Can I earn $25,000 per year doing embroidery?
This question was asked recently by a member of an online discussion group. It is a valid question that anyone planning to open an embroidery business should ask. Your ultimate success will depend entirely on the amount of research and planning that goes into your new venture.
When you think about it, the question is actually quite broad in nature. To adequately answer this question we would need to know many things. Asking if you can make money doing embroidery isn’t enough. Many more specifics would be required to accurately estimate potential income. There are so many factors that can have either a positive or negative effect on earnings.
The most important thing to know is your intended market. Where will your business be coming from? How will you get this business and how much work can you expect? We would also need to know:
- What services do you plan to offer?
- Will you be doing your own digitizing or outsourcing it?
- Are you planning a full time or part time business?
- Will you be home based business or a store front?
- How many heads?
In order to come up with any projections at all we’ll have to make some assumptions. Let’s assume you intend to open a full-time business offering embroidery only services to local customers and will market these services aggressively. You have one single head machine and will be doing your own digitizing in house as required. Your main focus will be on adorning items of clothing and various accessories provided by your customers. You plan to work a total of 40 hours per week in this business. Of those 40 hours, 8 will be devoted to visiting local merchants promoting your business, and 12 hours for digitizing and bookkeeping.
If your intention is to net $25,000 per year, we first must add in some extra for overhead. We’ll use a conservative estimate of 35% to cover all your shop expenses and consumables. Expenses may include, but are not limited to, thread, backing, needles, bobbins, test fabric, advertising, software, office supplies and miscellaneous shop expenses such as electricity and telephone.
Your total gross income for the year would have be $33,750 to net you $25,000. Now let’s break that figure down to an hourly level. To do this we’ll use an average embroidery charge of $8.00 per piece.
Here is what you will need to turn out to reach your goal:
- 4,219 pieces per year
- 84.38 pieces per week @ 50 weeks per year (assuming a 2 week vacation each year)
- 4.22 pieces per hour @ 20 hours of actual embroidery per week
Charging for your digitizing services can add to your gross income and offset the number of pieces you must embroider to meet your goal. Your fee base and how much digitizing you do will determine how many. If you offer free digitizing services the numbers don’t change unless you use more than the allotted hours. If so, lost production hours will have to be made up. For example, if you spend 18 hours per week digitizing and test sewing, your production quota would increase to 6.03 pieces per hour to stay on track.
As you can see you will be very busy and may often find yourself burning the midnight oil to complete projects on time. Four to six pieces per hour may not sound like a lot right now, but when you consider the number of possible variables associated with hooping, trimming, machine malfunctions, family obligations and so forth it really is a tall order. Remember, you must maintain this pace 40 hours per week for 50 weeks to achieve your goal.
There are other variables that could affect both production and profits. On the negative side, expenses such as repairs and additional equipment purchases could take a bite out of your profits. Large designs can be a big factor as well. Sewing out large designs with18-20 thousand stitches could take as long as 25-30 minutes each depending on machine speed. With a single head it would be impossible to meet your quota without working a lot more hours!
On the positive side, purchasing goods at wholesale and reselling them to your customers at retail prices can increase your profits. It can also lower the cost of replacements if damage occurs and reduce the total number of embroidered pieces required per hour.
There is little room for error. Any major set backs will cause you to either miss your goal entirely, or work many more hours than you intended. More heads would allow you to increase the number of pieces you can turn out each hour and decrease the number of hours you must actually work.
The first year or two may be lean until you establish your business and secure a good customer base. To reach your goal you will need a solid group of customers that supply you with large orders on a regular basis. Depending on a handful of friends and neighbors that bring by a few towels to monogram now and then won’t help much at all. And don’t forget, once established you will need to visit your customers on a regular basis to maintain their loyalty.
Keep in mind it is not my intention to discourage anyone from starting an embroidery business, nor is this article meant to be a definitive guide for potential earnings. It is merely an example of what you can expect using average estimates for a narrowly focused venture.
If you are thinking about starting an embroidery business the first thing you should do is formulate a solid business plan. The short list below should help you get started on that plan. Add to it as necessary.
- What are your financial goals?
- What investment will be required to start your business?
- What are you best at doing?
- What would you rather not do?
- What specific services will you offer?
- How much will you charge for these services?
- Will you work from home or have a store front?
- How many heads will you have?
- Where will you purchase your supplies?
- How much will you allot for advertising?
- Where can those advertising dollars best be spent?
- Check your competition. What do they offer and for how much?
- Can you establish a niche market in your area?
- Establish a good customer service policy.
This list is by no means complete, but it should give you a basic idea of the things to consider before you open the doors to your first customer. Making $25,000 or more per year doing embroidery is possible, but it will require a tremendous amount of work. You must approach it as a business rather than an extension of your hobby. Expect it to be a full time job and nothing less.
If possible, talk to others you know in the business. Ask them how they got started and what they would do differently if they were starting their business today. We all learn from our mistakes and often from the mistakes of others.
Do not jump into anything blindly. Consider what could go wrong because it usually does. Study your market and your competition. Learn as much as you can before making your final decision. Search for a niche in your area. If you can do something different or better than everyone else it will aid in your success.
Best of luck to you!
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