Making the Move from Part-time to Full-time Embroidery, Part 2

Before you dive headlong into a full-time business, have you considered whether you have the capital or volume of business?
May 12, 2008

By Steven Batts

Whether you've just started as a part-time embroidery business or have been operating that way for a while, you may decide one day that you want to go into business full-time. This is the route many home-based embroiderers, who represent 93% of part-time embroiderers (See chart), take into the business. So how do you know when it's right to take the plunge and go into the embroidery business full-time?

While several factors weigh into this important decision, the two most critical ones are capital and current volume of business. Capital consists of available assets, including cash and equipment that's paid for. Volume of business is the dollar amount your business currently does now.

You can go full-time with an ample amount of either one, but you shouldn’t rush full-time into a business of any kind with neither. People just starting out who have a good business plan and some working capital can make it just fine without having a full book of business to start with. Cash can carry you for several months, even up to a year, until you get the business built up to the point where it's self-sustaining.

On the other hand, if you don’t have much cash on hand but have a sufficient volume of business to keep the cash flow going, then it's safe to go full-time when the profit made from the business can replace the income you will lose from another job.

If you've been working at the business part-time, you could end up with the best scenario. While still maintaining an income from another job, you could build up business volume and pile up enough capital to carry through any lulls once you go full-time.

The scenario that doesn’t compute is going into business full-time with just an idea and a prayer. If you have no current business and no money or other resources to back it up, you'll be under the gun immediately to produce revenue. You'll be starting off the business with your back against the wall. It takes time to find customers and more time to produce the work. This is a situation where maintaining employment while you build up the business makes the most sense.

I'm no CPA. I have a very simple view of accounting: You sell stuff for more than it costs you to buy and produce. To be successful in business, full-time or part-time, you have to follow that one principle. In order to make it full-time, you simply have to have either enough money to keep you afloat until you sell enough stuff, or you have to be selling the stuff for enough already to keep you afloat. It's that simple.

Steven Batts, a 14-year veteran of the embroidery industry, is a regular speaker at the Imprinted Sportswear Shows. He owns Righteous Threads Embroidery, Greensboro, N.C., which offers digitizing, embroidery, machine maintenance and repair, and consulting. Call him at (336) 379-9380 or e-mail righteousthreads@gmail.com.

For Further Reading:
"Full-time or Part-time Embroidery: Which Business Type Is Best for You?"
"Part-Time Business Requires Full-Time Effort"
"Part-Timers Succeed in Screen Printing and Embroidery"
White Paper: "Business Longevity in the Decorated Apparel Industry"

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