Which Machine is Right for You?

GETTING STARTED BY DOING…HOMEWORK?

You thought that homework ended when you left school behind, right?

Well, I have some good news and some bad news.

The bad news is that homework is required when starting an embroidery business. The good news? This time it could make you some money—and—this time you get to ask the questions.

 We’ve all met people who do everything right and just fall into a successful business…sometimes knowing nothing at all. They have a golden touch, growing a booming enterprise out of thin air—hobbies and inventions become an overnight success. While the telling of these stories makes for exciting dinner conversation or magazine articles, the hard fact is that most of us have to do our homework and work hard to become successful.

 HOW TO BEGIN?

 Trade shows offer great opportunities for learning—at seminars and in one-on-one discussions with salespeople and embroiderers who have already passed the test. But before you get to the show you should do a lot of research…reminiscent of the hours you spent in the library with your index cards, gathering the facts for your term paper.

 Start off by exploring the Internet. Learn the language so you can ask intelligent questions when you do get to the trade show. You can then communicate a level of knowledge to the salesperson that will command respect and demand straight answers. Read everything available about the different machine companies (their side of the story) and then join a discussion forums like the Embroidery Line (www.EmbrioideryLine.net) ask questions and collect the answers (the consumer’s side of the story).  Visit some shops and talk to established business owners. The end result is a gathering of knowledge that can help you learn to evaluate the available machines in regard to our own needs.

 Write down the questions you want answered and, when you get to the trade show, jot down the answers—and the name of the company that provides them. I know people in this industry who attended three or four trade shows before making a final decision.

 So as not to “reinvent the wheel,” I have, with my editor’s blessing, excerpted explanations of the kinds of embroidery businesses and the pros and cons of machines (singles vs. multi-heads) from my first book Professional Embroidery: Business by Design.

 THE KINDS OF EMBROIDERY BUSINESSES

Service

service embroidery business depends on customer to supply the goods. You don’t have to bother with samples, catalogues, freight, order verifications, storage or inventory (as in accounting) issues. But, you are not making the extra dollars that the sale of the garment invites. That profit can often make the difference when bidding on a job…allowing you to win the bid by discounting the shirt while still making the money on the embroidery. The downside to a service-only business is that you’re often supplied with sub-standard product—not as classy as your embroidery.

 A solution is to stitch on both customer supplied goods and your own. You have the sources to upgrade your customer to a better garment so you can make a profit on the shirt, and add to your bottom line.

 Embroidery shops may choose not to accept goods supplied by the customers because they don’t want to be responsible for mishaps. If they don’t know the origin of the shirt, they can’t replace it. If they doknow where it was purchased, they may have to pay full price for another. If it is an antique christening outfit or expensive wedding gown, the pressure may be more than they want to handle. The answer is to either not accept any outside goods, or have the customer sign a disclaimer in case of catastrophe.

Sometimes you will find that even if you execute a disclaimer, a disgruntled customer may take you to court, where the decision can go either way. For the new embroiderer, it is a good idea to pass on the irreplaceable items until skill level is equal to the risk.

 A good line to use with those customers who simply want to supply their own shirts from the local discount house is “I can get you a better shirt for the same or less money. I can get you shirts that you can match and replace year after year. And, if you buy your shirts from me, I’ll be able to replace any shirt that is lost in the day-to-day of doing business.” You don’t say you won’t replace the customer-supplied shirts. You simply do say you will replace the ones they order through you.

 You can decide to concentrate your service business on only custom work, producing corporate shirts or establish a working relationship with a manufacturer that produces a product that is embroidered before assembly. Just be careful not to put all your eggs in one basket. A contract such as this should not be the sole reason for buying equipment. You should never allow a customer to “own” over 20 percent of your business.

Monogramming

A monogramming business is one that places initials or monograms on towels, linens and garments. It is individualized attention and people expect to pay for it.

 There are special machines made by Meistergram that do a first-rate job in this niche, being built for speed and lettering. The Meistergram is a workhorse when it comes to uniform names and any other kinds of personalization. Check out the catalogues that crowd your mailbox and you will find that the companies that offer personalization usually have one or more Meistergram machines—while those that offer logos have the straight-stitch machines. The difference is in the stitch. The Meistergram executes a zigzag stitch that lends itself well to tight, smooth lettering. It cannot sew a circle, though, unless a special design is digitized; it can only do an arch.

 The straight-stitch machine can sew run stitches, circles and intricate details. Its stitches can maneuver more easily in tight corners and curves. The lettering can be made to sew as tightly as a Meistergram. Its versatility has made it the more popular of the two types of machines, but there are many instances where my Meistergram does a flawless and quick job with its keyboard lettering and easy hooping. I often run jacket backs on my multi-head and do the names on the front with the Meistergram.

Retail

A retail business sells goods—often pre-stitched—to the consumer. Shirts and caps can be inventoried for custom work and special designs and merchandise displayed for the customer to browse and buy. Retail shops may offer other items that can be personalized. Items that can be engraved are a good add-on in this environment. If you don’t do engraving on the premises, you can contract it out to a local jewelry store. There are many opportunities in a retail setting to entice the customer to buy—antique or new linens, a full line of towels and terry robes, kitchen towels, sheets, flags, purses, children’s wear.

Wholesale

Wholesale embroiderers sell goods to a reseller or even selling pre-embroidered shirts to another embroiderer with only a single-head. He may not have the ability to stitch quantity but have the need for it. Another good market for pre-embroidered shirts is the Meistergram owner who may want the detailed designs a straight-stitch embroiderer can offer, and then add names for the end user in his own shop. Sometimes you will encounter a business that wants wholesale goods at a contract price. Be careful if you want to realize a profit. A small shop with only a few heads, is not a good candidate for providing contract embroidery.

Contract

When you think of contract embroidery, you usually think of thousands of pieces being stitched at bargain prices (quantity rules) by shops with many machines. I would not venture to offer contract embroidery unless I had at least 40 heads, and perhaps two shifts of labor.  Beating a machine to death and keeping busy does not necessarily add up to success.

But contract embroidery can have a wider meaning. You can sub-contract out all your embroidery if you decide to build your business before you purchase any equipment. Use embroidery shops to fulfill your orders and build your client base and bank account while learning the business.

 Before you commit to using a shop for your embroidery needs, research capabilities (number of heads), pricing and strengths. Find out what kind of equipment the shop has—number of heads and number of needles per head. This can affect the pricing and turnaround time. What is the largest sewing field? Do they concentrate on caps and so do not stock the larger hoops needed for jacket backs? Which shops have in-house digitizing? Art departments? Some shops will only run designs they have produced (or their chosen digitizer). They don’t need the headaches of poorly prepared designs, and they have neither the time nor the patience to proof them.

Do they specialize? If so, what is that specialty? Caps? Appliqué? Leather? Three-dimensional embroidery? Are they willing to use novelty or metallic threads? Are there any jobs they will not accept? Do they have the space to hold your goods prior to stitching them? Will they accept direct shipping (called “drop-shipping”) from your garment vendor? Who counts the goods? If they count, is there an extra charge? How much time does an order require from start to finish? Will they provide you with a sample sew out of the design for proofing? If so, is there a charge? Who pays for goods that are damaged during production? Is there a “spoilage” rate and, if so, what is it? Find out what their quality control, finishing and packaging procedures are. Ask for references and check them out. Ask for samples.

Above all, make sure the policy of your sub-contractor protects your rights to your customers. The contract embroiderer accepts shipments, digitizes logos and ships to the end-user. He will know the identity of your customer. You want to do business with those who will respect your rights and not spirit your customers away. The shipping boxes should have your return address on them.

Don’t disregard the small shop when you are looking to sub out embroidery. They can be faster, sew specialty jobs, and perform smaller runs. If it’s volume you’re after, larger shops will help you fill orders fast—but be sure the quality is there before you put your name or reputation on the line.

All of these questions and research tactics apply whether you are a small shop looking for a contract house to help you fill larger orders or a middle man offering embroidery while you get ready to take the plunge. You can also become a contract embroiderer yourself. It is tough to compete against offshore production, but it can be done. Those who succeed have brought something to the table besides price, or perhaps concentrated on selling to folks who want the goods embroidered in a certain country. If banks and banks of machines stitching away for two and three shifts with lots of employees is your dream, go for it. But, like every other aspect of going into business, do your homework.

Combination

Consider the screen printer, the dry cleaner, the bowling alley, the sporting-goods dealer, the dance studio, the frame shop, the gift shop, the tailoring/alteration/sewing shop. Any of these businesses has a corner just waiting for an embroidery machine. If you have a successful business—product and a customer base already in place—embroidery may be a great add-on. Marrying embroidery to an existing business is considerably less risky than starting from scratch.

Dreaming about an embroidery machine is fun but you need to check out the competition. It’s part of what you need to know in order to make an educated decision about your future as an embroidery professional. It’s part of the information required in a business plan. A good place to start when looking for the competition is the Yellow Pages of your local—and not so local—phone book. Most businesses, even those operating from their homes, have a business telephone line, which entitles the owner to a listing in the Yellow Pages.

Select the nearest five competitors and contact them. Find out how long they have been in business, how many embroidery heads they are running. What is their niche? Is their business steady? Is it growing? What are their strengths and weaknesses? Will your business be like theirs, or different? How will your business be better than theirs?

If you are thinking of a personalization business and they have multi-heads, if you are thinking of specializing in caps and they avoid them, you may be able to mesh ideas and establish a co-operative business relationship.

BE AWARE OF THE POSSIBILITIES

A small-volume, single-head shop owner asked a question in my beginning embroidery seminar about what to do when jobs too large to handle come their way. I shared some stories to encourage him to take those jobs and contract them out to a trustworthy, quality contract embroidery shop. I happened to mention that I knew of two large shops that had begun their journey in the world of embroidery without a single machine. They contracted out everything and only when the money was in their bank account did they make the decision to buy their own equipment.

A screen printer in the audience who had arrived at the trade show ready to buy took these stories to heart, went home and began to contract out his embroidery. When his clientele was established and the money in the bank, he bought machines and brought the embroidery business in-house. He called to tell me: “I wanted to buy equipment so bad, but I liked the sound of your stories, so I did it that way and I am so glad.”

Don’t Turn It Down

 

I am amazed at the number of folks who never consider taking that big job. If they can’t do it, they turn it down and, in doing so, turn away their tomorrows. The way I look at it, as long as you have a contract embroiderer on whom you can rely, any job can be yours.

And now that you know any job is your job, what decision do you make when you purchase? Buy what you can afford and what suits your present market, but offer the services that you can command, be it 500 garments or even screen-printing services.

Singles And Doubles

 Buying a single-head machine is never a bad decision. It will pay for itself in stitched samples, promotional gifts, verifying your own designs, stitching out the design provided by your favorite digitizer for customer approval, and stitching individual names on those garments that come from your contract embroiderer. A good rule of thumb for a single head is 1-12 units. You have the option to do more if you have a larger order that doesn’t lend itself time-wise or otherwise to sending it out. As long as you are making a profit, you can stitch to your heart’s content.

A two-head machine is a savvy choice. You can stitch two-of-a-kind so you have a sample to keep for show and tell. You can produce those dozen shirts in half the time. A two- or even three-head machine can produce 13-72 units efficiently while still handling those products that only require personalization.

Four- And Six-Heads

Easily handling 73-144 units and beyond, the four- and six-heads cut production time not quite in fourths. Resist the temptation to pass the extra earnings to your customer. The payment for that machine comes out of your pocket; putting that extra cash on the table for your customer may make you popular, but it will affect your bottom line. Think of ways to make your four-head work for you while marketing for jobs that match its performance. You can use a four-head to create “stock” items—products that are generic in nature, but can be turned into a one-of-a-kind gift by adding a personal touch with names or individual information.

Moving up to a six-head raises your production to 73-300 units. Your profit possibilities increase as well. This machine can open up the world of wholesale production. Be careful to determine your pricing carefully if tempted to offer contract embroidery at this level. While this number is certainly open to discussion, I believe that any shop with fewer than 36 heads should evaluate profit goals carefully before offering stitches at 25-35 cents per thousand.

A four- and six-head can really get production moving, especially if you have a single-head running those names while the multi-head pumps out the jacket backs or the design on the side of the tote bag. I have found more embroiderers making crucial decisions at this stage—more than when they made the choice to move from a single-head to the first multi-head. Do I stay small enough to handle it alone with an occasional helper? Or do I face the paperwork and requirements of employees?

The Twelve-Head

This is a serious machine, capable of efficiently producing 300 units and up. It’s not an investment for the faint of heart and starts a shop on the road to large production work. Coupled with single-heads for individual personalization, you can court larger jobs and offer serious wholesale services. If you have kept your two-, four- and six-head along the way, you are approaching contract capabilities. Employees and more square feet are a certainty at this level.

Other things to consider when contemplating a machine purchase are simple—such as, will it fit through my door?—and more complicated—as in, shall I lease or buy? Measuring can solve the first; the second needs to be more carefully evaluated, perhaps with the help of an accountant. Allowable depreciation on machines offsets the greater deductions of the lease (whole payment as opposed to interest only) but remember, if you are unhappy with your purchase or want to trade up to a larger model, you can trade in your present model.

Do Your Homework

Changing your mind will be less probable if you do your homework before you buy. In spite of the peripheral decisions, the most basic one is still what size machine do I buy? It is more important than brand and second only to choosing a company that will support your decision, your business and your machine.

Some shops make the decision to add a second four- or six-head to allow the simultaneous production of different jobs, or keep one set up for caps and one for flats at the same time. Other shops add one single-head after the other so they have flexibility in scheduling production. Six single-heads can stitch a half a dozen of the same design or six different ones—a great advantage when your job mix is diverse.

Study your market; study your dreams. Study and homework are the keys to making a decision and making sure it is the right one.

I wish you good fortune whatever machine or type of embroidery you choose. Loving your work is so important. Life is short and too soon spent. Spend your days loving what you do and you will find you have plenty of love left over for other things—and others—at the end of the day.