Impressions - Embroidery 2023 - 16

out how many hours you are spending running your business over that
same time period. Divide your total cost by the number of hours you
are running your business to determine your cost per hour for labor.
Do the same thing for minutes. Once you start thinking of your costs
in minutes and even seconds, you will start to see and think about your
business in a whole different light.
Step 3: What are all the steps and processes you perform in a typical
business each day? How much is each of the following tasks costing
you in terms of your time?
* Taking an order
* Planning out the order
* Ordering the garments for each job
* Checking to see if you have all the supplies you need, including
* Making sure you have the right hoops
* Opening the box of goods once it arrives from the distributor
and checking its contents against the packing slip to make sure
the entire order is there
* Hooping the first two runs
* Running off a design and sending the sample to the customer
for approval
* Cleaning up the garment, removing backing, threads, steaming
it and packing it for pickup or shipping
* Creating the invoice
Each one of these tasks takes time, and you need to keep track of
how long each one takes so you can accurately assess what the costs are
for each of the tasks you perform along with each order.
Shown on the previous page are the production and artwork tracking
and timing forms I use to keep track of each order. The process starts
the exact moment an order is taken and continues through all the steps
of planning and manufacturing right up until it is billed. Each one of
these steps has a time and cost associated with it. The workflow should
be time studied at each stage of development to see if there is another
way or movement that can be changed or incorporated to help the
process be done faster and more efficiently.
As a side note: I have found that in most cases not enough thought
is put into the planning process before each step. This is especially important
as a small embroidery business is growing and expanding into
a larger organization.
It's vital you account for all the steps and
tasks constituting the production process for
your company's various products. Image by
PR Image Factory -
Once you have completed time studies of each process or task, you
can figure out what each process is costing you based on how many
minutes or seconds they take multiplied by the figures generated in
Step 2. Again, this is extremely important. Now you can see exactly
how much money the various production tasks you're involved in are
costing you. Add them up to create the Cost of Preparation Time for
each job, i.e., the first part of the equation above.
Step 4: Multiply your costs per minute by how many hours you run
your business per day to get your daily breakeven point. The goal here
is to determine the amount of money you need to bring in to cover your
daily operating costs. It is especially important to analyze your costs
this way if you are working part-time, or your hours tend to fluctuate,
day by day. You now know exactly what it costs you per month, hour,
minute and day to operate your business, thereby providing a rock-solid
base cost for all your pricing.
Step 5: Figure out how long you are running your embroidery machine
per hour. Now that you've calculated how much to charge for
each hour and minute of time spent working you need to do the same
thing for your embroidery machine run times. How many minutes of
each hour is your embroidery machine running? If you are only running
your embroidery machine 30 minutes per hour, your breakeven point,
or cost of machine time based on your overall cost of doing business
as calculated in steps 1 and 2, is going to double for that same hour. If
you are charging by the minute when the machine is running and not
for the time that it is sitting there doing nothing, you are losing money.
If you figure out that in an eight-hour day your machine is running
a total of four or six hours, you must divide your total daily breakeven
point (as derived in Step 4) by the four or six hours your machine is
actually running to arrive at your true breakeven cost per hour. Divide
that cost up into minutes. You now have a true cost per hour of machine
running time that you can base the second part of your pricing
equation on.
Step 6: Figure out how long it takes to run a design on your machine
by the stitch count. In the same way you determined how much
time it takes to performs the various tasks that go into completing each
order, you need to do the same thing for machine time. When you are
timing your designs, do not forget the color changes and trim times.
You are figuring the total time from start to finish, not just the stitch
count run time. Start timing as soon as you slide the hooped garment

Impressions - Embroidery 2023

Table of Contents for the Digital Edition of Impressions - Embroidery 2023

Impressions - Embroidery 2023 - Cover1
Impressions - Embroidery 2023 - Cover2
Impressions - Embroidery 2023 - 1
Impressions - Embroidery 2023 - 2
Impressions - Embroidery 2023 - 3
Impressions - Embroidery 2023 - 4
Impressions - Embroidery 2023 - 5
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