Embroidery Business Plan Template
Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their embroidery businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through an embroidery business plan template step-by-step so you can create your plan today.
What is an Embroidery Business Plan?
A business plan provides a snapshot of your embroidery business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan for an Embroidery Business
If you’re looking to start an embroidery business, or grow your existing embroidery business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your embroidery business in order to improve your chances of success. Your embroidery business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for Embroidery Businesses
With regards to funding, the main sources of funding for an embroidery business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for embroidery businesses.
Embroidery Business Plan Template
If you want to start an embroidery business or expand your current one, you need a business plan. Below are links to each section of your embroidery business plan template:
Executive Summary
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of embroidery business you are operating and its status. For example, are you a startup, do you have an embroidery business that you would like to grow, or are you operating in multiple cities?
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the embroidery industry. Discuss the type of embroidery business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
Company Analysis
In your company analysis, you will detail the type of embroidery business you are operating.
For example, you might operate one of the following types of embroidery businesses:
- Standard embroidery: this type of embroidery service uses digitized artwork, or with lettering greater than ¼” in height. Rayon and polyester fibers are most commonly used in this type of business.
- Applique embroidery: this type of embroidery is popular for uniforms, sweatshirts, and jackets.
- 3D embroidery: this type of embroidery uses foam to add dimension, and is available in a variety of thicknesses.
- Specialty embroidery: this type of embroidery uses special fibers or decorations, such as yarn and sequins.
In addition to explaining the type of embroidery business you will operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of pieces embroidered, number of positive reviews, number of contracts, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Industry Analysis
In your industry analysis, you need to provide an overview of the embroidery industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the embroidery industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy, particularly if your research identifies market trends.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your embroidery business plan:
- How big is the embroidery industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your embroidery business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
Customer Analysis
The customer analysis section of your embroidery business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: schools, promotional product businesses, governments, and apparel manufacturers.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of embroidery business you operate. Clearly, school athletic departments would respond to different marketing promotions than apparel manufacturers, for example.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most embroidery businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
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Competitive Analysis
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other embroidery businesses.
Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes imports, and manufacturers’ in-house embroidery services. You need to mention such competition as well.
With regards to direct competition, you want to describe the other embroidery businesses with which you compete. Most likely, your direct competitors will be other embroiderers in your area.
For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
- What types of customers do they serve?
- What types of embroidery do they offer (standard, 3D, etc.)?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide a broader range of embroidery options, like special fibers, more colors, etc.?
- Will you provide specialty techniques that your competitors don’t offer?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Marketing Plan
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For an embroidery business plan, your marketing plan should include the following:
Product: In the product section, you should reiterate the type of embroidery company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to standard embroidery, will you also offer 3D embroidery?
Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the products and services you offer and their prices.
Place: Place refers to the location of your embroidery company. Document your location and mention how the location will impact your success. For example, is your embroidery business located in a busy retail district or shopping plaza, etc. Discuss how your location might be the ideal location for your customers.
Promotions: The final part of your embroidery marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:
- Advertising in local papers and magazines
- Reaching out to local websites
- Networking
- Flyers
- Social media marketing
- Local radio advertising
Operations Plan
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your embroidery business, including sourcing inputs, consulting on designs, programming the machine, fulfilling orders, marketing, and meeting with potential customers.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to embroider your 500th jacket, or when you hope to reach $X in revenue. It could also be when you expect to expand your embroidery business to a new location.
Management Team
To demonstrate your embroidery business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally you and/or your team members have direct experience in managing embroidery businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in embroidery or successfully running small promotional products businesses.
Financial Plan
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
Income Statement: an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you have contracts with area school athletic departments, or partner with a gift shop? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets: Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your embroidery business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement: Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing an embroidery business:
- Location build-out including design fees, construction, etc.
- Cost of equipment and supplies
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
Appendix
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your workshop location lease or any production contracts you have signed or details on partnerships you have formed.
Summary
Putting together a business plan for your embroidery business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the embroidery industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful embroidery business.
Finish Your Embroidery Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your Embroidery business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
OR, Let Us Develop Your Plan For You
Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.
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