The Cost of Creativity

It’s no big news that the embroidery industry is a very creative place, but realize from a business standpoint, it’s a highly technical place too.

If you’re a hobbyist, the creative side is most important to you and you probably have never gone too far down the road to figuring your business expenses and the cost of doing business.

If you’re a commercial embroiderer, you better have, because without this information you are flying blind and can easily go into the red. Red is bad. Black is good. Even just the basics will give you a picture in your head to help you make decisions that are best for your bottom line. After all, for you, you’re in it for the profit and the love of the embroidery.

First, list all your expenses for a year’s time. Everything from turning on the lights (if you have a shop) to yearly fees and subscriptions/memberships, supplies, office expenses, web cost (if you have a website) and any help (bookkeeping, accountant, web designer) everything…if you spend money on it, related to your business, count it.

Divide this total, breaking it into a monthly expense by dividing by 12 or a weekly expense dividing by 52 (weeks/year). This way you can see exactly how much work and money you need to bring in each week to break even. This is not profit, just cost to do business. If you want to know your daily “break even”, divide that weekly total by how many days you work per week. This can be scary and make you feel a bit pressured but it’s good to know.

Now, whatever this daily total is, you know that you have to exceed this to be “in the black”. You need to start pricing jobs by how long it will take you to do them, start to finish. How much do you need to make per hour? If an extra step is added, such as re-bagging the garments, the price needs to go up. To figure running time for a design: stitch count divided by machine running speed SPM (stitches per minute) = # of minutes to run. In this way, you can figure how many hours you will need to complete your order whether you have a multi head or a single head.

If you are a one person shop, it gets more difficult because you wear all the hats, i.e.: receptionist, production manager and machine operator. You can go a long way to being efficient if you schedule and organize your time. Don’t let the phone interrupt your production 50 times a day. If you have to, schedule call backs for a certain time each day and tell your customers exactly what you’re doing. If they understand that you will call them back and that you’re not letting other customers interrupt you while doing their orders, they will feel special and appreciate your attention to their jobs. Doing this will make you more efficient at the machine.

If you are a multi person shop, these figures can help you keep up with whether you can afford that new machine, an extra person to help or get another machine operator. Just so you know, a good machine operator averages around 35,000 stitches per hour.

This industry is a wonderful and creative way to make a living; you just have to be smart about your business costs and pricing. Cut expenses where you can to raise your profit margin and compete not only on pricing but quality and customer service.

Focus your time on the production and your customers and let NeedleUp take care of the digitizing for you! You’ll get professional designs that will run efficiently every time which will get you through your order faster and grow your profits exponentially.
***********************
NeedleUp Digitizing LLC is owned and operated by Donna Lehmann, a 20yr veteran of the embroidery/digitizing industry. She can be reached at NeedleUp, 303-287-6633 for digitizing, consultation and classes M-F.

Embroidery Digitizing - Mom was right!

This might be a bit on the rant side of the fence today but there’s something I just don’t get. After doing this for years and years, I still don’t understand what people don’t get about “You get what you pay for”. Now, granted, there are people who wouldn’t know good digitizing from bad, or are just willing to compromise for price sake. These are the one’s that seem shocked when they purchase digitizing from some $4/1000 online, faceless website or overseas only to get under par or inconsistent quality designs, 3-5 business days down the line where they are pushing their deadlines and go into a panic.

Did you ever wonder how these companies can charge only $4/1000 st and still stay in business? For the overseas companies the answer is obvious (and a whole other Oprah) but what about the US companies that are $4 -$6/1000? How do they pay for multiple softwares/computers, employees, overhead, and general operating expenses on that type of income? They may use some “automatic digitizing” software feature to save time which would be fine if it worked well and didn’t compromise quality; which they ALL do. That way they can pump out more design average per hour….or is that more average designs?

They may also add their editing fees on each time you request a change. And…we know how often customers change their mind or request changes…..at least 50% of the time. How often do you get designs from the digitizer that your customer never wants to change a thing? Or, the $4 price that is advertised happens to be their price for 5 day service; if you want a more normal 2 days service, it's quite a bit more.

Believe me, I know the draw of getting something you want or need for a cheaper price. And some may still say they’ve used a $4/1000 st company and gotten a decent design and they may, in fact, have. The thing is, even using the same web company each time, they will never get consistent quality because they’ll never get the same person digitizing for them each time. Plus, it’s very difficult (if not impossible) to get to actually speak to the digitizer; the person who actually created the design, to tell them what your customer wants.

BUT ITS SO MUCH CHEAPER…….

And it’s all good, paying that cheap price, until you get it to the machine. A good embroiderer understands that the final look is only half the equation. Is it alright with you if the design looks OK at the end but you tear out your hair just trying to make it through the runs on the machine. Is it fine with you that the machine is stopping and starting multiple times more than necessary due to poor pathing, giving you false thread breaks, tearing the fabric and having multiple excessive color changes?

If you’re doing this as a business, the idea is to keep your machine running to make your money (hair intact). If your designs continually slow down or stop your production, it’s time to find a new digitizer.

Wouldn’t it make more sense to find a digitizer you could speak to all the time, is consistently providing the quality you are proud to show your customers and meets your deadlines time after time so you can count on them? People, people, people, part of what you’re paying for is experience!!! Just like everything else, the good stuff cost a little more.

In the end, you’re able to provide a higher quality product and your quantity goes up because the designs run more efficiently enabling you to turn more production in a shorter time. This also helps your bottom line in labor costs and keeps your customers happy and returning!

….and who doesn’t love happy and returning customers? I sure do!

Embroidery Digitizing - Charge! - Part I

It's been a "debate" now for a couple of years; Charging for digitizing by the stitch or charging by time and complexity. AND, more recently you'll see the influx of folks charging a flat rate for any given design up to a certain stitch count.

It is my opinion that I have no idea what the flat rate people are thinking since every design is different and takes a different amount of time and skill to complete properly. Digitizing a left chest logo, from start to finish, can take anywhere from 10 minutes to hours depending on the design and experience of the digitizer. Charging this way is not efficient for either the customer or the business, which would lead me to think that they are either "eating" most of the cost of creating a complex, high stitch count design, or they let the customers with simpler lower st count designs pick up the tab on the rest of the stitches for the other customers. By charging every customer the same, are they expecting it to come out in the wash? Charging this way can tend to rush the digitizer through the process in order to finish the job so they can move on to the next design. Nuff said.

That leaves the other two, more popular ways to charge for digitizing: Stitch count and time/complexity. I hear arguments that charging by the stitch count is unfair and "old school" because you could have a simple design with a large stitch count. The nay sayers will tell you that its more precise to charge by the time it takes to complete a logo and stitch chargers can also pad the design with un-needed stitches.

I've been doing this a long time (17 yrs to be exact) and I have seen many things. I can tell you that an unscrupulous digitizer can pad time OR stitches. How would you know if the digitizer was honest about the time it took to digitize? What if the digitizer was less experienced and it took them longer than a seasoned professional? At least with a design charged by the stitch count, you could see if the design had unnecessary underlay or density.

What you need to understand, whether you pay by the stitches or by the time it takes, you're not just paying for the design. Part of what you're paying for is the digitizer's experience and creative talent to be able to turn out a production friendly design that looks fabulous, get it to you in a timely manner and be available to you if a problem arises so your production isn't down for any period of time.

That's where the most important aspect of choosing a digitizer comes in: Can you build a relationship with this person? Will this person work with you? Believe me, it will greatly benefit you in your dealings. I charge by the stitch count but take into consideration the complexity of the designs too...my customers know that I'm fair. That all comes from the relationship I spoke of...they get a few extra benefits and considerations. Search it out. Build a rapport with your digitizer. If they aren't listening to you, move on.