Things You'll Need
- Business expense bills
Machine and/or hand embroidery is enjoyed by many individuals. There comes a time in many people's lives when the craft goes beyond just a hobby, and selling the items is considered. The key is determining a price that is fair to both you and the individual purchasing the embroidered item. A simple process of determining the cost will produce the proper selling price. The selling price must include the cost for doing the embroidery plus a margin of profit.
Find, figure and total your business expenses including rent/house payment (divide the house payment by the amount of area used for the embroidery business to attain the monthly cost), yearly depreciation on the embroidery sewing machine, labor costs if any, phone, percentage of utility expense, any special insurance, advertising, office supplies, postage and so on.
Divide the total of the business expense by 2,080 hours. This is the total of hours in a year if you work 40 hours a week for 52 weeks. The answer is the hourly rate to charge for the embroidery. For example, your total business expense is 20,800 dollars. Divide 20,800 by 2080, which is 40 hours times 52 weeks. The answer is 10 dollars. This would be the charge per hour for business expenses.
Determine the amount of cost per item. This is the raw material such as the fabric, clothing items and thread.
Add the hourly rate and the cost for material together. Determine a margin of profit and add that to the total of the hourly rate and material cost. This figure should be competitive with prices of other individuals in the area doing similar work. This does not mean the price is the lowest, it just means the price should be in the same ball park as other embroidery items in the area.
Write down the price list per embroidery item as reference for future pricing.
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