More Embroidery Business Profits By Controlling Costs!

by | | Embroidery Business Management

Every embroidery business owner wants a profitable embroidery business. Controlling costs equals more embroidery profits. Whether you are just starting your embroidery business, trying to grow your embroidery business, or want to create a more profitable embroidery business, learning how to control costs is extremely important. Controlling or reducing your costs can create the difference between losing money, breaking even, or creating a small or large profit. There are 3 costing factors that you must be aware of and keep a good eye on at all times that will help to reduce these costs.

  •  Production Costs
  • Inventory Costs
  • Production Wastage or Spoilage Costs

How To Cut Your Embroidery Production Costs

You must carefully analyze all of your Production Costs! You should know what each and every piece of your production is costing you. Review all of your production processes to see if there is a way for you to develop an easier method or a shorter time for each one of your processes.

If you have not done so in the past, start timing each of your processes. Each operator should be carefully observed as they are performing each step. Maybe there is something that was missed in their training. Are they are taking an extra step that could be cut out? This is very important. Each job process should be timed over and over to determine the most efficient way of performing that task.

Each separate process of the job should be kept track of from start to finish to determine its true cost. An easy way to do this is having your operators punch a time clock at the beginning and end of each process. An inexpensive time clock can be purchased to be placed in the center of the production area for this purpose. This will not be the same time clock that is used for clocking in at the beginning of the day. That clock needs to be in the entry way as they come in the door.

When an employee knows that they are being timed, they have a tendency to move quicker and more efficiently. It is very important to start this process from the time that the order is taken until it is shipped out of the door. You over look a lot of time that it actually takes to produce that finished product if you are not carefully tracking every single movement and moment of time.

This is an area of your business where the Production Costs can really make a huge difference. Therefore, controlling costs equals more embroidery business profits!

Click here to read about your Embroidery Business Inventory Costs and Production Spoilage Cost.