by The Embroidery Coach | | Embroidery Business Management
One of the main reasons embroidery businesses fail is the lack of cash to run their business! Managing cash flow in your embroidery business when you are first starting or trying to grow your apparel decorating business can be a challenge. Most new embroiderers are new to embroidery and do not have the business education that teaches you about cash low or even now to run a business.
When I first started by embroidery business I did not have any business training at all and I was extremely naive when it came to business. I trusted everyone and I knew without a shadow of a doubt that I would not have any trouble trying to collect my money.
When a customer placed an order with me, I did not even ask my customer for any money up front. I was so excited about getting the order and I knew that my customers were just as excited about placing an order and would be very anxious to come back to pick up their finished products with money in hand of course.
I used my money to purchase their items, embroidered them and then waited for them to come back to pick up their finished products. I was actually afraid to open my mouth and ask for any money when they placed their order. After being taken advantage of a few times, I discovered that this was a wrong approach and if I was going to survive, I would have to be a little braver and speak up!
Let me ask you some questions.
-
- Do you fail to ask for money up front?
- Do your customers always pay you on time?
- Do you have Accounts Receivables higher than you would like to see it?
- Do you ever have a time when money is tight in your business?
If someone asked me those questions when I was first starting to grow my business, I would have had to answer YES to every single one of them. My bank account was very rapidly dwindling instead of growing and I had to make some changes quickly or I would have to go out of business!
I learned very quickly that I needed to ask for a down payment or deposit on their order as soon as they placed it. The next question was, how much should I ask for? I started out by asking for 50% down and soon discovered that it was not always enough. You need enough to pay for the products when you place your order so that you are not using your own money to fund their order. Many times the total order for their garments is higher than the 50%, so I started asking for the full payment of the products that they were ordering. This gave me enough money to order their products, and it would help me to have some money to work with for their embroidery as well.
When you have an order that your added embroidery or other embellishment is more than the price of the garment, the 50% down would be adequate, but when you are ordering expensive items such as leather jackets, the 50% is not enough. Quickly figure out what it is going to cost you to order the customers products and ask for that amount of money. You cannot run a successful business using your money to purchase your customers products.
When it is time for the customer to pick up the order, call him or her and tell them their order is ready and they will need the remainder of money that is due when they come in to pick it up. If you are delivering the products, let them know that they must be paid in full before you can leave their order. If you are shipping out the order, then you must be paid the remainder before the order can be shipped.
I have had customers get upset with me when I told them this because they were planning on not paying in full upon receipt. When that happens, they are not a good customer and it is questionable whether or not you should continue to do business with them.
A small apparel decorating business cannot survive if they are working with accounts receivables and are always waiting for their money to come in or hoping that it will come in. It does not always happen or happen on time and you end up with a cash flow problem.
The number 1 way to manage cash flow in your embroidery business or apparel decorating business is to ask for at least 50% down for each sale and collect the remainder on delivery or pickup of the finished product!
Do not allow yourself to have to answer YES to any of those questions! There is no need to deal with issues of cash flow in your embroidery or apparel decorating business!
by The Embroidery Coach | | Embroidery Business Management
Your Embroidery Business Once In A Lifetime Opportunity!”
This Embroidery Business Lifetime opportunity does not come your way very often. I want to offer you something really special to celebrate the end of the year and the launch of The Embroidery Training Resource Center‚ that you absolutely will not want to pass up! What a wonderful Christmas gift this would make! Can you imagine a better gift than all of the information that you will need to grow your embroidery business!
I have built The Embroidery Training Resource Center into the only Embroidery Training Center that you will ever need! The training inside of this comprehensive training site starts with the baby steps of starting your own embroidery business and provides the tools that you will need as you grow along in your embroidery business.
Go to http://www.TheEmbroideryCoach.com for full details! Trust Me! You do not want to miss out on this once in a LIFETIME opportunity!
Along with the Gold Plus Membership you will also be eligible to attend FREE the “How To Price Your Embroidery Workshop” in January of 2013
It is Time To Give Yourself A Gift! A Once In A Lifetime Embroidery Business Opportunity!
by The Embroidery Coach | | Embroidery Business Management, Embroidery Production
Do you have the business organization and forms that help you to run your embroidery business and keep track of your production at all times? When you first start your embroidery business you can become so overwhelmed by all of the forms and processes that are so necessary to keep your entire production running smoothly.
There are software programs that can be purchased to help you keep track of your entire order, but most new embroiderers are not in the position to be able to purchase these programs so you must have a way of keeping track of it manually. I always advise new embroiderers to start keeping track of their jobs manually before going to the computer systems.
Record keeping is so extremely important and there are many forms that I have and keep with each order. You must have a system for keeping track of each step and the forms for each part of your organization or production of every job. Without a good system in place, you will soon become totally overwhelmed with the workload and you will not be able to keep track of your production and it can become very discouraging. I have 3 types of forms
- Office or Sales Forms
- Production Forms
- Shipping Forms
The Office or the Sales Area is the First One That I Will Address.
This scenario is based on the fact that you are an embroiderer that sells retail and may have a retail or showroom in your location. If you are working from home and do most of your orders online or on the phone, the same processes and forms will apply to you as well.
I create sales packets that are ready for each sale so that I can grab them and be ready when I am first starting to work with a customer.
- Customer Quote Form – Can be part of the packet or separate-This form is filled out and a copy given to the customer-your copy is then placed in a binder until the customer comes back in ready to place the order.
- Order Form – I have one for Apparel and one for Caps-You can expand on this if you have different needs.
- Form of Payment -Credit card-Pay Pal-Check form
- Design Tracking & Timing Form
- Production Tracking & Timing Form
- Packing List
- Do you have a checklist to make sure that all of the steps are taken?
These ready-made sales packets make it easy to work with and you do not forget anything as you are going through the entire process with your customer or prospect. Between the Quote form, the Order form and the Form of Payment form, you can collect all of their information and be ready for the sales process. I also have all of their information to easily input it into my database and start marketing to them. This can be in the form of a Newsletter, postcards, emails or a combination of all three.
Order is Ready for Processing
Once the order has gone through the sales process it is ready for the production process. The first step is to be Logged in. This can be done manually on a sheet of paper or in the computer. On the Log In Form, you want to have all of the necessary information to track it through the entire production process, finishing process and out the door! After the job is Logged In the process begins.
- Two copies of the Customer's original order are made and the original Customer Order form is filed away and you work with the copies of the order all the way through production. The goods or blank products need to be ordered. One copy of the order is then placed on a clipboard and hung up so that you can easily see it. I have mine hung over the Login table. This will stay there until the blank goods arrive.
- The other copy of the order goes to the person that will be creating the artwork or embroidery setup for the job. The Artwork will need to be started. The Artwork Tracking & Timing form is used to keep track of all of the time that is spent on creating the artwork, design set up, sewouts and getting approval from the customer. There is a lot of time in this step and it all needs to be kept track of. I have a form, Customer Approval Form that I created that has the embroidered picture of the design on it and the color breakdown so that the customer knows what the color will be for each part of the design. If there are different colors of garments, your color breakdowns may be different. You must have the customer‚’s approval before you start embroidering the garments. This is very important.
- The Artwork person creates a folder that will hold the production information and be followed all the way through production. I have an Embroidery Room Worksheet that the Artwork person fills out. This has all of the embroidery and design information on it, the color breakdowns, how the order will be hooped and run. A copy of the design is then put on a disk and placed inside of the folder. All of this information follows the job through the entire process.
- The blank goods arrive. This is where the Production Tracking and Timing form comes in. Each step of the production process must be timed and kept track of so that you will know what your true costs are at the end of the job! The blank goods need to be counted, inspected and organized in stacks of sizes. Each size will be hooped in a slightly different location so you must have a system of keeping track of the sizes so that they do not get mixed up and hooped improperly. The blank goods must be checked against the packing slip from the distributor and the customer‚’s order to make sure that they match. After they are verified that they match, the distributor‚’s packing slip is attached to the customer‚’s order.
- The garments go to the hooping area and are hooped with the properly sized hoop and the correct type of backing and topping if necessary.
- The job then goes to a staging area waiting to go to the embroidery machine. If you have your jobs hooped ahead of time, you will save a huge amount of production time and can just basically feed the machine. This is when you can really make money.
- After the garments are embroidered, the embroidery machine operator removes the hoops and places the garments into a bin.
- The embroidery machine operator will make notes on the Embroidery Room Worksheet of any changes that were made and other necessary notes that she feels is important. Many times an embroidered garment will be placed on a copier so that they have the exact location pictured or if there is any question about how it was run. If it was a job that was difficult to hoop, that will be recorded on this Embroidery Room Worksheet.
- The Production folder that the Artwork person created is then filed away with all of the embroidery and design information so that it is ready when a repeat order comes in. This makes it very easy to repeat a job without errors.
- The embroidered garments then go to the finishing area for trimming, steaming and packing.
- After the garments are trimmed, steamed and packed, they are then placed in stacks and counted to make sure that you have all of the proper pieces and sizes that match the customer‚’s order.
Job is Finished Ready for the Shipping Process
- After the job is counted and placed in size stacks, the Packing List is created. This will have the Customers Name, Shipping Address, Order Number from the Log In sheet, Box __ of __, Quantity, Item Description, Color, and Size
.
- A copy of the Packing List is made and placed inside of the box for shipping. The original is sent to the Shipping department to have the shipping label created and the cost for the shipping is added to the packing slip.
- This copy of the Packing List with the shipping costs added is attached to the total packet of forms, Customer‚’s Order, Artwork tracking & Timing form, Production Tracking & Timing form and sent to the office to be invoiced.
- The shipping person must go back to the Log In form and add the shipping date.
- The Invoice is generated by the Office person and then she goes back to the Log In form to write in the Invoice Number.
This system gives you a total tracking of all of your processes and helps you to keep on top of your orders at all times. If a customer calls and wants to know where their order is in the processing, it is very easy to find out and give them an accurate answer. This is very important. Customers want and need to know that you are totally organized and on top of their order at all times!
This system works even if you do not have an automated system that tracks in the computer. As your small business grows and you have the funds to add an automated system then you will be ready and understand all of the processes. The automated systems still need to have the accurate information input into them, but they are a huge time saver when you get to that point in your business.
I hope that this basic process will help you as you are getting your Embroidery Business organized and getting all of the forms necessary for you to keep track of your production. All of these forms are available inside of my Embroidery Training membership site. I have 4 levels of membership. Go to http://TheEmbroideryTrainingResourceCenter.com and see what level is the correct one for you. Most of the forms are inside of the Silver level.
by The Embroidery Coach | | Embroidery Business Management
Starting a new embroidery business today is much easier than it was in the past, but there are financial pitfalls that you need to be aware of and avoid at all cost. Many embroiderers start their business because they want to be able to work from home and have an income without the daily grind of the corporate world. Unfortunately many of these new embroiderers were not business majors in college or have never been exposed to the inner workings of a small business.
Many times a new business owner will not be aware of the pitfalls until they are in business for awhile or seem to slip into financial trouble with their business. The three most common pitfalls are:
- Not knowing what your true costs are for running your business!
- Trying to stay in line with the competition!
- Not keeping track of your time!
Not knowing what your true costs are for running your business!
There are many costs that are associated with running your small business and each and every one of them needs to be accounted for. You must know what all of your true costs are. You have to keep good records of everything that you spend on a daily basis and keep track of it in a spread sheet or an accounting program. This is a must in order to get a handle on all of your true costs. Some of the common ones that often slip by are:
- Keeping track of your mileage when you run to the post office
- Keeping track of your mileage when you go to the office supply store
- Cleaning and maintenance supplies
- The rent of the room or rooms in your home that you are using for your business
- The utilities that are used in your home for your business
All of these factors may seem small but they are part of your costs and without them, you cannot accurately create a pricing structure that is going to help you pay the bills.
Trying to stay in line with the competition!
This is a huge mistake! This is a big pitfall thinking that you have to be in line with the competition on your pricing. Everyone has different expenses and needs and it is impossible for them to charge the same thing that the competition is charging and be able to make any money if that competition has less expenses. This is a tough one for the new embroiderer to understand. You have to charge according to your expenses and what you need as a profit. You cannot work with someone else‚’s pricing.
Many new embroiderers will call all of the local embroiderers and collect their prices lists to find out what they are charging. They will then take all of them and average them out. This is what I did when I first started my business and it caused me to almost lose my business! Not a fun time!
Not keeping track of your time
One of the biggest pitfalls is not keeping track of their time. Many embroiderers do not keep accurate records of all of the time spent on each and every job. Each step of your job is costing you money. Keeping track of how long it takes to prepare your jobs for production, how long to set up your designs, how long it takes to unpack a box of goods that come in, and how long it takes to finish a garment after it comes off the embroidery machine are only a few of the time sucking steps in your business that are many times not accounted for. Most embroiderers charge by the stitch count and all of the other pieces of the job are done for FREE!
So many new embroiderers do not consider what their time is actually worth especially if they are a home-based business. You also need to know how to price your other decorating options and most new embroiderers do not charge enough for those to make a profit and sometimes not even enough to break even.
There are many hidden costs that new embroiderers are not aware when they are first starting their business and keeping a close eye on all of your financial data is the only way to avoid these common pitfalls that can totally ruin your business!
Remember, know what all of your true costs are, create a pricing structure that will pay the bills and create a profit for you and keep track of your time. Don‚’t forget that old saying you heard many years ago, Time is Money. It truly is!
If you are suffering from any of these issues, Learn how to create your own Pricing Structure that will help you increase your business and avoid all of these pitfalls.!
by The Embroidery Coach | | Embroidery Business Management
Having a system in place to help manage your embroidery business is extremely important! Common questions that have been asked by my students when they are trying to organize and manage their business as they are starting or growing their embroidery business are:
- How do I manage my business?
- Where do I go to get the help that I need?
- How do I know what I will need?
- Where should I Start?
- Is there some type of software that I can purchase to help me?
So many people that start an embroidery business do so because they love what they do and are very creative. I was one of those people. They do not even think about what it takes for the business side of the business. There are certain components that every business needs in order to run smoothly and create a profit.
One of the main components is a system for daily checks and balances to see if you are profitable. It is very important that you learn how to manage your entire business and it starts on a daily basis with each and every job. Whether you are a one person operation or a large apparel decorating shop, there are some important factors that must be present in whatever type of business management system you choose.
- The ability to create and deliver a quote very quickly
- A way to follow up on the quotes in a timely manner
- The ability to measure the progress of each order as it goes through each and every process.
- A way to measure your production
- A way to measure your profitability
- A system to keep track of your acquisition of goods
- A way to schedule your production
- The quick way to see if you can handle a rush order
- The ability to create a repeat order so there are no errors in ordering or production
- A system to see how quickly your money is coming in.
I have found that many businesses do not have any type of system in place to help manage any part of their apparel decorating business. You can create your own management system or you can use one of the Business Management Software packages that are easily available for the apparel decorating industry. Either way, you must have a system for checks and balances. This is a must in order to manage your growing business and become profitable at the same time.
Choosing The Best Type Of System For Your Embroidery Business
There are several business management software packages available today but there are also many price ranges within these software packages. You need to know what is important to you and your business in order to be able to choose the right package. Each business is different and has different needs.
You need to create a total snapshot of your entire business before thinking about which type of system or package you will need. Take an analysis of all of your business needs and answer all of the following questions.
- What type of software are you using for your accounting at the present time?
- How many employees to do you have?
- How many different types of decorating does your business offer?
- How many customers do you have?
- What type of business, wholesale, retail or contract?
- Do you offer products along with your services?
- Are you a service business only?
- What are your monthly sales and revenue?
- Do you have a concrete pricing system in place?
- Do you know what all of your actual costs are in your business that are associated with each different type of decorating that you offer? It is very important that they be separate in order to have true costing and pricing.
- Do you have a concrete way of planning for future growth?
- Do you have a way of measuring your growth and profitability?
Some of the Business management software companies have starter packages or entry level packages that will handle your quotes and invoicing. This is not enough to get you started, in my opinion. You must be able to provide your customer with a quick quote, but you also need to be able to take that quote, turn it into an instant work order and then into an invoice when the job is completed.
Many of the business management software packages will integrate with QuickBooks. If your business is a large shop with more than 10 employees, you may want to look at one of the packages that is a stand-alone package that will handle all of your accounting needs. If you are a small shop you may want to start with one of the less expensive packages that will integrate with QuickBooks to accommodate all of your needs. When you are looking for a business management software package, you want to make sure that they contain each component that is necessary for your particular business but each package should contain the following components.
You want to be able to manage everything in your business with or without software, but having a software package makes it much easier to manage all aspects of your business. No matter what type of a system you adopt to use in your business, make sure that you have a system that will help you to create quotes in a hurry, measure the progress of each job, measure your production and measure your profitability. If you cannot measure it, you cannot manage it!
Joyce Jagger
The Embroidery Coach
by The Embroidery Coach | | Embroidery Business Management
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