Embroidery Business Plan
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Executive Summary
Business Overview
Stitch-in-Time is a startup embroidery business located in Pierre, South Dakota. The company is founded by Nancy Owens, a professional at embroidery stitching, both by hand and by machine-generated completion. Nancy has been embroidering for over 30 years and is highly skilled in her craft. The recent influx of interest in embroidered items within the U.S. has brought her to the place of starting her own company to meet the demand. She learned her craft from her aunt several years ago and also learned how to machine embroider when she was an employee of a large embroidery firm in South Dakota for ten years. The hand embroidering combined with machine embroidery makes exceptionally beautiful crafted pieces for wedding dresses, formals, celebrity clothing and other special order items.
Product Offering
The following are the products and services that Stitch-in-Time will provide:
- Hand-embroidered piece work, including dresses, dress panels, artisan work and other designed fabric pieces upon request
- High-quality embroidered pieces that build on specific brands or implement brand names
- Monogrammed initials and familial coat-of-arms piecework
- Corporate gifts or customer appreciation items
- Promotional items for business purposes
- Day to day management of the business
Customer Focus
Stitch-in-Time will target customers who require embroidered pieces for the most important events of their lives, such as weddings and important occasions of note. In addition, Stitch-in-Time will target customers who require high-quality embroidery for business brands, brand names, monogramming and corporate gifts. An additional target market are those who require embroidery for promotional purposes.
Management Team
Stitch-in-Time will be owned and operated by Nancy Owens. She has over thirty years of experience in hand embroidery and machine embroidery. She brings to Stitch-in-Time a high degree of expertise and style to craft the most delicate and complex embroidery patterns, or create patterns of her own to emphasize special occasions, such as weddings and anniversaries. She learned the craft of precision-led machine embroidery when she was an employee of a large embroidery firm in South Dakota for ten years.
The management team of Stitch-in-Time includes Drew Crofter, a former employee of the machine embroidery company where she was employed. Drew’s capability to oversee production of machined embroidery became highly appreciated in the company and, now, as lead manager of the machine broidery, Mr. Crofter brings his own expertise to the new company. She worked for one year to convince him that the new company would be his best place to lead and thrive successfully.
She also brought Nancy Filmore into the new company as the Bookkeeper and Office Manager, overseeing the accounts and financials. Ms. Fillmore was formerly the Assistant Office Manager at the same embroidery company and has now agreed to lead as Office Manager in the new Stitch-in-Time firm.
Success Factors
Stitch-in-Time will be able to achieve success by offering the following competitive advantages:
- Friendly, knowledgeable, and highly-qualified team of Stitch-in-Time staff members.
- Comprehensive menu of embroidery designs, finished products and services.
- Superior customized designs for weddings and formal occasions. Each handmade design is unique and used once for each finished piece.
- Customer investment in the project may include designs of their choice or designs they build from heirloom pieces.
- All machine embroidery is offered at volume pricing and is discounted for promotional purposes.
- Stitch-in-Time offers the best pricing in town. Their pricing structure is the most cost effective compared to the competition.
Download the Embroidery business plan template (including a customizable financial model) to your computer here <–
Financial Highlights
Stitch-in-Time is seeking $200,000 in debt financing to launch its Stitch-in-Time. The funding will be dedicated toward securing the store space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:
- Store space build-out: $20,000
- Office equipment, supplies, and materials: $10,000
- Three months of overhead expenses (payroll, rent, utilities): $150,000
- Marketing costs: $10,000
- Working capital: $10,000
The following graph outlines the financial projections for Stitch-in-Time.
Company Overview
Who is Stitch-in-Time?
Stitch-in-Time is a newly established embroidery business in Pierre, South Dakota. Stitch-in-Time offers both hand embroidery and machine stitched embroidery, based on the needs of each customer. Hand-embroidered pieces at Stitch-in-Time will be decorative pieces that last for many generations and can be customized and finished as unique, one-of-a-kind items.
Stitch-in-Time expert embroidery artists will be able to produce excellent embroidered pieces via hand-stitching or machine-stitching according to the needs of the customer. Large volume stitching via machine will be offered at volume pricing and single pieces of hand stitched embroidery will be offered on a custom-based price structure. The collective experience of the staff at Stitch-in-Time is over thirty years, promising excellent craftsmanship and perfect results every time a piece is completed. Stitch-in-Time removes all the guesswork of embroidery and provides the highest quality and craftsmanship with all pieces produced.
Stitch-in-Time History
Stitch-in-Time is a startup embroidery business located in Pierre, South Dakota. The company is founded by Nancy Owens, a professional at embroidery stitching, both by hand and by machine-generated completion. She has been embroidering for over 30 years and is highly skilled in her craft. The recent influx of interest in embroidered items within the U.S. has brought Ms. Owens to the place of starting her own company to meet the demand. She learned her craft from her aunt several years ago and also learned how to machine embroider when she was an employee of a large embroidery firm in South Dakota for ten years. The hand embroidering combined with machine embroidery makes exceptionally beautiful crafted pieces for wedding dresses, formals, celebrity clothing and other special order items.
Since incorporation, Stitch-in-Time has achieved the following milestones:
- Registered Stitch-in-Time, LLC to transact business in the state of South Dakota.
- Has a contract in place for a 10,000 square foot office in a retail shopping district.
- Reached out to numerous contacts to include Stitch-in-Time in their crafting plans.
- Began recruiting a staff of three and two office personnel to work at Stitch-in-Time.
Stitch-in-Time Services
The following will be the services Stitch-in-Time will provide:
- Hand-embroidered piece work, including dresses, dress panels, artisan work and other designed fabric pieces upon request
- High-quality embroidered pieces that build on specific brands or implement brand names
- Monogrammed initials and familial coat-of-arms piecework
- Corporate gifts or customer appreciation items
- Promotional items for business purposes
- Day to day management of the business
Industry Analysis
The embroidery industry is expected to grow over the next five years to over $6 million. The growth of the industry will be driven by a greater interest in authentic and original embroidery pieces, especially within the wedding garment industry and in certain ethnic or tribal societies.
Costs will likely be reduced as machine embroidery becomes a 3D printed product and designs become more sophisticated within the complex capabilities of 3D machining. Products will have a higher quality and value as costs are reduced with machines which will eliminate the need for as many employees who must hand operate and maintain the embroidery machines.
Download the Embroidery business plan template (including a customizable financial model) to your computer here <–
Customer Analysis
Demographic Profile of Target Market
Stitch-in-Time will target those individuals in Pierre, South Dakota and regions beyond who are in need of the artistry found in hand embroidery or machine embroidery. They will target customers who require embroidered pieces for the most important events of their lives, such as weddings and important occasions of note. In addition, Stitch-in-Time will target customers who require high-quality embroidery for business brands, brand names, monogramming and corporate gifts. An additional target market are those who require embroidery for promotional purposes.
Customer Segmentation
Stitch-in-Time will primarily target the following customer profiles:
- Individuals who seek hand embroidered pieces for unique apparel
- Individuals who seek hand embroidered wedding garments or panels
- Businesses seeking machine embroidery for promotional or business purposes
Competitive Analysis
Direct and Indirect Competitors
Stitch-in-Time will face competition from other companies with similar business profiles. A description of each competitor company is below.
StitchCraft Company
StitchCraft Company is a small-scale embroidery business located in Pierre, South Dakota. The company specializes in personalized embroidery services for individuals. Owned by Carol Sowers, the company was started in 2019 and has grown slowly, but steadily over the past few years. Much of the embroidery is done for weddings and formal occasions. There are no machine embroidery services. Each project is hand-designed, unique and presented over a space of several months before being built into a complete garment.
The embroidery thread used at StitchCraft Company is made of vegan threading. This produces a natural, almost faded-out look indicative of timeworn and precious heirloom tapestries and hand sewn pieces. Vegan threading is used throughout an entire garment to ensure uniformity and color striations that are indicative of such threads. This service is a process that takes more time than typical embroidery, hence the months-long process for the work to be completed. Ms. Sowers has been the sole owner since the company was formed and has now brought on an employee, Tracy Stinson, to oversee the accounts and assist with customers.
Thread Creations
Thread Creations is a machine embroidery company located in Bismarck, North Dakota. The company was formed in 2021 and is owned by Thomas and Carrie Nelson. Thread Creation specializes in transforming fabrics into works of art using embroidery machines to create customized embroidery designs that cater to a wide range of customers. The primary customers of Thread Creations are businesses that need apparel or sports accessories and those that require event merchandise for promotional purposes.
Thomas and Carrie Nelson have focused their business on bringing machine embroidery to every business in North Dakota and have targeted South Dakota for a second company location. The corporate branding they provide is the largest selling proposition within the embroidery industry, followed by hats and caps, shirts and other embroidered items.
Thompson Sports Outfitters
Carey Thompson, the owner of Thompson Sports Outfitters started the company in 2007 to cater to the sports teams in the greater South Dakota region. Primary customers include sports teams, schools, and athletic organizations. The company produces custom sports uniforms, jerseys, and team merchandise. The embroidery adds a professional touch to team apparel, fostering a sense of unity and pride among athletes and fans. Monogramming services for personalizing gifts and everyday items such as towels, tote bags, and baby clothing are also offered. Carey Thompson holds multi-year contracts with most high school sports departments within the South Dakota region.
Download the Embroidery business plan template (including a customizable financial model) to your computer here <–
Competitive Advantage
Stitch-in-Time will be able to offer the following advantages over their competition:
- Friendly, knowledgeable, and highly-qualified team at Stitch-in-Time.
- Comprehensive menu of embroidery designs, finished products and services.
- Superior customized designs for weddings and formal occasions. Each handmade design is unique and used once in each finished piece.
- Customer investment in the project may include designs of their choice or designs they build from heirloom items.
- All machine embroidery is offered at volume pricing and is discounted for promotional purposes.
- Stitch-in-Time offers the best pricing in town. Their pricing structure is the most cost effective compared to the competition.
Marketing Plan
Brand & Value Proposition
Stitch-in-Time will offer the unique value proposition to its clientele:
- Highly-qualified team of skilled employees that is able to provide the finest customized embroidery.
- Comprehensive menu of embroidery designs, finished products and services.
- Superior customized designs for weddings and formal occasions. Each handmade design is unique and used once in each finished piece.
- Customer investment in the project may include designs of their choice or designs they build from heirloom items.
- Unbeatable pricing to its clients; they will offer the lowest pricing in the city.
Promotions Strategy
The promotions strategy for Stitch-in-Time is as follows:
Word of Mouth/Referrals
Stitch-in-Time has built up an extensive list of contacts over the years by providing exceptional service and expertise to their former clients. The contacts and clients will follow them to their new company and help spread the word of Stitch-in-Time.
Print Advertising
Direct mail pieces will be sent two weeks prior to the launch of Stitch-in-Time offering discounts during the first month of business. These pieces will be sent to all residents within the Pierre region, as well as those within one hundred miles of the city.
Website/SEO Marketing
Stitch-in-Time will fully utilize their website. The website will be well organized, informative, and list all the services that Stitch-in-Time provides. The website will also list their contact information and offer colorful graphics and photos of their finest work. The website will engage in SEO marketing tactics so that anytime someone types in the Google or Bing search engine “embroidery company” or “embroidery near me,” Stitch-in-Time will be listed at the top of the search results.
Pricing
The pricing of Stitch-in-Time will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.
Operations Plan
The following will be the operations plan for Stitch-in-Time.
Operation Functions:
- Nancy Owens will be the owner and president of the company. She will oversee business development and manage client relations.
- Drew Crofter, lead embroidery manager, who will oversee the machinery, hand-designed pieces and handle all maintenance of the company.
- Nancy Filmore will become the Bookkeeper and Office Manager, overseeing staff and employee functions, including onboarding, and providing monthly financial records as needed.
Download the Embroidery business plan template (including a customizable financial model) to your computer here <–
Milestones:
Stitch-in-Time will have the following milestones completed in the next six months.
- 5/1/202X – Finalize contract to lease store space
- 5/15/202X – Finalize personnel and staff employment contracts for the Stitch-in-Time
- 6/1/202X – Finalize contracts for Stitch-in-Time clients
- 6/15/202X – Begin networking at industry events
- 6/22/202X – Begin moving into Stitch-in-Time store
- 7/1/202X – Stitch-in-Time opens its doors for business
Management Team
Stitch-in-Time will be owned and operated by Nancy Owens. She has over 30 years of experience in hand embroidery and machine embroidery. She brings to Stitch-in-Time a high degree of expertise and style to craft the most delicate and complex embroidery patterns, or create patterns of her own to emphasize special occasions, such as weddings and anniversaries. She learned the craft of precision-led machine embroidery when she was an employee of a large embroidery firm in South Dakota for ten years.
The management team of Stitch-in-Time includes Drew Crofter, a former employee of the machine embroidery company where she was employed. Drew’s capability to oversee production of machined embroidery became highly appreciated in the company and, now, as lead manager of the machine embroidery, Mr. Crofter brings his own expertise to the new company. She worked for one year to convince him that the new company would be his best place to lead and thrive successfully.
She also brought Nancy Filmore into the new company as the Bookkeeper and Office Manager, overseeing the accounts and finances. Ms. Fillmore was formerly the Assistant Office Manager at the same embroidery company and has now agreed to lead as Office Manager in the new Stitch-in-Time firm.
Financial Plan
Key Revenue & Costs
The revenue drivers for Stitch-in-Time are the fees they will charge to customers for their products and services.
The cost drivers will be the overhead costs required in order to staff Stitch-in-Time. The expenses will be the payroll cost, rent, utilities, inventory, office supplies, and marketing materials.
Funding Requirements and Use of Funds
Stitch-in-Time is seeking $200,000 in debt financing to launch its Stitch-in-Time. The funding will be dedicated toward securing the store space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:
- Store space build-out: $20,000
- Office equipment, supplies, and materials: $10,000
- Three months of overhead expenses (payroll, rent, utilities): $150,000
- Marketing costs: $10,000
- Working capital: $10,000
Download the Embroidery business plan template (including a customizable financial model) to your computer here <–
Key Assumptions
The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.
- Number of customers per Month: 350
- Average revenue per Month: $15,000
- Office Lease per Year: $100,000
Financial Projections
Income Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Total Revenues | $360,000 | $793,728 | $875,006 | $964,606 | $1,063,382 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $64,800 | $142,871 | $157,501 | $173,629 | $191,409 | |
| Lease | $50,000 | $51,250 | $52,531 | $53,845 | $55,191 | |
| Marketing | $10,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
| Salaries | $157,015 | $214,030 | $235,968 | $247,766 | $260,155 | |
| Initial expenditure | $10,000 | $0 | $0 | $0 | $0 | |
| Total Expenses & Costs | $291,815 | $416,151 | $454,000 | $483,240 | $514,754 | |
| EBITDA | $68,185 | $377,577 | $421,005 | $481,366 | $548,628 | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| EBIT | $41,025 | $350,417 | $393,845 | $454,206 | $521,468 | |
| Interest | $23,462 | $20,529 | $17,596 | $14,664 | $11,731 | |
| PRETAX INCOME | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Use of Net Operating Loss | $0 | $0 | $0 | $0 | $0 | |
| Taxable Income | $17,563 | $329,888 | $376,249 | $439,543 | $509,737 | |
| Income Tax Expense | $6,147 | $115,461 | $131,687 | $153,840 | $178,408 | |
| NET INCOME | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 |
Balance Sheet
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $30,000 | $33,072 | $36,459 | $40,192 | $44,308 | |
| Total Current Assets | $184,257 | $381,832 | $609,654 | $878,742 | $1,193,594 | |
| Fixed assets | $180,950 | $180,950 | $180,950 | $180,950 | $180,950 | |
| Depreciation | $27,160 | $54,320 | $81,480 | $108,640 | $135,800 | |
| Net fixed assets | $153,790 | $126,630 | $99,470 | $72,310 | $45,150 | |
| TOTAL ASSETS | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $315,831 | $270,713 | $225,594 | $180,475 | $135,356 | |
| Accounts payable | $10,800 | $11,906 | $13,125 | $14,469 | $15,951 | |
| Total Liability | $326,631 | $282,618 | $238,719 | $194,944 | $151,307 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| Total Equity | $11,416 | $225,843 | $470,405 | $756,108 | $1,087,437 | |
| TOTAL LIABILITIES & EQUITY | $338,047 | $508,462 | $709,124 | $951,052 | $1,238,744 |
Cash Flow Statement
| FY 1 | FY 2 | FY 3 | FY 4 | FY 5 | ||
|---|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | ||||||
| Net Income (Loss) | $11,416 | $214,427 | $244,562 | $285,703 | $331,329 | |
| Change in working capital | ($19,200) | ($1,966) | ($2,167) | ($2,389) | ($2,634) | |
| Depreciation | $27,160 | $27,160 | $27,160 | $27,160 | $27,160 | |
| Net Cash Flow from Operations | $19,376 | $239,621 | $269,554 | $310,473 | $355,855 | |
| CASH FLOW FROM INVESTMENTS | ||||||
| Investment | ($180,950) | $0 | $0 | $0 | $0 | |
| Net Cash Flow from Investments | ($180,950) | $0 | $0 | $0 | $0 | |
| CASH FLOW FROM FINANCING | ||||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 | |
| Cash from debt | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow from Financing | $315,831 | ($45,119) | ($45,119) | ($45,119) | ($45,119) | |
| Net Cash Flow | $154,257 | $194,502 | $224,436 | $265,355 | $310,736 | |
| Cash at Beginning of Period | $0 | $154,257 | $348,760 | $573,195 | $838,550 | |
| Cash at End of Period | $154,257 | $348,760 | $573,195 | $838,550 | $1,149,286 |
Embroidery Business Plan FAQs
What Is an Embroidery Business Plan?
An embroidery business plan is a plan to start and/or grow your embroidery business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.
You can easily complete your Embroidery business plan using our Embroidery Business Plan Template here.
What are the Main Types of Embroidery Businesses?
There are a number of different kinds of embroidery businesses, some examples include: Standard embroidery, Applique embroidery, 3D embroidery, and Specialty embroidery.
How Do You Get Funding for Your Embroidery Business Plan?
Embroidery businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.
What are the Steps To Start an Embroidery Business?
Starting an embroidery business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.
- Develop An Embroidery Business Plan - The first step in starting a business is to create a detailed embroidery business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.
- Choose Your Legal Structure - It's important to select an appropriate legal entity for your embroidery business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your embroidery business is in compliance with local laws.
- Register Your Embroidery Business - Once you have chosen a legal structure, the next step is to register your embroidery business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.
- Identify Financing Options - It’s likely that you’ll need some capital to start your embroidery business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.
- Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.
- Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.
- Acquire Necessary Embroidery Equipment & Supplies - In order to start your embroidery business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.
- Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your embroidery business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.