The idea of having your own embroidery business is fun and exciting but when you first started your business, did you stop to think about the business end of setting up your embroidery business? You were excited because now you were going to do something that you love to do, day in and day out! The business end is one of the most important parts and the only part that is going to help guide you in growing your business. I am going to go over some simple steps for embroidery business success that if you follow, you can truly get your embroidery business set up for success!
Now that you have been in business for a while, is it going the way that you had envisioned? Do you have the right systems in place to help you keep track of the progress of your business?
Most embroiderers or most people that start any type of decorating apparel business, only think about being able to provide a lot of people with their unique embroidered or decorated apparel products. Most embroiderers are born creators and are not business oriented, but unfortunately, part of owning a business is setting up systems for your business that help you keep track of your business and stay on top of. This is essential in setting up your embroidery business for success.
Here are some questions that I get over and over and maybe they are the same questions that you have on your mind.
- Is it necessary to have my pricing set up before setting up my bookkeeping system?
- When should I start setting up my bookkeeping records?
- How do I organize all of this paperwork?
- What tools should I use for keeping track of my orders?
- What type of records do I need to get started?
- Do I need an accountant to help me set up my bookkeeping system?
Is It Necessary To Have My Pricing Set Up Before Setting Up My Bookkeeping System?
No, it is not, but it is to your advantage to have your pricing set up because it is going to save you a lot of time with not only invoicing but in creating higher profits. Chances are if you have not gone through my “How To Price Embroidery” program, you are not creating the profits that you could and should be making. This is very important. After completing the “How To Price Embroidery” program, many of my students have realized that they did not have their pricing done correctly and when they created their new price lists for each area of their business, their profits increased dramatically.
This is your first step in setting up your Embroidery Business for success! This can be done very easily and I teach you step by step throughout the program. You can also use this program to create a price list for each service area of your business in addition to embroidery. Most embroiderers also offer other services such as screen printing, heat press applications, promotional products, and even alterations. You want to make sure that you are creating a profit with each area of your business.
When Should I Start Setting Up My Bookkeeping Records For My Embroidery Business?
This needs to be done in the planning stages of your new embroidery business. You need to be keeping records from the very onset of creating your new embroidery business, but if you have been running your business without setting up your bookkeeping records, it is time to stop and get this process started. You need to keep track of all of your start up expense.
Many embroiderers that work from home, feel that they have no expense because they are working from home and they paid cash for their machine, but this is a totally wrong way to think. You have expenses that need to be kept track of and must be part of your pricing system right from the beginning of setting up your business whether you are working from home or have a storefront or are adding embroidery to an existing business.
How Do I Organize All Of This Paperwork?
Organizing your paperwork is vital and must be done before you can start setting up your bookkeeping system. Here is a simple step by step process that will help you organize all of your paperwork to make it easy to get started.
Step 1– Separate the receipts for your expenses and for your income. Make sure that you have every little piece of paper because it can make a difference at tax time.
Step 2– Take the pile of receipts of your expenses and separate them by the month. Do the same for your income.
Step 3– Separate the piles of expenses and income for the first month into piles of like kinds.
Step 4- Create a spreadsheet with columns of the like kinds for your expenses and add the receipts into each column that is applicable. By like kinds I mean, Office supplies, Utilities, Embroidery supplies, etc.
Step 5– When finished with the month, place the receipts into a file folder marked by the Month and place the file folder in a file drawer. Keep one file drawer for this purpose only.
Step 6– Repeat this process for your income statements.
Step 7– Total each column of expenses for the month. Do the same step for your income.
Step 8– Repeat this process on a separate spreadsheet for each month. Make sure you have a printout of the months spreadsheet added to the folder.
Organizing them in this manner will make it easier for you to start the process of working with bookkeeping software. I know that bookkeeping software may be something that you are not familiar with or have not used to this point, but it is not as hard as it seems. It is simply a system for keeping track of all of your records. Organizing your expenses and income records is the first step.
What Tools Should I Use For Keeping Track Of My Embroidery Orders?
Your number one tool or the number one tool that I recommend is QuickBooks.
I have been in the embroidery business for almost 40 years and I have used many tools and have developed many systems that made a huge difference in my business. One of the most time-saving tools that I have found was QuickBooks. I started using QuickBooks many years ago, but I have since developed my own way of using QuickBooks and have since created a program around QuickBooks for other embroiderers. This same system that I created, Embroidery Business Bookkeeping System, and have used for many years helps me to know at all times:
- Exactly how much work I have in-house.
- Which department within my embroidery business is making money.
- Exactly which department or service is not making any money and it helps me make the right decisions as to whether or not to keep that particular service or remove it from my business.
You will also need a scheduling system to help you stay on schedule and be able to know how long each job is going to take. This is very important in being able to plan out your production and stay on track. The Embroidery Production and Scheduling Program is another system that I have created, and I can look at my production schedule and know exactly how many hours of work I have in house at all time and how long each and every job is going to take.
What type of records do I need to get started?
- A list of all of your customers
- A list of all of your vendors or suppliers
- All of your expenses organized
- All of your income
- A list of the different services that you offer, such as embroidery, screen printing, DTG printing, sewing, heat press services, etc.
With my new Embroidery Business Bookkeeping System, I show you how to create a chart of accounts that set your business up in the right departments to make it easy and you can instantly see what is happening in your business. Once your QuickBooks is set up using my system, you can save a lot of time and know where you are at all times in your business. This system will help you increase your cash flow because you can collect money faster and easier when you follow the system.
- When you receive an order, you log it into your system with Pricing and all of the information about the job.
- Once the job is completed, you can instantly create your invoice.
- You send this invoice immediately to your customer instructing him or her that their order is ready for pickup and make sure to have the right amount of cash, check or a credit card with them in order to be able to pick up their order.
- At the end of each day, you will run a report to see what jobs are still in-house.
- At the end of each week, you can create your schedule for the next week based on all jobs that are still in-house.
- This makes it easier to schedule all new jobs that are brought in during the next week and you will know immediately where you can add rush jobs.
Once your accounting system is set up correctly, this is all very simple. Obviously, there is a lot more to this system, but these are the basic steps that will help you bring in cash a lot quicker and with less hassle. Following this system, makes accounting a lot easier, and saves a lot of time, especially if you are a small home-based embroiderer and are doing all of the jobs yourself.
I have found that the easiest version of invoicing software for me is QuickBooks Online. I love the fact that it is always updated and I do not have to worry about my invoices getting to my customer on time. I can check on a job even when I am in the field because it is online and not on my desktop.
Do I need an accountant to help me set up my bookkeeping system?
No, you do not need an accountant to help you set up your bookkeeping system, but it would be a great idea to have an accountant check your set up to make sure that it is OK and that he or she understands exactly what you want to do with your business. It is always great to have an accountant that you can go to that will help you make good decisions about your business. Personally, my accountant is like a partner in my business. I would not run my business without one.
Here are the Simple Steps For Setting Up Your Embroidery Business For Success!
- Organize all of your Expense and Income receipts
- Create Price lists for each area of your business
- Create a list of all of your Customers
- Create a list of all of your Vendors or Suppliers
- Create a list of all of the services your offer
- Install QuickBooks
- Set up your Chart of Accounts
- Import all of your Lists of information into QuickBooks
- Start adding your Orders into QuickBooks
- Add each job to your Scheduling System
- Create an Invoice as soon as the job is completed
- Deliver your job and collect your money!
I know all of that sounds very simple and really it is once you have your system all set up. It is critical to organize every part of your business and your records must be organized for easy and accurate bookkeeping. Without good organization of your records, it can become very overwhelming when you need to produce some important information and it can cause unnecessary stress in your personal life and your business. You won't lay awake at night worrying about paperwork! It will be taken care of!
If you are serious about wanting to have a system for setting up your embroidery business for success check out my system, Simple Steps For Setting Up Your Embroidery Business For Success today! This new program is a combination of the “How To Price Embroidery” and the “Embroidery Business Bookkeeping System.” It also saves you money when you purchase this program instead of each one separately! It is to your advantage to have your profitable embroidery pricing in place when you set up your Bookkeeping System and it is going to save you so much time as well as increase your profits! You will be so glad that you did!
If you will follow this system of simple steps for embroidery business success, you will have your embroidery business set up to start making the profits that you dreamed up when you first started your embroidery business!