by The Embroidery Coach | | Embroidery Business Management
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!
by The Embroidery Coach | | Embroidery Business Management
Happy New Year! Here we are at the beginning of a brand new year. This is my favorite time of year, the time when we an actually start all over again. We can start with a whole new slate and create a brand new plan. Before you can do that you need to think about over the results of this past year. Are you happy with the bottom line result that your embroidery business brought you during this past year? Are you where you thought you would end up at the end of the year? Did your business see growth this year or did it end up about the same as last year? Many embroiderers that I have talked to ended up about the same as last year and are really not happy with their end result. Some of my students that their best year yet! This is what I would like for all embroiderers. I want to talk a little bit about how you can make 2018 a much better year!
Do you make any New Year‚’s resolutions at the first of the year? How do they usually work out for you? I have not made any in many years. I found that I made all of these promises to myself of things that I was going to do, but I did not have a plan to make any of them happen.
Every year at this time I sit back and reflect on what I accomplished during the past year, what I could‚’ve done better and what I will do moving forward into this year! It is always such a feeling of relief and joy when I know that I can start all over again for another year and be able to make new plans to move my business forward in a more positive manner.
This past year was a great year for me but like every other year, I could have done more to make a difference in more embroiderers businesses.
I feel that my purpose in this world is to be able to help more embroiderers succeed in their embroidery businesses and make it easier for them to run their business and not have to go through so many struggles.
There are a few things that you need to do at this time of year to prepare for making this the best year of your embroidery business!
- Find out where you are financially at this time. Without knowing exactly where you are you cannot make plans to move forward based on your current situation.
- Go through your accounting software and make sure that all of your accounts are correct in your computer. Make sure that all of your accounts are totally correct before you do your end of year accounting. This is very important. Sometimes the computer does not always pick up everything or your information may have been saved to the wrong accounts.
- Next, you need to figure out where you want to be at the end of 2015! How much of an increase do you want to see in your business this year? Let's talk about a 25% increase.
- Take that 25% increase over your 2014 year sales and divide it up into 12 months. How much of an increase do you need for each month? Divide that into how much for each week to reach that goal. Your weekly figure is truly the only figure that you need to focus on. It is a much smaller figure than the 25% increase over the entire year and seems more realistic to work towards than a larger figure.
- Create a list of all of the events that you want to be involved in this year that can help grow your business. Lay them out month by month and put a plan together for each of these events.
- If you are having a hard time thinking up ideas to grow your business this year, sit down with your accountant or a coach that can help you put a plan together.
How about this year instead of resolutions, you write out your goals and create a plan to accomplish those goals? Doesn't that sound much better and more doable? It's doable because you can create your own Action Plan and can plan to accomplish small pieces of that goal each week until you have reached your big goal. It is not hard, but it does take consistency and dedication. You can reach that goal if you really want it! You MUST really want it!
For more information on how to set up your accounting system to work great for your decorating apparel business, click here!
by The Embroidery Coach | | Embroidery Business Management
Avoiding a financial crisis is a very important aspect that you need to focus on in your embroidery business to keep it alive and well especially during the slow times in your business. We all go through slow times and you need to always be prepared for it and plan for these times.
In today‚’s world of business, having a superb product, soaring sales and excellent customer service are some of the things that go into making a successful business, but if you do not keep your business financially healthy, all of that hard work will be in vain. Without a sound stable financial position the slightest shock can be enough to send your embroidery business crashing to the ground.
Here are 9 items that can cause your embroidery business to sink and you need to stay on top of each and every one of them in order to avoid a financial crisis and keep your business alive.
Poor Record Keeping
Embroidery Business owners are usually not good record keepers! People who start embroidery businesses are creative and love being in the creative space, bookkeeping is not something that makes them jump out of bed in the morning! They do not get up thinking! Great, I get to do paperwork today!
If you are to keep your business going and growing then you have to accept that there are going to be days that you can‚’t avoid it. You must keep records of your sales, your purchases, your production time, and your inventory.
Without these records you will very quickly lose track of where you are. You won‚’t know:
- What you have spent your money on
- You won‚’t know where your cash is going
- You won‚’t know how much you have in inventory
At the end of every week, you need to check to see if if you hit your numbers for the week. There‚’s a saying.The people who keep records are the people who break records‚so true.
Not Keeping Track Of Your Bank Balance
Do you know exactly what your bank balance is today? Why is it important? If you are going to write a check you must know that you have the money on your account. If your check bounces it can damage your reputation and have a negative effect on your credit. This can cause a struggle when dealing with suppliers.
To avoid this make sure you keep a running total in a check book at all time and even get a line of credit to that you can draw on when the cash flow gets low. This can really help in those slow times, but you must repay the line of credit as soon as the cash starts coming in. There really is no excuse for losing track of where you stand.
Poor Cash Flow
When you are working with your customers and purchasing products for them you need to be asking for at least 50% down and then get the remainder of the payment when he or she picks up the order. If you deliver the order, you must collect the remainder before leaving the products.. You cannot afford to work with your money. You need to be working with your customer‚’s money. Carrying Accounts Receivables can kill your business very quickly.
No Cost Controls & Purchasing the Wrong Things
When you are going to make a new purchase, shop around to make sure you are making the right decision. Compare prices and specifications especially on larger purchases. Have your budget set before you start shopping for that new purchase.
Make sure you spend your hard earned cash on the right things. Your business, in order for it to grow, needs cash. Remove the cash and you remove the life blood which keeps your business alive.
You have to be disciplined when planning a new purchase. Always ask yourself the question, Will this cost add anything to my business? Is it going to help me increase sales? Don‚’t act on impulse; go away and think about every large purchase. If it is not going to help increase your sales, then the decision to purchase a new item is not the right one.
Failing To Make Necessary Cuts
Failing to make the necessary cuts to ensure the survival of your business is something you cannot afford to do. If you have an employee that is doing your purchasing for you, keep a check on him or her to make sure that they are not purchasing more than necessary. If your work load decreases, cut some of your labor costs. Do not try to keep them hoping it will pick up, this will be a huge drain on your cash flow. If you notice you have any type of problem do something about it immediately! Don‚’t sit back and hope things will get better; as a general rule, they do not!
If you a have product or service that is costing you money; get rid of it. Not acting quickly will only compound the problem.
Depending On a Small Number of Customers
Having a small number of customers is not a problem when everything is going well, but if one or two leave you or fail to pay up on time, then this can cause problems.
If you depend on 3 customers and one of them leaves, you are faced with a 33% reduction in sales. Unless you can replace him immediately you may not be able to cut your overhead costs quick enough to avoid any crisis.
You cannot afford for your business to be held ransom. Get out as quickly as you can and get new customers.
The same situation can apply to a business that only offers one type of decoration, such as embroidery. A shift in the economy can cause your customers to decide on a more cost effective alternative and all of a sudden, you have no embroidery. You must diversify and offer more cost effective alternatives to your customer when times get tough to keep your customers coming back for more of what you have to offer!
Not Having a Budget
At the beginning of each year sit down and go over your financial reports with a fine tooth comb, Based on your previous year‚’s income and expenditure, create a new budget. Look to see where you can cut back on or even what to cut out altogether if that is necessary to keep costs in line.
Having a good sound budget will help you make the right decision before making any large unnecessary purchases.
Having a good budget will provide you with the discipline to keep track of your expenses. At the end of every month update it by comparing your budget with your actual expenses. Going through this exercise will help you focus on what your business is actually doing.
No Contingency Plan In Place
All business, large or small need to have a contingency plan for all area of the business. A contingency plan is basically a plan which answers the question, What would we do if this happened?
If you are a small embroidery business and basically a one person business you are at even a bigger risk than a larger business that has several employees. If you are ill for a month or two and could not work, who will help you get through that bad time. Do you have any type of insurance that is going to help pay the expenses and give you a salary in order to help you though this time?
Do you have procedure manuals written for all parts of your business so that someone else can step in and take over that part? You need to have a manual for each area of your business that shows how that part of the business works, how each process is done. This includes your office. If something does happen then someone else can follow your instructions and at least keep it going for you. You need to have instructions written down for the entire business flow. Do not depend on your memory to be able to tell someone else what to do. In a time of crises, your brain does not function as normal and this is impossible.
You must do everything that you can to avoid such a crisis! Having good procedural manuals in place is a huge part of that contingency plan.
Not Talking To Your Bank Manager or Loan Officer
As soon as most people see a financial crisis on the horizon, they try and avoid their Bank Manager or their loan office! This is the first person you should speak to. Bank Managers like to be kept up to date with what is happening in your business. They don‚’t like surprises. When they are kept in the dark they can make decisions that can have a major impact on your business. You must go to your bank the moment you suspect there is a problem. Who knows, he may surprise you by offering to do something to help!
Financial problems can usually be avoided by taking a step back from the business and thinking about what can go wrong. Act as an accountant or a trusted advisor and look at your business in that manner. Once you do that, then you can take actions to put preventative measures in place to avoid a financial crisis before it‚’s too late.
by The Embroidery Coach | | Embroidery Business Management
As an embroidery business owner, you want to offer great products to your customers and have a business that you are proud of, but do you sometimes let perfectionism get in your way of reaching your goals?
Almost all of us strive to do the best job that we can, set our goals and work hard to reach them by maintaining high standards. But perfectionism isn’t about any of this. Perfectionism is a long, maddening drive down a never-ending road for flawlessness; it provides no rest stops for mistakes or personal limitations or even the changing of minds.
I know myself I have fallen into the trap of trying to be perfect far too many times and I always wonder why my son has such an issue with it. He is not happy if every design is not exactly perfect and in his mind, they never are!
Here are 9 ways to tell if you fall into that same trap of being a perfectionist!
- I never do anything halfway; it‚’s all or nothing for me. Every time!
- I believe there‚’s a certain way to do things and they should always be done that way.
- I get angry or defensive when I make mistakes. I hate to make them
- I often procrastinate on starting projects. I seldom meet deadlines. Or if I do, I kill myself meeting them.
- No matter how much I have done, there‚’s always more to be done.
- I believe it is possible to do something perfectly and if I keep at it on enough, I know I can get it perfect.
- I don‚’t delegate often enough and when I do, I always double-check to make sure the job is done right. It never is.
- I feel humiliated when things aren’t perfect.
- I don‚’t like to admit not knowing how to do something or to being a beginner. If I can‚’t do something well, I won‚’t do it.
None of us are perfect, we are all humans that make mistakes and in many cases work constantly toward the goal of being perfect. This is an impossible goal to strive for and we need to let up on ourselves and come to the conclusion that good is good enough! I have been told this over and over by my business coaches and it has been a very hard concept for me to grasp.
It does not mean that you are to be haphazard in your work or that you should not constantly be striving to be better, it just means that we need to be a little more realistic and stop expecting so much from ourselves especially if you are new to embroidery.
Perfectionism can cause anxiety, fears, and self-doubt; it stifles your creativity, and puts stumbling blocks in the way of our friendships and all of our personal relationships. It can also create or aggravate illnesses, depression, obsessive-compulsive disorders and substance abuse.
There is a difference between excellence and perfection. Striving to be really good is excellence; trying to be flawless is perfectionism. Becoming flawless is impossible!
Strive each day to learn something new, work towards improving the quality of your products, offer the best customer service that you can possibly offer and start taking time to enjoy life! Stop letting perfectionism get in your way of accomplishing your goals! Just be great and above all, be happy!
by The Embroidery Coach | | Embroidery Business Management
Is record keeping a priority in your Embroidery Business when you are first starting? When you first start your embroidery business record keeping is not usually the first item on your to do list unless you have an accounting or a bookkeeping background and that is not the norm for the majority of us. You are probably focusing on what you are going to sell, where you are going to get the products that you are going to sell and how you can actually get the customers coming in the door to buy your products!
The task of record keeping is usually put off until you have a need to produce some figures for a sales tax report, your year end taxes or maybe even to go to the bank to borrow some money! Record keeping is one of the last things on our mind and the one task that most people hate to do! We really cannot make any money spending time keeping the books, we need to use that time to produce our products, right?
You need to focus a good percentage of your time producing your products, but if you do not have good records, you have no way of measuring whether or not you are making any money and this does not make any sense. You are in business to make a profit, but if you have no idea as to whether you are actually making a profit or not, what is the purpose of your business?
When should I set up my books?
This needs to be done in the planning stages of your business. You need to be keeping records from the onset of creating your business. How much are you spending on the preparation? You have license and fees that you are paying out setting up your business. You have the expense of getting legal and accounting advice, or at least you should be getting good legal and accounting advice when you are first setting up your business!
What about the supplies that you are purchasing and all of the equipment? What about the preparation of the room or location of your business? These are all costs that need to be kept track of right from the very beginning.
Why is it important to work with an accountant?
When you are in the preparation and planning stage of your business you need to go over your plans with an accountant. They will be able to see if you have any holes, so to speak, in your plans and will be able to guide you in the right direction. Your accountant will be able to advise you on which accounting software to use and help you set up your books properly. In today‚’s world most businesses are using QuickBooks. It is very important to be using the same software as your accountant because it is will make easier during the reporting reports within your business. It will be quicker for them to create your statements and will be more cost effective for you.
You want to make sure and tell your accountant that you want to keep track of individual departments within your business so that this will be set up properly. Sometimes you have to educate your accountant as to exactly what you will be doing. They may not understand the embroidery business and how it is not like every other business and that you need to keep track of the individual departments within the business. What I mean by individual departments with Embroidery, Screen Printing, Heat Transfer, etc. You need to know at all times if you are actually making any money within each one and how much of a profit you are making. Without good record keeping you will have no idea if you are making a profit or losing money.
If you have started your business and do not yet have an accountant, I would advise that you make an appointment with one right away and discuss your situation. Before you visit an accountant, you will want to have all of your records in order so that they can see exactly where you are. This does not have to be complicated. You can use simple spread sheets like Excel to get this process started. Do not go to an accountant with a shoe box full of receipts. This is not the way to get started with an accountant and it will cost you more money. They may not be able categorize your expenses in the right area.
To keep it simple create a spread sheet for each department. This will make it easier to set up your books in the proper manner and you will have your expenses in the correct categories. This will also make it easier for your accountant to understand about each department.
Keeping accurate records is very important and at a glance, you will know how your embroidery business performed for the previous month. Good record keeping should be a priority from the very beginning of starting your embroidery business and a task that should be done by the business owner for at least 6 months before you delegate it to someone else. At that point you can start working with a bookkeeper to keep your records for you, but you need to have your month end report within the first 2weeks of the current month. By keeping track and staying on top of your record keeping you have a much better chance of having a successful embroidery business!.
For information on setting up your bookkeeping program to give you the records that you for your embroidery business, click here!
by The Embroidery Coach | | Embroidery Business Management
I found this Great Gmail Shortcuts Cheat Sheet in my email today. This is going to be a very helpful item! A very helpful item to get the most of Gmail. I will be using it to navigating through Gmail!
