If you want to have a highly successful business, there are 5 Golden Rules you need to follow when you build an embroidery business that will help your business sustain the test of time. Whether you are just starting out with your embroidery business or if you have had your business for a while and it is not where you want it to be, I highly advise all embroiderers to live by these 5 golden rules.
Rule No. 1 – You are in business to make money!
Do not forget this! That is the most important rule to remember when you build an embroidery business. You have a business just like any other business person has and the main object is to make money and provide a living for yourself and your family.
Rule No. 2- Always require a 50% deposit plus the design fee before starting any job!
Far too many embroiderers use their own money to work with and then when the order is picked up, they hope that they will get their money in 30 days. DO NOT WORK LIKE THIS!
This is the fastest way to fall behind and run out of money. You are not a bank and you cannot finance people’s orders. If you are working with large companies or doing contract embroidery, they will generally not pay upfront, however, they must pay within 30 days or you do not start the next order until they are paid up in full. If they drag out their payments, drop them as a customer, you cannot afford to work like this under any circumstances.
Rule No. 3 – Do only Corporate or Retail Embroidery!
Do not do contract embroidery unless you have several multi-head machines and have at least 50% of Corporate or Retail work coming in to help build up your profit! Corporate is when they are paying a higher price plus you are selling them the garments as well as the embroidery. Retail is when the customer such as a small business, club or organization bring in the garments to you and asking you to embroider on them. Retail is your highest priced customer.
Rule No. 4 – Create a price list that you know you are making money with.
Make sure you have all of your expenses covered, a paycheck for you plus profit built into your equation. Creating your price list is not hard, but it does take a little time. Create different price lists for different scenarios. The corporate customer, or the customer that purchases the garments from you as well as the service should not be charged as much as the retail person that brings in the garments to you to add the embroidery or whatever service you are providing. Charge the retail person at least 25% more for the service than the corporate customer.
Rule No. 5 – Always Complete the Customers Orders On Time!
When you start an embroidery business or if you have had a business for awhile and you are struggling with trying to get repeat customers, this may be an issue for you. On time delivery is extremely important if you want to have a profitable embroidery business. All orders should be completed on time or ahead of schedule. If you run into a situation where this is impossible, you must let your customer know what the circumstances are and be honest with him or her. If you have a good scheduling system, this should not be a problem.
When you start to build an embroidery business, if you will remember that you are in business to make money, always require a 50% deposit, focus on Corporate or Retail embroidery, create a profitable price list and always complete your orders on time, you should be able to build a very profitable embroidery business! Print out the “5 Golden Rules You Need to Follow When You Build an Embroidery Business” and review them every morning before you start your day!
To receive some help or guidance in starting or building your own success embroidery business, please Click Here to reach out to me. I am always anxious to work with embroiderers and help them reach the success of their dreams!