Thursday, September 21, 2017Embroidery's Voice and Vision

- Embroidery Business Success Tips

Chris

Join Joyce Jagger, The Embroidery Coach, as she simplifies the business of embroidery into easy-to-understand lessons for the new embroiderer. Her passion is to help get new embroiderers off to a quick start and help existing embroiderers improve their skills so that they can provide higher quality embroidery and increase their profits! Find more information about Joyce at www.TheEmbroideryCoach.com or connect with her on Facebook at www.facebook.com/TheEmbroideryCoach.

Nine Ways to Sink Your Decorated Apparel Shop – and How to Avoid Them

There have been so many changes in the decorated-apparel world, from technology to marketing, but when it comes to the financial end of the business, little has changed. It’s important to pay close attention to day-to-day operations to avoid falling into a financial crisis.


Having a superb product, soaring sales and excellent customer service help make a successful business, but if you do not keep your finances healthy, all that hard work will be in vain. Here are nine ways your embroidery business can sink, with tips on avoiding them.


1. Poor record keeping: Decorated-apparel business owners are rarely good record-keepers. Creative types rarely jump out of bed thinking, “Great, I get to do paperwork today!” However, if you want to keep your business afloat, bookkeeping is unavoidable. Keep records of your sales, purchases, production time and inventory. Otherwise, you’ll lose track of how you’ve spent your money, where your cash is going and how much inventory you have. Your records don’t have to be sophisticated; it can be as simple as a book with one page for your income and another for expenditures. Tally it up at least once a month to see how much money you’ve made.


2. Not tracking your bank balance: Do you know your exact bank balance? If you are going to write a check today, you must know that you have the money. A bounced check can damage your reputation and have a negative effect on your credit, which, in turn, can hurt dealings with suppliers. To avoid this, make sure you keep a running total in a checkbook at all times. Consider a line of credit to draw on when cash flow is low, but be sure to repay it as soon as the cash starts coming in again.


3. Poor cash flow: When working with customers, ask for at least 50% down and then get the remainder of the payment when orders are picked up. If you deliver, you must collect the remainder before leaving the products. You cannot afford to work with your money; you need to be working with your customer’s money. Carrying accounts receivables can kill your business very quickly.


4. No cost controls and purchasing the wrong items: Cash is the lifeblood of your business, so you must be disciplined when planning a new purchase. Always set a budget and shop around before buying. Don’t act on impulse. If a purchase won’t help increase sales, don’t buy it.


5. Failing to make necessary cuts: If your workload decreases, cut some of your labor costs. Keeping extra employees on in the hopes that business will pick up is a huge drain on your cash flow. If you notice a problem, address it immediately. Don’t sit back and hope things will get better, because they rarely do. If you have a product or service that’s costing you money, get rid of it. Waiting will only compound the problem.


6. Depending on a small number of customers: If even a few of those customers leave you or fail to pay on time, it can cause problems, especially if you can’t find new customers right away. It’s important to always be on the lookout for new clients. The same goes for shops that only offer one type of decoration. A shift in the economy could cause your customers to choose a more cost-effective alternative, and all of a sudden, you have no embroidery work. You must diversify and offer less expensive decorating options to keep customers, even during the tough times.


7. Not having a budget: At the beginning of each year, go over your financial reports with a fine-tooth comb. Based on your previous year’s income and expenditures, create a new budget. Look for cuts to keep costs in line. A good budget helps you stay disciplined and keep track of your expenses.


8. No contingency plan in place: All businesses, large or small, need a contingency plan, which answers the question, “What would we do if this happened?” Small one-person shops are at even a bigger risk than their larger counterparts. If you are ill and can’t work for a month or two, who will help you get through that bad time? Do you have insurance to help pay expenses and your salary? Do you have procedure manuals so that someone else can step in? You need to have a written manual for each area of your business that shows how that part of the business works, how each process is done. Don’t depend on your memory.


9. Not talking to your bank manager or loan officer: Most people try to avoid their bank manager when a financial crisis is on the horizon, but that’s the first person you should approach. Bank managers don’t like surprises. When they are kept in the dark, they may make decisions that will have a major impact on your business. Instead, go to your bank the moment you suspect a problem. Who knows? Your bank may even be able to do something to help avert the crisis.


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