In 1995 my wife decided she hated her day job. The pay was meager, the commute was terrible and most importantly she felt she could achieve more with her life. At the time I was a textile machine salesmen. I sold serious industrial textile equipment which ranged from 3 ton, 15 headed embroidery machines to smaller single head embroidery machines that you can easily run out of your garage. So one day I suggested she buy a used single head machine and our business was born.
We canvased the neighborhood for local business, schools, police and fire stations for people that wanted to have their custom logo embroidered on shirts, hats and polo shirts and we found that it was pretty easy to find business. In one year the business began to grow steadily and it became similar that our single head embroidery machine was able to keep up with production.
At this point we had to make a strategic decision. Do we invest more money and grow the business? Well, we bought a 6 head embroidery machine for $ 50,000.00 (which is barely fit in our garage). The business grew and our new machine could keep pace with it quite well. We hired an employee to help run it as well.
I know what you are wondering. How much money did you make? I can tell you that there were months were we netted $ 9,000.00 per month, but that was working pretty hard and we started losing the work-life balance. Then my wife gave birth to two children and had to make another strategic decision about how hard we wanted to work. I had my own day job and was working with my wife late in the evening to help her get orders out the door. Something had to give, so this is what we decided to do.
We fired about 20% of our customers, starting with the customers that demanded net 30 and 60 day terms, and to be honest we also fired customers that were too demanding (and somewhat jerky). I am a nice guy, but I have to admit I took pleasure in firing some of these clients. The end result was we were able to still net around $ 60,000.o0 per year working on average 4 hours a day for some really nice companies that treated us with respect and paid their bills on time.
Flash forward to the present, we sold the 6 head and bought a newer, faster 4 head Barudan Embroidery Machine. We purchased it used for about $ 30,000.00. I know that looks expensive, but remember we bought the first machine, a single head, for about $ 8,000.00. If the barriers to entry in this business seem high to you … that's a good thing. It prevails everyone from being able to enter too. For example, you can get started in the screen print business for $ 1,000.00. However, look around in your neighborhood, you will quickly discover that screenprinters …