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Whether you’re a seasoned embroiderer looking to transition to making money off your hobby or a newbie looking to harness demand for embroidered items to turn a profit, considering embroidery business startup costs is essential.
Several years ago, I unintentionally started a small embroidery business embroidering for friends and family. When things went well, I then intentionally transitioned to making some actual money doing the craft I love.
Follow along to learn everything you need to know about how much it costs to start an embroidery business so you can budget before embroidering your first project!
How much does it cost to start an embroidery business?
Embroidery business startup costs can range from $1,000 to more than $25,000 depending on the machine you purchase, what type of embroidery blanks you plan to personalize, and even where you’re located.
Costs Associated Broken Down Further
What a large range, right?! Below are brief descriptions of startup costs, with explanations for the extensive range of estimates.
1. Embroidery Machine Cost
- $300 – $20,000+
Different types of embroidery machines carry different price tags.
As such, embroidery machines cost anywhere from $300 for small, single-needle flatbed embroidery machines to $25,000+ for multi-head embroidery machines.
As their name suggests, single-needle machines have only one needle, meaning users change threads at the end of each color.
These take longer to stitch designs with many color changes, but they’re perfectly adequate for single-color monogramming or personalization projects.
Many business owners initially start with small hoop, single-needle embroidery machines, and as the business starts profiting, they later invest in multi-needle machines.
As the name suggests, multi-needle machines have more than one needle (typically 6+) and automatically change thread colors for you.
They’re more expensive than single-needle machines, but they can be more efficient, allowing business owners to produce more finished products daily.
For a commercial-minded embroidery business hopeful, ultimately purchasing a line of multi-needle machines (called a multi-head machine) is the best way to maximize production.
However, multi-head machines are expensive and aren’t as space-friendly for home embroidery business owners, so having a space to house a multi-head machine and supplies is an additional consideration and cost.
As a note, purchasing a used embroidery machine can save money, but it could be more hassle if it wasn’t well maintained by its previous owner. You can also consider financing your embroidery machine to have more cash available initially for other business needs.
One last option to save some money on a machine is to see if your city is lucky enough to have an embroidery machine you can rent. My local library’s MakerSpace rents out embroidery machines free of charge to residents!
2. Supplies Cost
Must-have embroidery supplies include things like machine embroidery threads (different than sewing threads) in a wide variety of colors and embroidery stabilizer.
A set of 80 embroidery threads on Amazon can cost as little as $50, and purchasing in bulk decreases prices. (I prefer the big, 5000-meter spools for standard colors like black, white, and red.)
Multiple types of embroidery stabilizer (cut-away, tear-away, wash-away, etc.) are also needed in different sizes to allow stitching on all types of blanks.
Expect to spend at least $75 to get rolls of each type of stabilizer in the appropriate sizes to stitch your beginning projects.
One other consideration for supplies cost is additional machine hoops.
I like having extra hoops for my embroidery machine so I can prep the next project before the current project is done stitching.
Having a variety of hoop sizes also means you can pick the smallest hoop possible to save money on stabilizer.
3. Embroidery Blanks Expenditures
If you don’t want to embroider items the customer supplies, you must add costs for an initial stash of embroidery blanks. (Because what customer wants to wait for you to order blanks and then embroider them?)
This stash could include t-shirts, polos, pre-made patch blanks, blankets, and more.
Niching down to just a few products can decrease initial investment, but a small number of offerings will also decrease your potential customer pool.
4. Cost of Designs and Digitizing Software
- Free to $1000+, depending
Most embroidery machines have a few hundred built-in embroidery designs (although some brands don’t allow you to use them on items you sell) and fonts for adding text.
If you want different designs or need to embroider custom designs from images customers provide, you have to purchase these designs or create them yourself.
To create designs, you need digitizing embroidery software, which is expensive. Either that or hire a digitizer for $10-$20 to create each custom embroidery design for you.
There are many free embroidery software choices out there, but if you decide to go the self-creation route, it is easier and more time-efficient to learn digitizing with a more professional program like Hatch, which is a toned-down (and much less expensive) version of Wilcom’s high-end software.
Now, some embroidery machines do have basic digitizing capabilities in their built-in software.
For example, my Brother Luminaire has Design Center, which lets me create basic designs and scan images to turn them into embroidery designs.
However, embroidery machines just do not have the processing power or technology yet to auto-digitize complicated multi-colored designs successfully, so you still need a digitizer or digitizing software if you want your business to perform at its best.
5. Computer Investment
If you plan to purchase designs, you must find a way to get them to your embroidery machine.
This requires at least a computer with a USB port or WiFi to wirelessly transfer the designs.
And, if you decide to purchase digitizing software, these programs require a lot of computing power not to be laggy, so you will need a computer with above-average specs to create designs.
(I’ve created a post with information about which computers to purchase for embroidery software to check out for an idea of the required specifications.)
6. Business Formation Costs
If you just sell a few items on Etsy, Amazon, or eBay, you can probably get away with identifying as a sole proprietor at tax time and avoiding business setup costs. However, if you want to expand and protect yourself legally, consider making your business more official.
In the United States, this could mean creating an LLC, which has different filing costs per state.
Also, depending on your business model and where you plan to operate or sell, you might need to purchase business insurance or a business license, permit, certificate, registration, etc.
7. Physical Location Rent
While I recommend starting your embroidery business in your home to demonstrate proof of concept before investing in a physical location to house your business, it’s ultimately your choice.
Downfalls of home-based businesses include things like lack of space, noisiness, and having to meet customers at your house.
If you want a separate business location, consider costs like rent, utilities, insurance, and more when determining startup costs.
8. Marketing and Promotion Expenditures
- Free – $1000+
Unless people know about your embroidery business, no one will know to buy anything from it! While word of mouth from friends and family can get the ball rolling, you may need extra help to keep bringing the sales in.
A. Online Considerations
If you plan to sell online, you must create an online presence.
Whether this is done by creating a website with an online shop or taking advantage of existing platforms like eBay, Amazon, or Etsy, you must find a way to get yourself out there.
If you go the website route, don’t forget to add in costs like hosting, domain registration, website design, graphic logo design, and possibly hiring someone to optimize your website for search engines so people can actually find your shop online.
Also, while starting a business Facebook page or Pinterest profile is free, unless you get lucky, you’ll likely have to run ads or other promotions to increase shop visibility.
On eBay, Amazon, or Etsy, you may also have to pay initially to have your items appear on the top of search results as Sponsored.
Finding creative, inexpensive ways to market your online shop (like in your local newsletters, at sewing expos, etc.) can do a lot to drive traffic to your site in the early days as well.
B. Physical Shop Marketing
You can market with road signs, mailers, flyers, ads in magazines, newsletters, or local websites, and more to get the word out about your business. Either way, just building “it” and hoping people will come is not enough to pay the bills before starting a physical shop.
Make sure to invest time and money into creating hype around your physical business before you open the doors.
Whew, that was a lot to take in, right?! Thankfully, you should now be equipped to understand what goes into calculating the money needed to start an embroidery business before jumping in headfirst.
Embroidery can be incredibly profitable, but it is a significant upfront investment and requires a solid business plan if you want to succeed.