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Like screen printing and sublimation, machine embroidery is becoming more popular and in demand. Coupled with decreasing initial costs, starting an embroidery business is easier than ever.
And, if you’re already a hobby embroiderer who knows the ropes, transitioning to earning money embroidering is easier than if you’ve never touched a machine before.
However, your new business venture could be a complete bust or a huge success depending on factors like your startup budget and location.
Here’s how to start an embroidery business and determine if it can expand into a side hustle or full-time small business!
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How to Start an Embroidery Business
Whether you’re starting an online business or plan to sell your items locally in a brick-and-mortar shop, making a plan, researching your competition, and assessing your likelihood of success is essential.
I started embroidering as a hobby first, but when friends and acquaintances kept asking me to embroider for them, I figured I might as well start making some money by charging a small fee. I now have a nice side income doing something I love!
Here’s what you need to consider before starting your own embroidery business.
1. Determine Service Types To Offer.
Your risk level, skills, and budget will determine which of these five broad types of embroidery services to offer:
- Embroidering on items supplied by customers
- Embroidering requested designs on blanks you provide
- Selling embroidery blanks that haven’t been embroidered yet
- Selling premade items like bags, quilts, patches, or wall hangings
- Selling digitized designs or digitizing services
My business model is only embroidering designs on blanks I provide. I make mistakes sometimes, and I don’t want to ruin a timeless family heirloom if my machine decides to act up. As such, I will not embroider items supplied by customers, although I will embroider custom patches that customers can sew or press on later.
2. Select a Niche, Then Verify With Market Research.
Who is your ideal customer?Knowing your target audience (moms, schools, sports teams, sororities, etc.) will help you narrow down what products and services you want to offer.
If you aren’t sure, start broad with whatever customers you can scrounge up, and see what you prefer and what will be most profitable. However, continuing to have an unfocused set of offerings is not ideal. Eventually, narrow down your niche to cater to your specific target audience with clearer brand messaging and expectations as your small business grows.
Three resources for those lost with deciding where to start with ideas:
- Ricoma has a helpful list of profitable embroidery niches, including ideas like embroidering for Greek organizations, athletic teams, stores, and corporate offices.
- Avance Embroidery’s 35 embroidery business ideas can jumpstart your brainstorming.
- I also have an exhaustive list of 200 items you can embroider that includes most embroidery blank options.
There also must be demand for your services, or you won’t get orders and can’t pay the bills, no matter how much enthusiasm or skill you have!Don’t forget also to assess the competition in your local area or online niche.
When my husband and I considered opening a medical practice, we spent days with consultants assessing practice locations based on traffic flow, demographics, competition, and more.
Doctors who don’t analyze the data and make a plan before opening a practice are more likely to fail, and the same applies to embroidery companies. You won’t be successful if you open across the street from a successful business or enter the online embroidery business in a competitive niche with nothing to differentiate yourself from embroiderers who’ve owned shops for decades.
So, to summarize: have a target market in mind, do your market research, and customize your embroidery services accordingly.
3. Determine Where You Will Embroider.
You can set up your business out of a spare room in your home or rent a commercial space for your embroidery machines. If you don’t have a huge budget, a room in your home or your temperature-controlled garage is the best bet to test your business ideas.
Embroidering at home has these downfalls:
- Will people visit your home to pick up and drop off if you take orders? If so, you must keep your space clean, abide by city restrictions for home-based businesses, and consider the tax and insurance implications of operating out of your house.
- Computerized embroidery machines can be loud, especially commercial, multi-needle embroidery machines.
- Embroidery machines, supplies, and blanks occupy significant space, so you need enough room to store everything.
Meanwhile, renting a storefront has extra costs like rent, utilities, and insurance.
4. Decide Where You Will Sell.
Depending on your business intentions, you can sell your embroidery online or through a storefront.
A. Online
You can start a website or sell embroidered items through platforms like Amazon, eBay, and Etsy.
Pros and cons of selling through existing platforms:
- Amazon, eBay, and Etsy have massive customer bases, although having your product found can be difficult in saturated niches.
- You can get your items listed with the click of a button, and you need very little tech savviness.
- There are fees associated with selling items; some sites even have fees to list items or caps on the number of items you can list. However, these platforms take care of charging taxes and collecting payments.
- These platforms can ban your account and shut down your shop at any point for any reason, valid or not.
- You must abide by set return and shipping guidelines and prices. If someone tries to return a custom embroidered item, eBay may allow it, and that’s not only a loss of the entire item but also the shipping cost.
- You have less control over customer reviews, and dealing with unfair or wrong reviews is not as simple.
Pros and cons of having your own embroidery website:
- Creating an online shop requires tech skills to set up and maintain or money to hire someone to set up WooCommerce, Shopify, etc., and troubleshoot when things go wrong.
- You must learn how to take payments and collect taxes. Examples of payment companies include PayPal, Square, and Stripe.
- A lawyer needs to draft official documents like privacy policies, disclaimers, terms & conditions, etc., to protect you in the event of a dispute.
- You must have a way to get the word out about your shop, as ranking your website on search engines and creating an online presence takes time and mad SEO skills.
- A website advertising embroidery services can sell embroidery blanks you’ve purchased wholesale and sell at a profit.
- It’s easier to bookmark a website to return to rather than remember a random eBay member’s profile. It’s also easier for customers to view all your offerings on your website, so users are more likely to purchase multiple items.
- You have control over setting a minimum order number or value and setting your shipping fees and return guidelines. For example, refusing the return of custom items and charging for return shipping or restocking.
- There is no customer service to handle ordering for you (like on Etsy), so you must be available for contact through email/chat or by phone during reasonable business hours.
B. Store Front or Home Business
You can also sell your items in a store you rent or at more creative venues like local craft fairs, farmer’s markets, or sewing and embroidery shows.
We have a local alpaca farm, and I noticed their store has recently acquired embroidered items like potholders with alpacas on them–these are provided by a local embroidery shop to the farm’s store. So, get creative and see who you can partner with to sell items you create!
5. Create the Business (Name, Website, Business Docs, and Accounts).
This is not legal advice, and I recommend consulting a lawyer to guide you through the exact requirements for your locale and situation.
However, next, pick your business name. For US businesses, do a trademark search to avoid future infringements, and make sure you won’t be confused with other businesses by performing an online search using your intended name.
If you’re in the clear, register your business and get your tax ID to make things official. While I operated as a sole proprietor when I was a doctor and had malpractice insurance, my embroidery business is registered as an LLC to protect my assets, and I can elect to be taxed as an S Corp. I also have a DBA since I use a different business name when I sell items at certain functions.
Business license registrations and requirements vary by state for US businesses, so check with your local government offices. Where I live, I got my EIN (employee identification number) and LLC set up quickly online without using a lawyer.
If you’re unsure what your business’s legal structure should be designated as or taxed as, hire a lawyer or accountant to set up your business and create the required operating agreements and business documents.
Then, once you have official documents, open any necessary business accounts. For tax purposes, I have a separate business credit card, business bank account, and business accounts through PayPal and other payment collection services. I also have business insurance, as I don’t like to take chances at losing everything!
I even have a PO box for my business, as I want my house address unassociated with my business as much as possible.
Lastly, for online businesses, pick a domain name and set up hosting for your website. You can use WooCommerce’s guide to setting up an online shop if you don’t have experience already.
6. Get the Legal Stuff Done Early.
If you have your own website, have a lawyer draft disclaimers, terms and conditions, a privacy policy, an accessibility policy, an ironclad return and refund policy, and other legal documents.
If you have a brick-and-mortar store, get a lawyer to review lease agreements, employment agreements, refund policies, and vendor agreements.
7. Purchase a Machine.
The most essential purchase for your embroidery business is the machine itself.
There are three main classes of embroidery machines used in the embroidery industry.
- Domestic single-needle machines, which often have plastic parts and are not intended to run all day every day
- Semi-commercial machines, like Brother and Janome multi-needles, for example
- Commercial/industrial machines, including single- and multi-head machines like Barudan, Happy, Melco/Amaya, Tajima, Toyota, or SWF.
For newbies, the smallest embroidery machines are domestic home embroidery machines with 4×4 hoops that can be purchased for as little as $300. You can make patches or small designs with these machines, learning if embroidery is something for you first. Then, you can sell the machine and invest your business’s profit into a larger single-needle machine or a multi-needle machine.
Single-needle machines are more than adequate for single-color (or even a few color) designs and cost much less than multi-needle machines, which start around $6000 new. And, interest rates for machine purchases can be insane for buyers with low credit scores!
Multi-needle machines, however, are much more efficient for designs with multiple color changes and are necessary if you plan to scale your business into a full-time job. Since the amount of money you can make embroidering daily is directly correlated to how many blanks you can embroider that day, you will make more money with a multi-needle machine.
Plus, multi-needle machines have free arms, which make hooping hats and tubular items–onesies, sleeves, pockets, makeup bags–easier and more possible. They’re also made with more metal parts and are more likely to embroider all day long on heavy fabrics successfully.
I always recommend having more than one machine to have a backup once your business gets off the ground. (If you have a local place to rent an embroidery machine, you can always fall back on this option.)
Helpful resources I’ve created include purchasing a used embroidery machine, the best embroidery machines for beginners, and creative places to look for embroidery machine financing.
8. Buy Necessary Supplies.
Additional supplies you need to purchase (and find a place to store!) include:
- Embroidery thread
- Different types of stabilizer
- Extra embroidery hoops
- Embroidery software or purchased designs and fonts
- Computer
- Bookkeeping and other business software
Check out my article on the startup cost breakdown of an embroidery businessfor cost ranges and an explanation of required supplies.
9. Source Embroidery Blanks.
If you’ve decided to do custom embroidery on blanks you stock, it’s time to make some decisions here.
- What items will you stock?
- How many of each blank will you need?
- How many colors and sizes do you need?
- If you don’t have the item in stock, how fast can you get it?
Now, for some tips. First, after you’ve verified quality, purchase your bulks in blank at wholesale pricing. For most blanks suppliers, you will need a business tax ID number to do this.
To source blanks, I price out buying from online suppliers, but I’ve also had good luck at embroidery trade shows. For example, I recently visited the Impressions Expo in Fort Worth, and I was impressed by the partnerships I established.
The tricky thing about buying from blanks suppliers online is that they’re usually buying from someone else and then marking up the price to make a profit before selling to you. So, see if you can find the person they’re buying from and eliminate the “middleman” to keep that extra money in your pocket!
Lastly, establish relationships with several blanks suppliers. Learn their shipping schedules, shipping costs, and minimum order requirements. Also, learn if they deliver to PO boxes if you don’t have a physical address to which you want huge quantities of items delivered.
10. Source Designs or Learn to Digitize.
Whether you embroider on demand or sell premade embroidered items, you need embroidery designs that you can use commercially. You can:
- Purchase premade designs from embroidery design websites (check if selling items made with the design is allowed, though).
- Create the designs yourself.
- Source a digitizer to create designs for you.
If you plan to embroider custom designs, know that customers will not provide a digitized embroidery design to you, and you will have to create it yourself. Digitizing is not for the faint of heart (even if you’re already a graphic designer!), so if you don’t want to learn the process well, consider hiring a digitizer.
Upwork, Fiverr, and other platforms are filled with amateurs insisting they can digitize your design for no charge. Many times, this means they’ll plug your image into auto-digitizing software, click a button, and then return a mangled design to you.
A poorly digitized embroidery design can cause stitch-out issues–puckering, holes, and more–so save yourself the headache by becoming a top-notch digitizer yourself or outsourcing the process to a suitable professional.
Even if you don’t know how to digitize, at least purchase editing software so you can do basic customization or editing as needed. For example, duplicating a design, adding and rotating lettering, changing colors, or adding stops.
11. Consider Other Offerings (Sublimation, DTG, Sewing, Screen Printing).
If you’re already doing the legwork to start an embroidery business, you might consider offering other services as well.
Sublimation and heat-transfer vinyl (like from a Cricut or a more commercial machine) have a lower cost of entry than embroidery and can add value to your shop. Many items cannot be embroidered, and being able to personalize those items as well can add more versatility.
For example, a complicated design with too many colors and minute details that would be too difficult to embroider could be perfect for sublimation. You could still make the sale in this case rather than sending the customer to another shop that could fulfill their needs.
Also, having a sewing machine for small customization tasks like adding a ruffle to burp cloths can give you a leg above the competition.
12. Set Pricing and Order Quantities.
To get an idea of the going price, scout out embroidery services similar to yours, and see what they charge as a starting point.
I like to charge a hooping fee for each item–my “base” fee, basically–and then I charge per 1,000 stitches. I like using Wilcom’s embroidery estimator for more accurate quotes if I have to digitize the design, which I also charge extra for.
Other things to consider when pricing include:
- How long it takes to embroider each design you stitch
- How much thread an embroidery design requires and the cost of other supplies needed like stabilizer
- Cost of digitizing the design
- Minimum order quantity or minimum design size to make your time worth it.
- Indirect costs like wear and tear on your machine and the time it takes to work with tricky blanks
Embroidery takes time and expertise, so don’t underprice yourself so you lose money with your hard work!
13. Learn to Take Good Pictures.
I will be the first to admit that I’m a horrific photographer. However, I’ve learned through a lot of Craftsy classes and other classes how to take product photography for items I sell.
Presentation is so important to making sales, so learning to photograph properly and having all the correct equipment is crucial if you plan to start an online embroidery business with a website.
Even if you intend to have a brick-and-mortar business, having good-quality photographs of past stitch-outs in a portfolio will help convert visitors to customers.
14. Market Your Embroidery Business.
In addition to offering a great product at an affordable price, networking and marketing are crucial for new business owners to get the word out to their potential customer base. Word of mouth is a great way to increase business sales, but you must get more aggressive to scale quickly.
You can market at craft fairs, through social media like Facebook, Pinterest, or Instagram, on a website, at school auctions, or even by paying for ads on platforms like Google, Etsy, or Pinterest. Carry business cards with you everywhere you go, and don’t be afraid to ask happy customers for referrals or stop by local businesses and ask if you can serve them in any way.
15. Optimize and Analyze.
At the end of each beginning embroidery project, analyze how your embroidery process and pricing worked. Find ways to make your business more efficient and more profitable. Then, scale!
Yes, you can make money with machine embroidery!
Learning how to make money with embroidery and starting your embroidery business take careful planning and execution, but with the proper research and business strategy, you can turn your embroidery hobby into a thriving business!
Many people make six figures with their home-based embroidery businesses. However, others are struggling to make the monthly payments on their machine. Picking a unique niche with profitable potential is crucial.
Embroidered items that aren’t very profitable considering the time input:
- In-the-hoop projects
- Intricate free-standing lace designs
- A high number of thread changes in designs on a single-needle machine
Embroidered items that give the most bang for your buck:
- Monogramming blanks you stock yourself
- Text patches with a single color
- Hats, beanies, and t-shirts or polo shirts with simple logos or designs
So, take this advice on how to start an embroidery business and get started turning your hobby into a profitable venture with paying customers!
