How to Start an Embroidery Business in 3 Easy Steps

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How to Start an Embroidery Business in 3 Easy Steps

Are you good at embroidery? Do people ask, “why don’t you start selling these?” whenever you present them with your latest project? Have you finally started asking yourself this same question?

A lot of people can only dream about turning their hobby into a small business, but with something like embroidery, your dreams can certainly become a reality! If you are looking for a flexible side hustle that allows you to use your embroidery talents and creativity while turning a profit, then you may be a great fit for the embroidery business.

Want to learn more? Keep reading for our guide on how to start an embroidery business.

Step 1: Do Your Research

What Does an Embroidery Business Do?

An embroidery business typically embroiders clothing items for individuals, groups, and/or businesses. You don’t necessarily need to have a specific niche, but it can be helpful to specialize in embroidering something in particular, especially if you have identified a gap in the market.

Some ideas to consider:

  • Company logos on different kinds of apparel, as there are always businesses out there looking to increase brand awareness
  • Moms/Pregnant Women/Grandparents
  • Sports team uniforms
  • School and club uniforms
  • Weddings and bridal parties
  • Custom designs on shirts, pants, caps, face masks, etc.

Do I Need Any Licenses or Permits to Open an Embroidery Business?

If nothing else, to operate your business legally, you will need a business license. You may also need other licenses and permits, such as a permit to run a business out of your home or a seller’s permit to collect sales tax.

The requirements for all of these types of licenses and permits can vary depending on where you live and the exact nature of your business, so get in touch with your local county clerk or other government officials to find out what is necessary for your situation.

What Are Some Skills or Experiences That Will Help You Build a Successful Embroidery Business?

Embroidery skills are, of course, essential to building a successful home embroidery business. If you are a good embroiderer, you probably already have an eye for detail, knowledge of different kinds of fabrics and techniques, and a certain amount of creativity, which will also serve you well in this type of business.

Since you will likely be working directly with customers, good customer service skills are also a great asset. The ability to work directly with your customer to ensure that they get exactly what they desire while maintaining a friendly and professional demeanor will keep customers coming back to you again and again for their embroidery needs. Word of mouth can also help you find a potential customer as well.

Business skills are also important when running any kind of business, including a custom embroidery business.  For example, you need to be able to keep track of your financial situation, inventory, customers, etc. In addition, management, organization, and leadership skills will help you in all areas of your business, whether you do commercial embroidery outside of the home or you plan on running a home business.

Finally, time management skills are also really important for this type of business. Embroidery can take a long time to do properly, so don’t take on too many projects at a time. You may find yourself rushing through projects to complete everything on schedule, which may result in a low-quality product. While it may be tempting to take on a lot of work at once, remember to pace yourself.

Step 2: Figure Out Your Costs

What Are the Startup Costs for an Embroidery Business?

Embroidery machine with colorful thread

The startup costs will depend on the size of the business you are looking to start and what you already have, but at the very least, you will need a place to operate your business and something to help you do embroidery.

When you are first starting out, you can likely get by just working out of your house with some embroidery thread and an embroidery machine, which you may already have at home. If you want to invest in a commercial machine, though, a good quality one could cost you upwards of $10,000.

You will also need to make sure you have a good stock of other smaller items you may need, such as hooping boards, topping material, backings, bobbins, needles, specialty sewing kits, and stock designs.

Some other things that you may already have that can be helpful are a computer and printer for your intricate embroidery designs, and then you may even want to invest in digital design embroidery software. This can be especially helpful for pulling off really intricate designs for customers. While you are on the computer, you may also consider purchasing a website for your business. This can build brand recognition and improve your sales.

Though it is not necessary, you may also want to consider having a stock of plain apparel, or embroidery blanks, on hand for customer orders, such as shirts, caps, jackets, sweatshirts, etc. This way, you don’t have to wait for customers to purchase and bring their own items in for embroidery, and you can make some extra profit for your embroidery service by selling these items yourself.

What Are the Ongoing Costs for an Embroidery Business?

Once you have bought your basic pieces of equipment, your ongoing costs are mostly just going to be embroidery thread and, if you have decided to sell this as well, your stock of plain apparel. You will also need to make sure you always have what you need in terms of the smaller items, such as hooping boards, topping material, backings, bobbins, needles, specialty sewing kits, and stock designs.

If you have decided to invest in a website, you will also need to pay domain and web hosting fees, which are typically either monthly or annually.

Finally, if your business begins to take off and you decide to invest in an office space, you will also need to think about the ongoing costs for rent and utilities.

Step 3: Make a Profit

How Much is the Embroidery Industry Worth?

The global decorated apparel market, which includes embroidery, was worth about 32.77 billion USD in 2020. The embroidery segment accounts for about 42% of this market, as these types of products are more in demand due to their higher durability than others.

What is the Growth Potential for the Embroidery Industry?

The global decorated apparel market is expected to grow at a CAGR of 10.91% from 2019-2025. This means that it is expected to be worth about 55.23 billion USD in 2025.

How Do You Market an Embroidery Business?

The first step when marketing your business is determining your target audience. Who do you see buying your products? For example, if you wanted to concentrate on school uniforms, you could reach out to some of the local schools in your area. If moms and grandparents are more your thing, then look to get the word out to some local mom groups or preschools.

Generally, though, there are a few things that you should set up to help market your embroidery business, the first being your website. While not necessary, a website is a great way to showcase your talents and allow potential customers to learn more about your embroidery business. Consider setting up a blog and mailing list on your website, as these will help keep your customers informed of new products and other things that are going on with you and your embroidery business.

You can link to your website through social media pages. Having a social media presence is practically essential for businesses these days, so start up a Facebook or Instagram page for your embroidery business so you can interact with customers and show off your embroidered designs. If you get lucky, one of your designs could go viral on one of these sites, which could lead to a whole host of new customers coming your way!

Finally, do not underestimate the power of word-of-mouth advertising. If you do quality work and are well-liked by your current customers, they will likely recommend you to others looking for embroidery work. You could even leave space on your website or social media pages for customer reviews and testimonials so they can potentially reach an even wider audience.

How Much Should I Charge for Embroidery?

Industrial Embroidery Machine in textile factory

It is ultimately up to you how much you want to charge for your services, but you may want to use a couple of common formulas to price your embroidery.

One way to charge for embroidery is to base it on a per-thousand stitch rate, which is then multiplied by the number of embroidered pieces. It is common to charge somewhere around $1.00 per thousand stitches.

In addition to the stitch rate, some embroiderers will also charge what is called a hooping fee. This refers to the time it takes to get your material on the embroidery hoop and just generally set up the embroidery machine. This is usually a flat rate of about $5.00.

For example, using this type of pricing, if you have a 3000-stitch count, you would be able to charge $8.00 ($5.00 hooping fee + $3.00 per-thousand stitch rate).

Another common way of setting embroidery prices is by charging a higher hooping fee, for example, $9.00, and then charging $1.00 per 1000 stitches OVER a set number of stitches, say 5000. You may choose this method if you are embroidering a lot of items with a low stitch count, like 1000 stitches. This way you will be earning slightly more for your work.

For example, with a 3000-stitch count, you would be able to just charge the hooping fee of $9.00, as the embroidery design has less than 5000 stitches.

Use whatever formula fits the situation, or you could do away with the idea of formulas entirely and simply choose to charge hourly for your work. No matter which way you choose to price your items, though, keep your profit margin in mind. You want to make sure you are charging enough to cover your material and labor costs while still maintaining a profit.

Any Other Tips for Jump Starting an Embroidery Business?

Of course! Here are some more tips to jump start your embroidery business:

  • Consider taking some time to get your business ranked on Google. Arguably, most people only check the first page of results when they do a Google search, so if you can get your business ranked on there, you will likely get a lot of traffic to your website. If you don’t have the time or know-how to boost your website's SEO (Search Engine Optimization), look into hiring a digital marketing agency or freelance expert.
  • If you are looking to start your embroidery business on a shoestring budget, check out Craigslist, Facebook Marketplace, or eBay for supplies. You may be able to get gently used or even brand-new equipment and material for a fraction of what you would pay in stores.
  • Take the time to create or buy a comprehensive yet simple order form. This way, you can keep all of your customer’s information organized, and if there is a dispute with the customer, you can always refer back to the form. An editable PDF is probably your best bet for your form if you are primarily taking online orders.
  • If you are working out of your house, consider making a pickup/drop-off box that customers can use to do just that: pick up or drop off their items. That way, if you are really busy, you don’t need to stop what you’re doing to potentially get in a long conversation with a customer.
  • Be sure to check out our other posts for more ways to start your side hustle!

ABOUT THE AUTHOR

Matt Williams is a partner at Side Hustle Startup, a company that helps entrepreneurs create and build their own side hustles. Matt has created brands for himself in the past and loves to help others do the same. He's married to Amy, who he met while attending college in Illinois. They have one dog named Leonard.
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Matt Williams is a partner at Side Hustle Startup, a company that helps entrepreneurs create and build their own side hustles. Matt has created brands for himself in the past and loves to help others do the same. He's married to Amy, who he met while attending college in Illinois. They have one dog named Leonard.
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