision, you need to consider your own needs as well as the prevailing industry prices.

Here are some influencing factors when it comes to quoting for embroidery

  • Where are you located?
  • Do you have any competitors near by?
  • What are their basic charges?
  • Is the job urgent?
  • How quickly can you do the job?
  • How big is the job?
  • If a large job, is it practical for you to do or should you out source it?
  • Is it a job you have had little experience with (potentially difficult) or is it a simple job?
  • Are you supplying the garments or items to be embroidered?
  • Is the customer supplying the garment and if so are they of reasonable quality?
  • Will you be digitizing the designs or will they be provided?
  • Do you need to have artwork digitized elsewhere (out sourced)?
  • Is there a likelihood of ongoing work from this customer?

As you can see there are so many variables to consider, but don't worry because you learn very quickly to analyze all of the above in a matter of moments when quoting. But this only comes with experience.

Some influencing factors why customer's choose your service

There are also other factors to consider that will influence the customer’s decision as to whether or not they will accept your quotation. These have nothing at all to do with the job at hand or your ability to complete it.

  • Does the customer like you? Sometimes people just don't gel together!
  • If you invite customers into your sewing/embroidery room, what was their first impression?
  • Does your work environment look organized?
  • Has a competitor quoted lower than you are prepared to go? Don't take on work simply because it's there. It must be profitable for you to do it. Of course if this continually happens then you may need to review your charges.
  • Are you quoting too low?

What does this true story have to do with a home-based embroidery business?

It has everything to do with running any business, especially a small home based business. There is often a temptation to undersell the service you are providing simply because you have the benefits of being a home-based business or because you have lower than average overheads. And while it's great to be competitive, you must be sure not to give away all of your advantage or portray a message of “I'm not very good at this, so I won't charge the normal price”.

The best policy is to be fair with your pricing, fair to your customers and be fair to yourself. If you combine all of this with great service then you’ll be amazed at how a small business can grow.

How do you come up with a price for your embroidery?

Quoting based on stitch count

A very common way to price your embroidery is to use the Stitch Count of the design to be embroidered. Charging a price for every 1000 stitches can give you a scalable starting point. Typically the cost per 1000 stitches can vary from as little as 50 cents to $4.00 depending on the size of the design, the number of colour changes and the number of garments to be embroidered. Usually as the number or size of the stitch count increases the cost per 1000 stitches goes down.

Quoting based on time

Another option is to consider the actual hours involved in the job at hand. With this method, you simply need to set an hourly rate that meets your requirements. This figure should include a portion to help cover your overheads as well as the hourly profit you wish to make. Both methods can be rather unbalanced sometimes. For example, using an hourly rate on jobs with a high stitch count really takes less time for you. The machine continues to stitch while you are free to attend to other tasks.

By contrast, charging by stitch count for small embroidery designs on garments that are problematic to hoop can work against you. Having said that I still prefer to use the stitch count method but I base it on a sliding scale as shown in the table on the following page.

What would I charge if I was using a home embroidery machine?

Running a successful home-based embroidery business with one or more home embroidery machines is simply hard work. The limitations and the lack of efficiency will almost certainly make you lose interest and possibly money. The fact is that you can only charge what people are prepared to pay and this is determined by all of the factors we have discussed so far.

Sadly, I have seen many people give up their dream of a home-based embroidery business because they were led to believe it could be easily done on a home machine. On the bright side however, we have helped hundreds of home embroiderers around Australia move up to the PR650 Multi Needle Machine. Many are now earning a nice income while doing something that they love - Embroidery.

What about business tax and GST?

If you're ready to set up a small business the Australian Tax Office provides all the informatioin you need to get started. The following videos on their YouTube channel provide a great overview of tax  basics without any intensive reading.

Getting started

We hope this article will help you with your embroidery business. There are absolutely no right or wrong ways as there are simply too many variables to consider. We are always happy and willing to assist you so please feel confident to call us with any questions you may have.

We wish you all the best with your embroidery business.