How to Start an Embroidery Business (and Make $105K/Month)

  • by Norm Tedford
  • 10 months ago
  • Blog
  • 1
Foundry PrintShop Embroidery Business

If you’ve been considering starting an enterprise with limitless earning potential, start an embroidery business!

That’s what Forrest Wedmore and his partner Clint Graham did by opening the Foundry Printshop. Forest got into the industry by buying a struggling T-shirt company for $10,000—money he borrowed from a family member.

Since those humble beginnings, he’s moved his enterprise into a roomy 4,000 square foot facility fully stocked with state-of-the-art embroidery equipment.

This year, he’s making a whopping $3,500 a day, which puts him on track to double his growth. In fact, when all is said and done, he’ll have generated revenues in the high 6 figures!

Dive into this article, and you’ll find out every single thing you need to know to start an embroidery business.

You’ll learn things like how to differentiate yourself from your competitors, which embroidery equipment you’ll need, how to start a home-based embroidery business, and so much more.

We interviewed Forrest to find out how he started the Foundry Printshop. He’s got lots of actionable secrets he’s dying to share with you!

Watch both part 1 and part 2 of that interview if you’re contemplating starting a cleaning business.

What Does an Embroidery Business Do?

Embroidered apparel is a business with huge earning potential.

It’s incredibly easy to get started with only a decent embroidery machine, a few other pieces of equipment, and some basic embroidery skills.

Thousands of companies all over the world are looking to beef up their brand awareness. They can do just that with logos that you emblazon on caps, sweatshirts, face masks, and other apparel.

You can also market your embroidery designs to sports teams, schools, clubs, and other organizations and companies.

You could choose to embroider T-shirts, although Forest says this is a business with lots of competition.

Forest says that jackets, hoodies, and fleeces are more profitable. You can even start related businesses like screen printing and T-shirt printing to maximize your earning potential—just like he did!

15 Steps to Your Own Custom Embroidery Business

Here are the precise steps you’ll need to follow to start your own machine embroidery business:

Step 1: Differentiate Yourself from Your Competitors

Forest has found unique ways to make his machine embroidery business stand head and shoulders above all the other embroidery businesses that are his competition. Here’s one way he does that:

One of the things that sets us apart from other print shops is we rarely let the customer provide the garment. We feel like being able to provide the customer with a contemporary garment—something that’s a bit more elevated than if you picked up the phone and called any print shop around town—is a big part of how we stay competitive. And it’s also a big part of where our margin comes from.

By only allowing his clients to buy high-quality garments from him, he accomplishes two things:

  • Keeps his profit margins sky-high
  • Makes his embroidery customers deliriously happy

Here’s what else Forest had to say on this topic:

Go an inch wide and a mile deep in your niche. Instead of trying to be the cheapest and compete with everyone on price, maybe be the specialist. Try to figure out, ‘Hey, what are my competitors doing? What are they good at? How can I work alongside them, but also in my own unique way?

The Best Way To Differentiate Yourself

Say you want to leave your competition in the proverbial dust. In that case, you need to know their businesses, strategies, and services inside and out.

Keep a hyper-focused eye on everything they do so you’ll know what their next move is—even before they do!

By knowing exactly who it is you’re competing against, you’ll be able to ensure your offerings are orders of magnitude better than theirs.

Step 2: Learn Everything You Can About the Embroidery Industry

Woman standing behind embroidery machine

If you currently know nothing about commercial embroidery, you’re going to need to acquire some knowledge about the embroidery industry.

Try to find an experienced embroiderer so he can take you under his wing and teach you what you need to know. You should also read everything you can in books about custom embroidery.

YouTube has some fantastic tutorials on commercial embroidery.

Join embroidery and custom apparel organizations to get the latest news, trends, and tips for starting your embroidery company.

One of the very best organizations to join is the Embroidery Trade Organization (ETA). This association will allow you to take advantage of the market with new training, marketing secrets, and networking opportunities.

You can also attend trade shows to schmooze with suppliers and owners of other embroidery businesses so you can pick their brains.

Step 3: Buy Your Commercial Embroidery Equipment

You’re going to need equipment to start your embroidery business.

The most critical piece of equipment you’ll need to purchase is an embroidery machine. Choosing the wrong embroidery device can hurt your business, so choose wisely.

Another option is buying an existing embroidery business. This saves you the effort of finding a space and purchasing equipment. You can find businesses for sale near you using our searchable listings.

With computerized embroidery machines, the artwork for your design is fed into the computer. You see the embroidery design on the computer monitor and can change the design according to your needs.

If you want to buy an embroidery machine, check out Sewing Machines Plus. They offer such well-known brands as Janome and Juki.

Look for embroidery machines that offer training and support because mastering the software can be difficult.

You can begin on a shoestring budget by buying a home embroidery machine or embroidering by hand. When your business takes off, you can invest in a bigger machine.

Choosing an embroidery machine depends on the niche you’re aiming for.  If you’re doing T-shirts, you’ll need a machine that can do tubular sewing.

If you’re thinking of doing embroidered patches, you’ll need an entirely different type of machine.

What is the Best Embroidery Machine to Start a Business?

For a home-based business, the best embroidery machine is the Janome Horizon Memory Craft 12000.

This is an exceedingly versatile device that not only embroiders but also sews and quilts. It’s super easy to use and is quite efficient, so embroidery projects get completed quickly.

Other Embroidery Equipment and Supplies

Embroidery machines and tables

Here are some other things you’ll need to start your own embroidery company:

  • Caps
  • T-Shirts
  • Polo Shirts
  • Shirts
  • Jackets
  • Sweatshirts
  • Computer
  • Printer
  • Digital Design Software
  • Hooping Boards
  • Specialty Sewing Kits
  • Embroidery Thread
  • Topping Material
  • Backing
  • Bobbins
  • Needles
  • Stock Designs

You can get discount supplies for your embroidery business here.

Step 4: Don’t Take on Too Many Projects

When you start your embroidery business, it’s tempting to take on multiple projects. However, this is a recipe for failure. In the beginning, focus on two or three things so you don’t diffuse your efforts.

Here’s how Forest puts it:

Don’t bite off more than you can chew. Pick the right projects to take on. It’s really easy to get stars in your eyes when you see something come along that looks like you’re going to make money on it because it has a high dollar value tied to it.

Step 5: Don’t Try to Do Everything Yourself

In the beginning, Forest tried to do everything himself.

Forrest working on the laptop

Today, he has come to the realization that he should stick to what he’s good at. That’s the embroidery, screen printing, and graphic designing which has been his bread and butter.

One of the things he contracts out is accounting:

Get a good bookkeeper. That’s really a tough one to kind of figure out. It’s kind of a hard pill to swallow the expenses, but it’s definitely worth it. It took us ten years to figure that out.

As far as bookkeeping services go, I recommend Bench or Bookkeeper.com.

Step 6: Create An Embroidery Business Plan

A business plan is crucial to the success of your embroidery business.

Without one, you’re like a ship adrift at sea. With one, you’ll be able to confidently chart a course from where you are now to right where you want to be with your embroidery company.

You’re going to need the following six sections:

  • EXECUTIVE SUMMARY: This is a quick overview of your business. It’s one or two pages at the most. Wait and write it last, as it’s a summary of the rest of your plan.
  • OPPORTUNITY: This is the place where you tell the world what you’re selling, what problem you’re solving, who’s your target audience, and who your competition is. In other words, the opportunity your business represents to yourself and investors.
  • EXECUTION: Now comes the exciting part—how are you going to seize the opportunity you just described and transform it into a viable business? You’ll also need to include your marketing and sales plan and the metrics and milestones that will track your success.
  • MANAGEMENT SUMMARY: Use this section to list your current team configuration and who you might need to add to make it complete. If you’re already up and running, provide a quick overview of your legal structure, location, and history.
  • FINANCIAL PLAN: Your business plan isn’t finished unless you have an economic forecast.  Here is where you’ll put a cash flow statement, income statement (or profit and loss statement), and your balance sheet.
  • APPENDIX:  If you need space for additional information, you can tuck it in here.

If you need free business plan templates, I would check out the one-page business plan at Fit Small Business. If you need state-specific ones, check out Rocket Lawyer.

If you need help crafting a business plan, check out this resource at the SBA. SCORE also has some resources you might want to look at it.

Step 7: Get Your Licenses and Permits

Embroidery business licenses and permits

Before you can set up your embroidery shop, you’ll need to make a quick call to the various government offices to find out which licenses or permits you’ll need. Some of these offices are federal, some are state, and some are local.

If you’re starting an embroidery business, here are the permits or licenses you might need:

  • FICTITIOUS NAME/DBA: A fictitious name (otherwise known as a DBA, or “Doing Business As”) is a permit to do business in a locality. This permit is required if your business name is different from your owner’s name.
  • LOCAL BUSINESS LICENSE: Some cities or counties require a business license for new businesses, even if the company is already registered with the state.
  • BUILDING PERMIT: If your business is in a new location or you’re renovating an existing one, you’ll need a building permit.
  • FIRE INSPECTION CERTIFICATE: A fire safety inspection certificate is issued after an inspection from the fire department to ensure that your building meets stringent fire safety regulations.
  • SELLER’S PERMIT: This is a permit issued by the state letting you sell products or services and collect sales tax.
  • REGISTER AS AN EMPLOYER: States require employers to register with them as employers for state tax purposes. Specifically, you must comply with state tax regulations for unemployment tax and workers’ compensation.

You can find out which licenses you’ll need for your embroidery company in your state. For more assistance applying for licenses and permits, check out the SBA website.

Step 8: Get Insurance

You’re going to need small business insurance to protect yourself from risk and financial loss in the event of an unexpected catastrophe with your embroidery company.

Small business insurance (or commercial insurance) will help protect your embroidery company’s assets, property, and income. The most common type of policy for small businesses is a business owners’ policy (BOP).

It includes 3 basic types of coverage:

  • Business property coverage
  • General liability coverage
  • Business interruption coverage

My recommendations?

Go with Progressive Commercial, Liberty Mutual, or Embroker.

Additional resources for insurance for small businesses include this article at FreshBooks and this other article at the Small Business Administration.

Step 9: Set Up Your Website

You’ll need a website for your embroidery business to keep existing customers in the loop and explain your value proposition to new customers. A website also helps to drive embroidery sales and boost brand recognition.

First, you need to choose a domain name and secure web hosting. For this, I recommend WordPress. You’ll also need to register your domain name at GoDaddy.

Screen shot of Godaddy website

Next, you’ll need to optimize your website. This will improve your search engine rankings and drive traffic. Ensure your website is optimized for mobile devices since most of your customers will use one to check out your website.

You can use email marketing to send business updates to visitors.

To hone your email marketing skills, read this article at WP Beginner. The US Chamber of Commerce has another terrific article you might want to read before you get your email campaigns off the ground.

Use Word of Mouth Advertising

One of the quickest ways to drum up customers for your fledgling embroidery business is through word-of-mouth advertising.

So, let friends, relatives, and business associates know you’re starting an embroidery company.

Here’s a terrific article to read if you want to learn more about word-of-mouth marketing.

Getting Your Embroidery Business Ranked on Google

Many small businesses salivate at the prospect of getting ranked on the first page of Google.

There’s a compelling reason for this: 92% of Internet users only look at Google’s front page when they’re searching for something.

What’s more, the people who discover your website through a Google search tend to stay on your website longer than visitors sent there via social media.

What more proof do you need that ranking high in the SERPs is good for your business?

If you want to boost your SEO, check out digital marketing agencies or find an expert on Upwork. You should also get a Google Ads account.

Step 10: Harness the Power of Social Media

Promoting embroidery business through social media sites

In just a few short years, social media has emerged as an incredibly effective marketing method for businesses of all sizes.

That’s why you’d have to be a lunatic to ignore the exponential power of social media when you’re considering ways to promote your business.

Here’s one superb way Forest takes advantage of this powerful tool:

I think one important thing is having a strong social media presence yourself. Because your customers are going to want—it’s kind of a collaborative thing—where they want to take advantage of your presence, right? So, something we do a lot, when we feel good about a project, and we know the customer is really happy, we take a picture of it, and we ask them, ‘hey, can we put this on Instagram and tag you? And like nine times out of ten, they say ‘yeah, totally! And then they’ll screenshot it and put it on their Instagram to promote it.

If you want to take a deep dive into the subject, read this article.

Step 11: Set Your Embroidery Prices

Embroidery prices are usually based on a per-thousand stitch rate—which is multiplied by the number of pieces. So, you could charge a fixed fee for every thousand stitches, or an hourly rate.

Here’s an article put out by the SBA for further information about setting prices.

Step 12: Invest Your Money Wisely

Money’s going to be scarce in the beginning. That’s why you need to make some difficult decisions on where you’re going to spend your cash to grow your business.

Here’s Forest again:

I would say that you have to look at it practically, of like, where do I need to invest the money in the equipment to grow my business, and where do I need to kind of bootstrap to grow my business? It’s knowing when to grow and when to just put in the sweat equity.

If you want to read more about budgeting for small businesses, check out this article.

Step 13: Always Pay Your Bills on Time

Woman paying bills

Forest prides himself on making sure his embroidery business remains financially responsible. Here’s what he has to say on the topic:

We always pay our bills on time, which is another very important thing to do if you’re a business, is to have that business credit, that reputation, of paying your vendors on time.

Step 14: Leverage Your Existing Relationships

Forest attributes much of his success to his ability to leverage existing relationships he built up in the previous industry he worked:

So, you know, we had experience with the action sports industry. We started reaching out to that network first. And that definitely, to this day, is probably our largest client group. Look for relationships that are existing. Or, while you’re thinking about starting a business, start building those relationships early on.

In any business, relationships are everything. If you don’t have any, start acquiring some.

If you don’t have that customer base, he recommends this:

It’s really hard to cold call people about screen printing and embroidery because 99% of the time it’s ‘yeah, I do that once-a-year dude, but not right now, and I’m busy.’ So, I think the best way to approach that is to make yourself easy to find. Instead of going out and trying to promote yourself, make yourself very visible. Focus on SEO and your presence with social media. Make products or pilot products with friends and have them talk about them.

For more on building a customer base, read this article.

Step 15: Have Fewer Employees (But Pay Them Better)

Forest believes one pillar of his success is having fewer employees. This way, he can pay the ones he has better. This increases their motivation to do impeccable work:

I’ve always had a belief that I would rather have a few very well-paid people than a bunch of people who don’t really make that because you know, you can really get a lot out of them. I also feel like automation is a really big part of that formula because then one person who knows what they’re doing can run one of these presses and make a couple of thousand dollars. And so, if we’re competing against China and other countries where most of their business is done manually, it’s really easy for us to be competitive—even globally.

He also works hard so that he sets a good example:

Be the gold standard yourself. That’s why a lot of these businesses don’t really work out. I think the people that start them get into them, and they’re like, ‘Oh, I’ll just work hard until I can get someone else to do it.’ And they think after a year or two, I’m going to hire somebody to do all the work for me, and then that person, you can’t either pay them enough, or they don’t really, they’re not the owner of the business. They’re not passionate about it like you are. But if you’re in there setting the standard for what hard work looks like every day, everybody that works for you, okay dude, I see Forest being rewarded, I see him rewarding us, and I see him setting that standard for what needs to be done in the day. I want to match that so I can continue to grow with him.

For more on what you should pay your employees, read this article.

How to Start an Embroidery Business from Home

Woman doing embroidery at home

If you’re strapped for cash, you can always start your embroidery business from home. You’ll need a clean space that’s big enough to hold your embroidery machine, computer, and embroidery supplies.

You probably should purchase a computer that’s entirely dedicated to your at-home embroidery business.

In other words, don’t use your personal computer. That’s because this way, essential business files won’t get deleted, and you’ll be better organized so your embroidery operation can run at peak efficiency.

You’ll also need some office space to store files and for doing administrative tasks.

How Much Money Can You Make with an Embroidery Business?

Forest’s breakeven point is $1,200 a day:

This business is worth more than I ever imagined it being. I would think that if you were good at this, you could probably [break even] in two-and-a-half to three years.

After that point, everything you make is pure, unadulterated profit!

On an average day, he makes about $3,500 in embroidery business income.

On a good day, he makes $5,000 or more!

Final Thoughts

I just told you everything you need to know when starting an embroidery business.

By doing so, you’ll be following in the footsteps of Forest Wedmore, who’s enjoying the fruits of his hard work by generating revenue measured in the high 6 figures each year.

Wouldn’t you love to experience this level of success?

It’s possible if you follow the steps in this article!

Which strategy did you find most useful?

Let me know in the comments!

Join The Discussion

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One thought on “How to Start an Embroidery Business (and Make $105K/Month)”

  • Ana

    Apparel business or embroidery business is a very competitive industry. Will we be succesful if we bring the same business to that arena? How to make embroidery business unique?

    Reply
  • Tharanga Kasthuriarachchi

    Hi I’m am from Sri Lanka. Currently working in embroidery business in Dubai. I was wondering if you can tell me if I’d be able to start this business in USA?

    Reply

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