Starting an embroidery and direct to garment printing business by Dean Armando

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Starting an Embroidery and Garment printing Business Apparel decorating is a 47 billion dollar a year industry that offers entrepreneurs an enormous amount of opportunities. Everyone is looking for a real start‐up business opportunity. Starting an embroidery business has all the key ingredients that many people are looking for, including creativity, working from home, ability to work in any niche, huge profit potential and setting your own schedule. The embroidery industry (decorated apparel industry) has been expanding and evolving to the point where every niche is a profitable opportunity. We know it’s important to get as much information as you can about an industry before you buy into it, so we decided to put together this Embroidery and DTG Business Start‐up Plan. This information will help guide you through the thought process and give you a foundation of knowledge if you are thinking about starting an Embroidery business or T‐ shirt printing business. Starting an Embroidery Business or Garment Printing Business Now that you are interested in the embroidery and direct to garment printing industry, you probably have been looking harder at embroidery and noticing it everywhere you go. I’m sure you are surprised to see how much embroidery and garment printing you look at everyday. Caps, shirts, jackets, bags, linens, uniforms and more are decorated with all types of embroidery and printing techniques. Whether its corporate logos, monograms, club names or stylish T‐shirt designs, you can understand how the embroidery and the direct to garment market has turned into a 47 Billion dollar a year industry. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

So, who makes all of these embroidered and printed goods? While most of today’s fashion embroidery is produced by large embroidery and screen printing companies, smaller, local shops create the majority of other items. In most cases, the local school or business would rather work with someone they know locally than send it out of town to some larger embroiderer they can’t deal with face to face. That’s where you come in. If you think about it, right now, you could probably put together a list of embroidery and digital print customers just from the people you know personally. And, that’s just the beginning. What are some reasons people want to start an embroidery or t‐shirt printing business? There are a lot of reasons as to why someone might want to start their own apparel decorating business. People like the idea of being their own boss and no longer having to work for anyone else. Starting your own business provides the potential for financial security and allows you to use your own skills and knowledge in a creative and challenging way. • It's very profitable – Numbers don’t lie. With the right business plan and disciplined marketing, your business can grow at an unbelievable rate. • Everyone buys embroidered goods. All types of business and organizations buy embroidered or printed clothing and other decorated goods to help build brand identity or communicate a message. We have become a customized nation and are always looking for individualized, "design your own" type products. In fact, over 70% of Americans wear embroidered or printed clothing everyday. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

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You can operate your business full‐time or part‐time in home or at a shop. The bulk of embroiderers work from home. There are many reasons why, however the main reason is that it usually starts out as a second source of income. People continue to work a job while getting the business off the ground or use it as retirement income. You don't need special skills to operate embroidery equipment or a digital printer, just proper training. With the new embroidery machines and digital garment printers on the market, applying embroidery and logos is easy, however producing high‐quality, commercial embroidery and digital prints that can be sold to anyone does take time to master. Easy to market, easy to understand and it's a "Non‐Threatening" sale....people love to talk about embroidering or printing their logo. Being your own boss of an embroidery business means making your own hours and using your creativity to build your business. You don't need a fortune to get started and with very little work, you can cover your monthly cost very easily. A profitable embroidery business can be built with a simple single‐head machine for very little investment.

Now it's time to do some research for your embroidery and garment printing business Embroidery and Garment Printing Business Research One of the most comprehensive sources of information for the entrepreneur is the United States Small Business Administration www.sba.gov/starting_business/planning/basic.html. They have everything from planning, marketing, legal, financing and tax issues for anyone wanting to start a small business. There's a step‐by‐step tutorial on writing a business plan and even a start‐up kit for the budding entrepreneur. That's just the beginning; the site is loaded with details on various regulations and links to all sorts of helpful services. In addition to doing general research, you'll also need to spend as much time as possible specifically on the embroidery and garment printing industry. The following links are for magazines that can help you learn more about the embroidery and direct to garment industry. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Embroidery Publications Stitches Magazine Stitches, the embroidery industry's voice and vision, provides embroiderers and decorators with the latest news, trends and insights, techniques and products. Impressions Magazine This monthly publication provides news, "how‐to" features and product information for executives and managers in the embroidery, garment printing and screen‐printing industry. Printwear Magazine Printwear is published monthly For the Business of Decorated Apparel. Each issue contains a timely mix of informative how‐to articles, written by working apparel decorators and other industry authorities. Sew News Magazine Sew News magazine conveys the fun, creativity and excitement of sewing to readers of all skill levels who love to sew for themselves, their families and their homes. Embroidery Tradeshows Attending Tradeshows is one of the best ways to experience this industry first hand. This way you get a chance to see machines, software, clothing and many other products that might help you in your new business. ISS Show PrintWear Show Embroidery Mart East SGIA Embroidery and Direct to Garment Extravaganza Come prepared when you visit these shows with questions so you walk away with the answers you need to start your business: • What type of warranty does the machine come with? • Do they offer a Trade up Program or Guaranteed value? • Do their products offer free training and unlimited support? • Do they offer a toll free support phone number? • What happens if I need technical support? • What are my financing options? SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Embroidery Associations Trade Associations are important for not only learning about this industry, but getting discounts and networking with other embroidery and garment printing business owners Embroidery Trade Association ETA members are commercial embroiderers, suppliers to the industry, and others who have a keen business and professional interest in the application of business principles to the embroidery business. Members of ETA range in size from single person shops with single head machines to huge operations with many multiple head machines running multiple shifts. Specialty Graphic Imaging Association SGIA is the only international association for specialty imaging. National Network of Embroidery Professionals We save new embroiderers time and money with discounts for garments, stock designs, supplies, credit card processing, business insurance, tv commercials, 800 free hotline number for marketing and pricing support and much more! ASI | Advertising Specialty Institute ASI (Advertising Specialty Institute®) is the largest media and marketing organization serving the advertising specialty industry, with a membership of 20,000 distributor firms (sellers) and 3,500 supplier firms (manufacturers) of advertising specialties. PPAI | Promotional Products Association International PPAI‐the promotional products industry's international not‐for‐profit trade association‐ supports the growth and professionalism of promotional consultants and suppliers, and strives to educate and reinforce to the following entities‐the end buyer, the media, and prospective members to PPAI and the industry as a whole‐the important role that promotional products play in today's integrated marketing programs. After you have done some research about the embroidery and garment printing industry and decided what equipment you are interested in, it's time to take a deeper look at the different embroidery machines and DTG Garment printers that are available for starting or expanding your business. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Selecting the right DTG garment printer for your T‐shirt Printing business When it comes to DTG (digital garment printers) you need to consider the volume of business you think you may do in your chosen niche. Whether you are just starting a t‐shirt printing business or complimenting an existing embroidery shop or screen printing business, the apparel decorating machines have loads of profit potential. Adding a DTG kiosk II or a DTG HM1 to an embroidery equipment purchase could make you a one‐stop shop and open you up to thousands of dollars more in embroidery sales and printing sales. The Eclipse D1, Bullet, and Xpress digital garment printers are used for high volume printing and can print on light and dark garments. Any of these machines could start you in your own t shirt printing business, however read further if you are considering purchasing apparel decorating equipment. How do I know if DTG printing is right for Me Ink‐jet direct‐to‐garment (DTG) digital printers have captured the industry’s attention with numerous suppliers introducing cutting‐edge equipment that can quickly and easily produce some amazing looking prints. If you’ve been thinking about taking the plunge, but have questions about how to pick the right printer, here’s a guide to getting started on your shopping journey. “How do I know if DTG printing is right for me?” Inkjet direct‐to‐garment (DTG) digital printers have captured the industry’s attention with numerous suppliers introducing cutting‐edge equipment that can quickly and easily produce some amazing looking prints. If you’ve been thinking about taking the plunge, but have questions about how to pick the right printer, here’s a guide to getting started on your shopping journey. “How do I know if DTG printing is right for me?” Actually, this is an easy question to answer. Whether you’re a screen printer, embroiderer, trophy and awards dealer, sign shop or other type of business, the answer depends on this: If you’re looking to expand your decorating repertoire with the ability to handle short‐ to medium‐run orders, then DTG technology may be perfect for you. On the other hand, if you are a high volume contract shop, you have different variables to consider.

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For instance, if you have access to a group of people with a similar interest — boat enthusiasts, dog lovers, fair attendees or bike riders at motorcycle shows — then a DTG machine can be an ideal fit. The technology is well‐suited to answer high demand for small, custom orders. If you buy the right machine and know what you’re doing in terms of artwork and production, you can generate some great margins. Mass customization seems like an oxymoron, but it’s the new frontier in the apparel decoration marketplace, and some smart decorators are capitalizing on the opportunity. For instance, if your shop is primarily an embroidery operation that has been sub‐contracting screen printing, then DTG offers independence from relying on an outside source. That can bring peace of mind and reduce the risk of exposing your customer base to a potential competitor. On the other hand, you may be disappointed if you think a digital printer will enable you to produce large orders more easily and inexpensively than you can with a good crew running an automatic screenprinting press. Such unrealistic expectations will result in frustration. Further, you need a good understanding of graphics programs, or a willingness to learn, so you can feed good artwork to the digital printer and get consistent, professional results. And you must commit to learning a new garment decoration technique. Finally, the process may not fit your shop if orders are dominated by polyester or high‐ polyester content apparel, such as athletic jerseys. The inkjet DTG process is currently a cotton or high‐cotton content process. READY, SET, SHOP Assuming you’ve crunched the numbers and are ready to hit the market, how do you prepare to shop for a digital printer? First, set a realistic budget that dictates how much you’re willing to invest. As you look into financing options such as leases and bank loans, set a goal for a time period in which you’d like to return your initial investment. You also should have a basic understanding of the technology and how it works. Finally, you must have a target market in mind, whether it’s your existing customer base or an entirely new one. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Next, determine which type and size of machine to get. Picking the right digital printer requires you to have a good understanding of your business model. Unless you know exactly who you’re targeting and what type of garments you’ll be printing, you can’t make an educated decision. You need to have a projected daily output, as well as a realistic daily maximum you expect to print. It also helps to do some prioritization. Is speed more important, or is budget a bigger concern? Do you need the printer to output to non‐textiles? Is power or ease of use more significant? Does it matter if the printer can handle light shirts and dark shirts? Is power or portability your key interest? For instance, if your business model requires you to set up shop at fair grounds, you’ll obviously want to buy a digital printer that is portable and durable. THE DARKS DILEMMA A lot has been written about whether you should buy a direct to garment printer that is capable of printing on dark garments. In other words, “To white ink or not to white ink?” is the question. If you are looking to be versatile, white ink is an absolute necessity. If your business model calls for only printing light or white shirts, then you can opt not to buy a machine with white ink. A lot of the negative buzz regarding printing on darks is generated by companies whose machines cannot or do not print white ink. It only stands to reason that these companies would press you to give up a significant portion of the garment marketplace. To assess whether you should get a machine with the ability to print on dark garments, consider this: in an informal survey of garment manufacturers, we found that more than 50% of the garments they sell would be considered dark to medium in color – which means they would need white ink if they were direct to garment printed. The question becomes, are you willing to ignore that 50%+ of the marketplace? Again, understanding your business model will help you answer this question. If you will specialize in selling Holly Hobby type designs on pastel and light‐colored shirts, then SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

you’ll be fine with a printer that only outputs on light garments. If you will be selling T‐ shirts to rock bands or motorcycle enthusiasts, you’ll probably need the ability to print on darks. Just because you are not ready to use white ink at this time does not mean that you should avoid a machine that uses white ink. There are ways to configure a white ink capable machine to allow you to print without white ink to start with and then readily move up to white ink when you are ready to tackle that aspect of the marketplace. Your direct to garment equipment vendor can explain those options to you. WHAT’S WHAT With the many different machines that are available, it can be confusing to compare and evaluate them to find what’s best for your business. For starters, compare apples to apples by evaluating each printer’s true cost and speed of output. Have the same image printed at the same size on all of the machines you’re considering, and get the exact output cost and speed for that print. When you see the machine in action, it’s ideal to use your own art file that represents the type of work you’ll be doing, not an image the supplier has prepared — and, perhaps, tweaked to make the most of his printer’s output. evaluate each machine, pay particular attention to how easy it is to use; the options it has for different sizes and types of textiles; and, of course, the quality of the printing. Ask to keep the samples so you can study them closely and compare washability. Does the sample have the desired detail? Do the fades and halftones print well? Are there problem colors? How much editing did it take to make your file print well? CAVEAT EMPTOR It’s also important to evaluate the company’s reputation in the industry for quality, customer support and service. Network with other decorators who have already taken the plunge. There are several online forums where decorators from all over the U.S. (and the world) share their experiences. You will eventually purchase your printer from either a distributor or directly from the manufacturer. Make sure you know whether the distributor or the manufacturer will be your support contact and, again, research other decorators’ experiences with the service and support for your machine. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

ART SMARTS Just like any output device, a DTG digital printer requires artwork — and the output is only as good as the artwork you input. If you don’t already own clip art or have the ability to create artwork with a graphics program, you’ll either need to acquire these tools or establish relationships with freelancers who can provide it. If you have been in the traditional screen printing business, don’t think your bag of tips and techniques to tweak artwork for CMYK separations will work when preparing DTG output. There are many subtle and not‐so‐ subtle differences, and it’s worth taking a class on preparing artwork for inkjet garment printing. Software vendors and distributors offer classes, there are online courses and you can attend seminars taught by experts at any of the Imprinted Sportswear Shows. As for your computer, you won’t necessarily need a new one, but you do need plenty of RAM (memory), and you must find out if the digital printer is compatible with your system. Microsoft recently introduced Vista, a new Windows operating system. Some suppliers haven’t yet made their printing software (RIP, or raster image processor) Vista‐ compatible, though it’s likely just a matter of time before they do. Finally, it’s important to realize that success with DTG digital printing requires setting realistic expectations, and then having the training it takes to achieve those expectations. Although the technology is relatively simple to use, it still requires an investment of time and energy to get the most out of it. Schedule a training session with the supplier a few weeks after you’ve had the machine up and running. This way, your questions will be based on real‐world experiences, not hypothetical ones. If a trainer is coming to your shop, you might want to clear your production calendar so that you can focus on it without interruptions. If possible, record the training session so that you and your employees can review it later.

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So what else should you know before you start shopping to make the right decision? Don’t get too bogged down worrying about whether you’ve researched every nook and cranny of the industry and have picked the absolute perfect machine. If you follow the guidelines set in this article, you will have most likely narrowed your decision down to a finite number of valid options. When push comes to shove, many machines are fairly similar, so it’s not likely that you’ll make a terrible decision. Direct‐to‐garment digital printing is still a relatively new technology. The sooner you get started using it, the better. Don’t wait until your competitors gain an insurmountable lead on your business by using the technology and becoming experts at it. Not getting started soon with the technology? Now that would be a bad decision. Selecting the Right Embroidery Machine for your Embroidery Business A start up embroidery business usually begins with getting a single‐head embroidery machine while operating the embroidery shop out of the house. A home based embroidery business affords you the opportunity to work the hours that are right for you. Creating an embroidery business plan can help you decide whether you want to create an embroidery monogram business, screen printing business, T‐shirt printing business, commercial embroidery business or an internet based home embroidery business. Sometimes looking for an embroidery business for sale in the paper is a good way to start or going with pre‐owned embroidery equipment might better fit your budget. More computerized embroidery machine options are available today than ever before and it's important to know these options before you start your embroidery business. Single Head embroidery equipment is perfect for the startup embroiderer, however you must also look at the niche you are deciding to go after. Will the volume require a single‐head embroidery machine, 2‐head embroidery machine, 4‐head SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

embroidery machine, 6‐head embroidery machine or an even larger industrial embroidery machine? The Great Debate, New Versus Used Embroidery Machines! When evaluating your apparel decorating business objectives and needs, there is no more common a question than "Should I buy a new or used piece of embroidery equipment". If not to much consideration was taken, it would be easy to say buy a used embroidery machine like a Brother, Tajima, Barudan, Melco, Happy or SWF machine because it will definitely cost less than a new one. Or another train of thought on buying new versus used embroidery machines may be the simple fact you want to start with new embroidery equipment so that you don't have to worry about how the previous machine was maintained? Did it get oiled properly and kept clean and in tune etc? Well just as in all debates, there are usually two good answers based on qualifications. The following offers a little insight into both sides of the New Versus Used Embroidery Machine debate. When does buying a used embroidery machine make sense? There are many factors to consider when buying used embroidery equipment, let’s take a look at just a few. How old is the used embroidery machine you’re looking to buy? Are there new or used parts available in the market? Do you currently own and operate an embroidery machine, same brand or maybe this is your first machine? Are you more or less mechanically inclined, will the machine be installed by a factory technician? Is the machine still under factory warranty and if not is it being sold through an authorized agent of the brand? After asking yourself these questions, you may strongly consider purchasing a used machine with no warranty or set‐up, if you are already in the embroidery business and are more mechanically inclined than most and you have a source for parts for the machine and you are o.k. with taking a little risk in the transaction. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

You can reduce your risks by buying from a company that sells the same brand new or has a good reputation for supporting what it sells, offers set‐up as an option and can give you a meaningful warranty. In addition, you can reduce your risk further by buying a used embroidery machine that has been gone through and warranted by an authorized agent. When does buying a new embroidery machine make sense? If you are just starting in the embroidery business, IT IS EXTREMELY IMPORTANT to either buy a new embroidery machine which will include all the things you will need such as training, support, start‐up kits etc. If not a new machine, purchase your used embroidery machine from a company that can provide the same situation as if you were to buy a new machine (Even if the start‐up kits, training and support are a little extra money). When you ask any embroidery business owner, they will emphasize how important and valuable that first exposure is to the embroidery business. It is in many cases the difference between success and failure of the business. Used Embroidery Machines For Sale, Buy with Confidence! Now that we have discussed some of the pros and cons of buying new versus used embroidery equipment, let's highlight what is most important in this process. If you decide that a used machine is for you, make sure it has some kind of real warranty. If it is factory certified, that's even better and the warranty should reflect the company's willingness to support what they call used and what would be considered certified pre‐owned. The certified pre‐owned machine should be updated within reason to the highest standards and run very similar to a new machine. Used, would imply "as is" and the probability of a cash and carry type of sale (only buy this if you are confident in your technical skills!). If you are new to the embroidery business or adding this to another SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

business but have no prior embroidery experience, make sure the used machine you purchase can be sold with a "new" machine start‐up package and support. Lastly, consider the long term costs associated with a used machine that has either a limited or non‐existent warranty as it may very well cost you much more than a new machine in the long‐run. How to recognize when it is time to upgrade from your home sewing and embroidery machine to a more industrial embroidery machine and get your embroidery business started Many embroiderers and home sewing machine owners struggle with the decision as to when it is time to move into more industrial embroidery machines. To help clarify the issue of when to make the move from a home sewing machine or even a move from a commercial single‐head embroidery machine to a more industrial multi‐head embroidery machine; here are three factors to help you determine when it is the best time to move your home sewing or home embroidery business to the next level. Size Matters on Many Garments: Size does matter when doing some embroidery work. Many users of home embroidery and home sewing machines have become very creative, as sewers are known to be, by using their home embroidery machine, (such as the Brother embroidery machine “PR 600”, a Bernina equivalent or machines like the Huskavarna, also known as Viking and of course the faithful Singer Sewing/Embroidery machines) to do large field embroidery by using multiple‐hoopings per garment. For example, if you are trying to embroider a design that is outside the limits of the home machine’s hoop size, like large sweatshirt embroidery or sewing a logo on a beach towel, you will be challenged to do this type of job in a timely manner. It’s not only beach towels and sweatshirts that need embellishing but also jackets, horse blankets and etc. that are all very difficult. So, In order to recognize one of the reasons to move from that home sewing machine to a more industrial model, ask yourself “how much time am I spending on re‐hooping or fiddling with alignment issues?” If it’s more time than you're actually embroidering you may consider taking a step up to a commercial single head embroidery machine. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Not Enough Hours in The Day: If you have already taken the step to an industrial, also referred to as a commercial computerized embroidery machine, and even if you’re an old pro with a shop full of embroidery machines, there is one tell‐tale sign that doesn’t lie about the fact you need an embroidery machine that is larger, faster or both to run your business successfully. There are so many embroidery shops out there including home based businesses that operate with a head down mentality, meaning running their embroidery machines (head down) more than running their business heads up (what new business is out there to get?). What’s the solution to be a more effective embroidery shop? It is actually not that difficult; add additional embroidery capacity to your embroidery business so that you can spend less time embroidering and more time looking for additional business. Sure you may have to make some new embroidery designs for those new customers but that work will pay off when you are shipping more embroidered shirts and hats to these new found customers. More items out the door, more billing and so on; the benefits are real. This is the time to look at larger machines with greater capacity. If you build your business with good quality work while at the same time promoting, the business will come. Cooking With Fire Now! This last embroidery tip is for the avid apparel decorator who really wants the most out of their time and investment. Answer these questions about the type of embroidery jobs that you are doing as a norm. Are they short runs with many different designs? Are they longer runs with high stitch counts? Do you know the next shirt customer to walk in the door? Have you lost work to offshore embroidery shops? If you answered yes to two of these questions there are embroidery machine options that will really help your business. If you are doing short‐run embroidery jobs with a lot of change in designs, then consider looking at the Dual‐Function Embroidery Machine Series, which ranges from 2‐12 heads (the answer to your embroidery problems are there, this is the most flexible industrial embroidery machine in the market). SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

If you are loosing work to offshore embroidery competition it is probably on higher stitch‐count designs or large runs that are hard to beat from a cost perspective. The ultimate solution here is the all new Dream Machine Series ranging from 2‐54 heads (The fastest Industrial Strength Embroidery Machines in the World). These machines will reduce your labor costs, increase production, decrease shop space requirements and allow your embroidery business to win back deals for the domestic market. At the end of the day, there are many successful embroidery shops that have recognized when it was time to invest in additional or upgraded embroidery machines and when you meet one, ask them how they did it. Most are sure to answer you with a smile (embroiders are good like that). After you have figured out what type of embroidery machine or garment printer would be good for your business, it's time to Target your Market or find the Niche that works for you Finding your Embroidery and Garment Printing Business Market or Niche Target your Market The key to establishing a successful and profitable embroidery business is targeting the market that best suits your skills, capabilities and interests. To do this, you need to understand yourself, your business and the market you’re trying to sell to. A lot of our customers have started by going after the business they are best‐connected with: their children's school, equestrian fans or even simply local businesses around their areas. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Understanding your niche will help you decide: • What you will focus on embroidering (shirts, jackets, caps, etc.). • How many items per day it would take to cover your costs. • The type of designs you will use or need to buy. • What level of software you will need (do you need digitizing software?). You'll need to learn about the competition and figure out what will set your business apart. You have to find your niche and figure out who are your potential customers. You can do this by checking the yellow pages, Chamber of Commerce, finding resources at the library or on the internet. Consider your personal interests. Like we said before, do you like sports? Enjoy boating? Are you a dog lover? Maybe you spend your free time combing the beaches for unusual shells. Whatever your hobby, the point is to think about what potential markets might be developed based on your specific interests. Be realistic about your available finances. Some markets will require a higher initial investment than others. Determine what your operating budget is and stick with it, especially in the beginning. Search out markets that suit your present financial situation. Leasing equipment can also get you in business easier and with less start up costs Do your research. Another way is to start with the Yellow Pages and see how many embroiderers are in your area? What are their specialties? Compile a comparison chart of prices and services. Is there a particular niche that is not being covered? Make a list of the different groups and organizations in your area. You will find that almost every organization uses embroidery or would like to. You also need to understand that with every embroidery and garment printing niche, there is an unlimited array of product opportunities available. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

WHAT CAN YOU DECORATE? • Aerobics Wear • Award Ribbons • Blouses • Christmas Stockings • Dancewear • Golf Bags • Monogram Shirts • Pillow Cases • Sweat Suits • Uniforms • Aprons • Bath Sheets • Car Mats • Coat Linings • Dog Collars • Jackets • Name Tags • Robes • Towels • Non‐textiles (Wood, plastic, ceramic, etc.) To get you started, here's a look at some potential markets and niche ideas: MARKETS TO CONSIDER • Ad Specialty Firms ‐ Just think about all the ways in which companies use these goods. There's the annual sales meeting where attendees are often given a shirt or cap embroidered with the company logo. For a company golf outing, embroidered golf towels might be presented to each golfer. Many companies either require or encourage their employees to wear apparel embroidered with the company's logo. Most of these products will be purchased through advertising specialty representatives, who sell an array of promotional products. These include such items as pens, mugs, shirts, towels, caps, key chains and totes. All are usually personalized with the company's name, logo or some sort of slogan. These people are basically brokers for different manufacturers and rely on many different sources for their goods. Since the majority of representatives don't have in‐house embroidery capabilities, they normally place their embroidery business with a local embroiderer. Therefore, your first step is to let these people know who you are. Of course, to do that, you need to know who they are. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Look in the Yellow Pages under Advertising Specialties. Then start cultivating relationships. Begin with a letter or phone call. Consider sending a sample of work that's been personalized for the individual. Stay in contact and continue to let these folks know that you are interested in doing business with them. City Hall/Local Government ‐ Small towns and municipalities can be a great source of potential business. The staffs in the town hall, police department, inspectors, recreation department and other areas all wear or would like to wear clothing embroidered with their city or departmental logo. And, there's always the need for shirts and caps for special events or a one‐of‐a‐kind jacket for a visiting dignitary or local hero or even leisure wear for off‐duty hours. How do you get into this market? It's all about connections. If you've been a city employee or a volunteer fire fighter, you've already got a strong foothold. You probably already know the right people. If not, think about your circle of friends, relatives and acquaintances. Someone close to you may know the person who makes the purchasing decisions. Ask for an introduction. People like doing business with people they know. Build your network and show what your business has to offer. Armed with an embroidered city logo, which was digitized at his expense, one embroiderer went to city hall and asked to speak to the city manager. Until then, the city had screen‐ printed the logo. After being shown the difference in quality, the city manager switched to embroidery. Along with taking advantage of personal connections, watch out for upcoming special and educational events relating to police and fire‐related occupations. With a little research on the Internet you can uncover a wealth of sales opportunities. It might be worthwhile to exhibit at some of these events. Do your homework first to make sure it would in fact be profitable. When deciding to work with governmental agencies, be sure to consider that there may be certain restrictions and guidelines to follow. Most agencies have very specific protocol they want vendors to follow. Sometimes there's a bid process. But, don't let this scare you. In some cases, you may only have to win a single bid to become the embroiderer of choice for a particular organization. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Custom Fashion or Clothing Line ‐ Consider creating your own line of embroidered fashion items to mix and match. A simple black knit dress is quickly transformed into a unique fashion statement with the addition of embroidery. Go a step further and embroider a shawl and handbag with matching designs. Develop a limited number of designs, which can be embroidered on a variety of items in various colors. Check out the suppliers to see what's available in the way of clothing. There are dozens of companies offering complete lines of inexpensive knit goods. These suddenly become more valuable when embellished with beautiful embroidery. Let your imagination run wild. Think bright colors, metallic threads, splashy designs. People are always looking for something different. You also need to determine how you will sell your creations. There are several options. You could work with existing retailers to carry your line. Or, you could open your own location, create a catalog or sell over the Internet. Do your research and determine what will best suit your particular needs. Corporate Uniforms and other attire ‐ The explosion of business casual wear has left its impact on today's embroidery market. Gone are the suits and ties. They have been replaced with the more relaxed look of golf shirts, sweaters and casual button‐ downs. Most of these items are embroidered and if they are not, they can be.

While Corporate America has seen fit to open its doors to more casual attire, it has also been smart enough to embrace this trend to its promotional advantage. A majority of companies provide their employees with shirts embroidered with the company logo. Some even require these be worn as a sort of uniform. Many companies will also offer embroidered merchandise to its employees through either a sales or incentive program. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

To tap into this market, check out the various companies in your area. Find out which ones are headquartered locally. Those will probably be the easiest to deal with. Get the name of the person in charge of purchasing embroidered shirts and promotional products. This could be someone in sales or marketing. It could be an administrative assistant or even the owner of the company. Do your research up front to make sure you're directing your efforts to the right person. Once you have determined exactly who that is, make the contact and set up an appointment to show what you have to offer. Tailor your presentation to the corporate world. Include samples of corporate logos on caps and shirts. If you have time and it is a fairly simple logo, consider digitizing and embroidering their logo on a shirt or cap. Then, give it to your contact. After your initial meeting, stay in touch. While there may not be a job that day or even the next week, when something does come up, you want to make sure your name is at the top of the list of favored embroiderers. Local companies and businesses – Your largest market could very well be your local town. Up and down Main Street there are tons of business and “embroidery and garment printing opportunities”. From the baker to the dry cleaner, every business could use your service. It’s always a good practice to order some catalogs from you favorite “all purpose” clothing supplier, make a small flyer about yourself and just drop it off at ALL of the local business. Grab a menu, business card or flyer of theirs on the way out so you can follow up. Since your local town is so full of opportunity, it may be worth the investment to “practice” your embroidery digitizing on some local business logos. After you are done and if it looks good, you can make a shirt or hat and present it to that business along with more information on what you do. Schools and Universities ‐ From preschool through college, the opportunities are almost limitless. Teams, clubs, fund‐raisers, uniforms‐‐the list goes on. Starting in preschool, students learn to keep track of their belongings. Personalized backpacks, mats and towels are common. The elementary and high school years are loaded with the opportunity to play various sports and belong to all sorts of clubs. Teams require uniforms and clubs love the recognition of embroidered apparel. And, when it comes to the desire to be a recognized member, nothing beats that of the fraternal organizations flourishing on today's college campuses. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

To take advantage of any of the previously mentioned opportunities, you first need to find the person in charge of purchasing uniforms and club attire. Contact the school office. Get the names of the coaches and club advisors. Think about whom you already know. Are there people who have connections that you haven't considered? A friend whose daughter is president of the Student Government Association? A neighbor who teaches at the local high school? Or a coworker whose husband coaches the school track team? Once you've come up with the right people, give them a call. Find out what they need and how you can help meet that need. Another idea involves fund‐raising. Schools are always looking for ways to raise money and are open to ideas to make the task easier. Put together a fund‐raising program featuring items embroidered with the school's logo. Come up with an assortment of merchandise that would appeal to both parents and students. Sweatshirts, nylon jackets, backpacks and sports bags look great with the school name and mascot. Make it easy. If you do the forms and organizational work for the fund‐raiser, you increase your chances of repeat business. Build in enough profit margins so that both you and the school or organizations make money. Use your success at one school to advertise embroidery possibilities at the next location. Other Local Embroiderers and Screen‐Printers‐ Other local embroidery companies (that’s right, the competition), are often an untapped source of business. In many cases, someone you consider to be competition could turn out to be your best customer. Most companies, no matter what their current size, started with a single‐head embroidery machine that could produce only one garment or cap at a time. As these companies grow and invest in larger equipment, they often find it more profitable to contract out smaller, custom orders. Many find that a start‐up, single‐head operation is an ideal partner. These established embroiderers can be found in your local Yellow Pages under "Embroidery." Call them; introduce yourself and then follow‐up with a letter or a visit. Due to the nature of their business, screen printers get a lot of requests for embroidery. Those who don’t have in‐house embroidery capabilities will either subcontract the embroidery themselves or refer the customer to a local embroidery company. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Your first step is to identify your market. Start with the Yellow Pages under Screen Printers. Contact these companies and get acquainted with the sales reps. let them know you are a reliable source for their embroidery needs. Other Great Target Markets Include: • • • • • • • • • • • • • • • • • •

Amusement Parks Bands Car Clubs Children's Clothing Hotels, Interior Decorators Local Bars and Restaurants Ski Resorts Summer Camps Personalized Pet Accessories Air Shows Animal Shows Bath and Linen Shops Casinos Concert Promoters Little League Teams Sporting Goods Stores Uniform Companies Corporate Attire

Once you have though about what market you will target or niche you will master, you need to come up with a Embroidery Business or Garment Printing Business Plan Help Creating an Embroidery Business Plan and a Garment Printing Business Plan Once you've zeroed in on your market, it's time to make a Business Plan. Consider what type of business fits your lifestyle. Do you want to work full or part‐time? Do you dream about owning your own retail store or would you rather work out of your home? Research various locations. Consider the advantages and disadvantages of each. Think about your financial situation. Establish a budget and set specific goals for your business. NOTE: Go to www.sba.gov/starting_business/planning/basic.html for excellent information from the Small Business Administration's website on marketing and business plans. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Make a Business Plan ‐ Use this sample Embroidery Business Plan Creating a blueprint (business plan) for your embroidery or garment printing business is the foundation for your success. It's the most important (and most avoided) part of starting any business. You need to set goals and establish benchmarks for your growth. A business plan can help you see where you are, where you want to go and what you need to do to get there. Over time, you'll find out what the market demands of you and how you'll fit it. Embroidery shops come in all sizes, from a small business to giant production factories. You'll need to decide what type of shop is right for the type of business you want to do. Most embroiderer's start out in a room at home then move on to their own shop or kiosk in the mall. Good planning will help you establish a strong foundation for continued growth and success. Remember, "Falling to plan is planning to fail." Consider these good, solid tips when planning your embroidery business: • Understand what embroidery can do. Take advantage of the free classes and seminars offered by SWF East. The instructors demonstrate more than just turning a machine on and pressing START. They'll show you how to create a quality product and how to sell embroidery's unique appeal. The SWF consultants can also help you by giving you ideas of what their customers are doing, what works, how to approach certain markets, etc. • Research your numbers. You may already know how profitable embroidery can be, however do some research on what kind of pricing is in your market (stop by some embroidery shops around you and get an idea of pricing). • Visit some of the embroidery related sites and/or go to trade shows, and attend classes where you can. When visiting us at our trade shows or just browsing the Internet, you'll find lots of educational media and classes at your disposal. • Take advantage of inexpensive promotion opportunities. Whether you plan a full‐scale campaign with yellow page ads, websites, mailers and launch parties, or want to start off quietly until you get the hang of it, there are lots of inexpensive ways to entice business that can form an important part of your business. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Here are a few: 1. Embroidery and Garment Printing is "viral" in nature: anyone you embroider for becomes a walking advertisement for your business. A child's embroidered backpack generates interest from parents of the child's friends, who see it, or a few well‐done logos on shirts for a nearby store generate comments, as a couple of examples. 2. Embroider or Digital Printing on anything practical with your business name and contact info including a website. You never know whose reading. 3. Automobiles: Cheaply‐made magnets advertising your business name, phone and telephone. 4. Basic website: Basic, informational websites today are very inexpensive and can let you educate your potential customers on the benefits of embroidery and help them get to the order stage. • Services Checklist. Find the resources you'll need to set up your business and keep it running. 5. Government services for business licensing, tax ID, etc. 6. Merchant services to allow credit card processing, etc. Whether you wish to online or simply in your storefront, you can expand your potential customer base by increasing payment options that you can offer. 7. Garment suppliers ‐ there are many to choose from. Try to find at least one in your area, but also find alternates. 8. Express courier services for shipping to points beyond driving distance ‐ establish a business account with UPS, FEDEX, DHL or other similar services to take advantages of volume discounts, etc. Six Steps to Follow When Choosing an Embroidery or Garment Printing Business Name Naming your business can be a difficult task no matter how creative you are. Here are six steps every entrepreneur should follow when choosing a business name: Step 1: Identify who has a vote Everybody involved in your startup has an opinion and will want to participate in the naming process. Leave the decision in the hands of those who know the business best. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Step 2: Know yourself Understand the essence of your company. Find a hook ‐ something that's compelling about who you are ‐ and build on that from a vocabulary perspective. Step 3: Know your competition Understand what other people are doing, and dare to be different. You don't have to jump into the middle of the pack and use the same language or style as that of your competitors. Step 4: Be creative Don't come up with just two or three names. Push the envelope, and try to expand beyond the obvious by not getting stuck in generic naming solutions. Step 5: Do your homework Before you form an emotional bond with any name, find out if it is legally available for use; and make sure it won't translate oddly or offensively in another language. Step 6: Select a name It's an obvious step but often the most difficult to make. If you're waiting for an epiphany, a moment where you say, "This is the one," you could be waiting forever. Set a deadline, and just choose a name. Entrepreneurs will also find success this year by staying away from fanciful names and naming their product or company for exactly what it is. Customers value honesty and directness, and want to be reassured you're not trying to deceive them. Choose an Embroidery Business Location Embroidery Machines require true ground to function properly, and some models require a 220‐volt outlet. An embroidery machine should have a dedicated outlet, but also make sure you have enough power sources for the rest of the equipment as well. Check the machine specifications to make sure it will fit through the doorway. 1. If working from home: Research ordinances and zoning laws in your area, as you may need to get a license before you can run a business from your home. It's also suggested you get a dedicated phone line for conducting business. 2. If renting a retail space: The biggest drawback to renting space is cost. Decide how much you are willing to spend and be sure to add the expense in your pricing structure. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Design your Embroidery or Garment Printing Shop Space Keeping your target market in mind, consider how much space you will need to run your embroidery or garment printing business based on the following list: 1. Volume: the number of items you will produce per day 2. Keep the type of designs you will use in mind (lettering, digitizing, etc.) 3. Inventory: you will need to store both blank and finished products and supplies 4. Room to operate machine, walk around equipment, and keep fire exits clear 5. Space for a work table 6. Space for a hooping area (before you sew) 7. Plans for a computer workstation (for digitizing) Financing your Embroidery Machine or Garment Printer Where do you go for money? From your savings or your family and friends? Do you borrow money from your bank, or find out if you qualify for a loan? We have an embroidery and garment printer leasing company we work with that can help you find the right embroidery or garment printer leasing program according to your needs. You may also fill out a lease application online and get pre‐approved right away. Finding the best Embroidery and Garment Printer Supplies and Accessories Along with excellent customer service, you want to provide clients with the highest quality finished products. Your hard work, top‐notch machinery and powerful software will help you get there. But, supplies and accessories will make your work shine. You need to use top quality embroidery threads, needles, backing, DTG Inks and all the other items from a full‐line supplier. As SWF East's business partner, Colman & Company is THE source for all of your embroidery / digital printing supply needs. They offer convenient 24/7 online shopping that is fast, secure and customer friendly. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Below is a link to a sample Embroidery Business Plan, that can also be used for the Garment Printing Business. Look this over to help you get started Sample Embroidery Business Plan And as you are creating your Embroidery and Garment Printing Business plan, you have to start thinking about Marketing your Embroidery and Garment Printing Business. Marketing your Embroidery Business and Garment Printing Business As part of your business plan, you’ll also want to develop your marketing plan. Who is your customer? What market do you want to cater to? The options are almost limitless. Of course, to be successful, you’ll want to set your sights on one or two particular markets and direct your efforts toward those. For how many people there are in the world, there's about triple that many ideas when it comes to marketing. So how do you figure out what is best for you? Start with what you are trying to sell, what kind of group will be selling your products to, age, race, religion, sex and about a thousand other factors will come into play. It may seem overwhelming but it's not. Do your research and find out what your clients are like. Once you are able to read them, you'll be on your way to becoming a marketing success. There's not a month in a year where the embroidery business slows down so you've got to be prepared and be ready to market for that season: MONTHLY PROMOTIONS TO CONSIDER • January: White sale, ski equipment, sweaters, turtlenecks, winter wear • February: Valentine's Day • March: St. Patrick's Day, Easter wear, baby items • April: Luggage promotion, canvas bags, team uniforms, school fund Raisers. • May: Mother's Day, robes, aprons • June: Graduation, wedding, Father's Day (men's shirt and tie Monogramming) • July: Beach wear, towels, terry robes • August: Back‐to‐school, totes, backs packs, school jackets, baseball hats SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

• • • •

September: School and church fund raisers October: Halloween November: Linens for Thanksgiving and the Holidays December: Christmas and Hanukkah gifts

Marketing Ideas • Donate your services to charity fund‐raisers. Charity fund‐raisers often include auctions and raffles. This is a great way for you to give to your community and get great publicity. The organization will usually include your company name, address and phone number in their program in exchange for your donation. Check newspapers or the Chamber of Commerce for upcoming fund‐raisers. • Have stories printed about you. Write a story about your business or have someone do it for you. Then find a newspaper or magazine that is willing to publish your story. Linking your story to a newsworthy topic will help get it published. • Give away free specialty gifts. Giving away free specialty gifts with your business name, logo, photo, phone number or web site is a simple way for you to be memorable to others. • Serve on an Association Committee. You not only meet key people but you will develop relationships with them which is how you grow your credibility. Remember it is not how many contacts you have but the impression those people have of you. Taking on responsibility and following through puts you in a class above others. You will be someone that others will feel confident sending business to. • Create your Advocate list. Notice who thinks highly of you. Which friends, clients, associates think you are great? These people will be great referral sources for you because they believe in you. Explain to each of them how they can send you business. Be sure to stay in touch with them at least every thirty days. Call them, send them a note, have lunch with them or send them business. • Call, mail or email the top 20% of your customers an irresistible offer for an immediate cash bonus. • Shift the emphasis of your website from a sales tool, to a vehicle to begin a relationship with your potential customers. You do this by offering valuable free information or products in return for their contact details. • Make sure that all of your Marketing copy is a personal communication to the person reading it talking about their needs and desires, rather than a dull description of you and your business. • If you haven't done so already, test pay per click advertising. It's revolutionizing Marketing and could revolutionize your business. • Test a change in the headline on your advertising. It's one of the key differences that can increase response. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Focus on a specialized market Every one of us has some sort of hobby or passion that absorbs a good amount of our free time (and sometimes it absorbs some of our not‐so‐free time). Try to tap into the marketplace for your passion or hobby. Some examples of good vertical markets would be – boat enthusiasts, horse enthusiasts, bikers, hunters, fishermen, any type of youth sports groups, dog shows, the list goes on and on. If you are involved in any of these pursuits (or some similar type pursuit) check out the opportunities to attend and set up a booth at one of their events. A custom garment printed on demand will garner a much higher selling price than a generic event garment. If your window to sell is very limited, consider creating a couple of generic sample custom prints and take orders for the garments, promising a quick turn around time. Shirts at events like these can often sell for $25, $30 or even more, calculate the price of a priority mail envelope into the pricing and drop the prints into the mail the next day. Have your customers fill out the envelope so there are no address issues. Include DTG samples in every order of apparel that you sell If you already have an apparel decoration business, you already have a potential customer base for your new DTG printed garments. Whenever you deliver or ship an order to a customer, be sure to include a sample shirt printed on your DTG printer. It’s a good idea to print with your DTG everyday anyway, so why not develop a sample t‐shirt that shows the quality you can print and offers ideas for reasons to have shirts DTG printed – such as – family reunions, golf tournaments, charity events, baby births, milestone birthdays (Lordy, Lordy, Look Who’s 40!) etc. A white t‐shirt printed with a typical image may cost you $1.50 ‐ $2.00, and you need to run the printer anyway! This is a great way to “harvest” more income from your existing customer base, while providing your customers with an exciting new product. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Use their logo from a business card or website to generate a quick, custom sample If your business model is more business to business (B2B) – like promotional products companies – then a slightly different approach will work. Invest in one of the inexpensive business card scanners (they are available for less than $150) and simply pick up business cards from prospective clients and generate a custom shirt with their logo on it and bring it in to them. This is a great ice breaker and can very easily open doors for you, maybe for even more business other than just your direct to garment printer. With a little cleanup you may also be able to pull this feat off from potential customers’ websites (be aware that most web graphics are only 72 DPI – so you may need to do a bit of software magic!). Evaluate the t‐shirts that you have purchased in the past Take some time and lay out the t‐shirts from your “t‐shirt drawer” onto your bed. Look at the shirts and try to remember where, when and why you purchased them. In most cases, t‐shirts are an “impulse” item. No one wakes up in the morning and says to themselves or herself that they are going to go down to the Wal‐Mart and buy a t‐shirt with “fill in the blank” on it. More than likely, you are going to be walking through the Wal‐Mart and see that shirt with “fill in the blank” on it and decide to buy the t‐shirt. By evaluating your own t‐shirt buying habits you can get some insight into the reasons that folks buy them, which will help you to better market your DTG output. (By the way, make sure to put the t‐shirts back into the drawer or your spouse will not be happy!) The Secret is: you have to show them some output to generate interest! Marketing ideas for your embroidery and garment printing business will never end, however it is important to understand "Embroidery Pricing" before you go ahead with your marketing ideas.

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Learn to Price your Embroidery work for Profit

Of all of the skills necessary to start and grow any embroidery business, the one that most people have trouble with is establishing equitable pricing for their services. What is it about pricing that puts fear and sometimes panic into the minds of some embroiderers? Is it the fear of charging too much and not making a sale, or losing all your business to an under‐priced competitor? Could it be the fear of charging too little and not being able to make a profit, or not being able to raise your prices at a later date? Maybe it’s just a lack of knowledge about pricing or lack of direct experience in figuring prices that fosters these feelings. Whatever the reason, pricing your product is not that difficult and should not cause anxiety. To the contrary, prices can be figured in a simple fashion and delivered with both ease and confidence. Let’s explore some of the mechanics involved in determining a selling price as well as some tricks used by the pros to deliver prices without anxiety. When you stop to think about it, a selling price is a somewhat arbitrary number. It does, however, reflect several key items such as the costs associated with doing business, a desired profit margin, the perceived value of your product and your competitor’s selling price. By looking at each of these items, we can show you how to both conceptually and practically set a selling price for your work. COST OF DOING BUSINESS One of the most fundamental business rules states that selling price is the sum of the cost of doing business plus a profit margin. This rule (Price = Cost + Profit) implies that in order to establish a price, we have to know the cost of doing business. Costing your work is not as difficult as it sounds. You do this by simply totaling all of your business expenses, such as rent, machine lease payments (or depreciation if purchased), labor costs (include matching F.I.C.A., workman’s compensation and unemployment insurance contributions), raw material costs, phone, postage, office supplies, etc.

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Do not include garment costs in this total since we are only figuring embroidery costs at this time. Garment costs can be marked up separately and added to the derived embroidery selling prices. Next, divide this total cost figure (less garments) by the number of hours contained in the time period you used to calculate your costs. For instance, if you totaled costs on an annual basis, divide this total by the number of work hours in a year — 40 hrs. x 52 weeks = 2,080 hours. HOME RULES When you operate out of your home, do not omit the cost of rent. If you do, your total costs figure will be too low. This not only will pass along an unrealistically low price to your customer, but it also will lock you into working in your home permanently. If you someday hope to move your business into a commercial location, your prices should reflect that cost of doing business as well. When figuring a fair rent price, use a “replacement rule” value. This is the real cost to rent comparable space in a commercial location. If you are a small startup embroidery business and you operate without additional help, you should allocate a direct labor cost for yourself — even if you do not receive a regular paycheck. It is important to build this into your operating cost so that your selling price reflects labor expense. As you grow the embroidery business and add employees, the labor line item in your cost calculations will increase appropriately, adding revenue to cover the additional outlays while still maintaining a profitable margin in your pricing. After you have added all your costs and divided this total by the hours worked, you now have a cost of doing business per hour. For example, if you operate one singlehead machine and annual costs total $41,600, you should divide that by 2,080 hours per year, and you see that your cost per hour is $20. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

UNIT COST The next step is to translate this figure into a cost per unit. First you have to select a unit of measure that best represents the cost and effort invested. One of the easiest units to use is stitch count, since stitches measure output in an accurate fashion. If we use a singlehead embroidery machine properly, it should produce anywhere from 18,000 to 30,000 stitches per hour (300 to 500 stitches per minute). Using the cost figure calculated above, our cost per thousand stitches could range anywhere from $0.67 to $1.11, depending upon your own unique stitching output. At an operating cost of $20 per hour, sewing at 30,000 stitches per hour produces units at $0.67 per hour, while a machine sewing at 18,000 stitches per hour produces units at $1.11. COMFORT ZONE Profit margin is the additional money added to the unit cost in order to make a profit. If you are a one‐person shop operating one singlehead machine, this is the bonus money earned for running your business well above the hourly wage calculated in your operating cost figure. Profit is your purpose for being in business. If you are not in business to make a profit, then you are simply doing embroidery as a hobby. The amount of profit that you add to the cost base can be calculated by first setting a target dollar that you wish to earn in your business per year. If you divide that figure by the capacity of the machine, you can then amortize the profit over your production target. For example, if you want to clear $60,000 on a singlehead embroidery machine, divide that by the number of working hours in a year (2,080) and divide that number by your machine’s average stitch capacity to determine the per‐unit margin you would have to add to your selling price. If we divide $60,000 by 2,080, and then divide that by 18,000 stitches per hour, we come up with a figure of $1.60. Since we know our cost per unit at 18,000 stitches per hour is $1.11, we have to get an average unit price of $2.71 ($1.11 + $1.60) to generate a profit margin of $60,000 for a year. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

This selling price could be doable. Many embroiderers sell (and mark up) the garment as well in order to soften the embroidery price while still realizing a sizable margin off the finished product. The garment could be 30% of a keystone (a.k.a., 100%) markup on the entire project, depending on the size of the order. PERCEIVED VALUE Perception is a large portion of reality, and a lot of the value of embroidery is perceived value. The customer is not buying Emboridery Thread from you, nor is he buying machine time. He is actually buying a look or a concept. This is a perception in the buyer’s mind. If the design or the colors or the quality of the embroidery makes the buyer feel good about owning the product, he buys it. The purchase could be a practical buy or an impulse buy. Either way the buyer purchased the garment based upon perception, or how it made him feel. How we price our products should reflect this phenomenon. If we have developed a series of clever or comical designs that may appeal to a certain market, we can demand a higher price based on the popularity of those designs. The consumer is always looking for new, clever and creative ideas to embellish his wearable products. Here is where creativity can be rewarded. There is another side to perceived value. There has been some controversy in our industry for some time now about how we price. Do we price the embroidery and garment separately or as a single package price? From a profitability standpoint, it doesn’t matter how you price the product as long as you include an appropriate profit for both entities. You can sell the garment with a higher markup and include the embroidery for free, or you can charge a lower markup for the garment and add an appropriate charge for the embroidery. Either way, the customer pays the same total price, and the embroiderer makes the same profit. The difference comes in the perception of the value of the embroidery. Simply put, embroidery adds value to a garment. When you sell a blank garment, there is a reasonable price that you can charge for that garment. When it is embellished, on the other hand, the value of the garment may double; triple or even quadruple due solely to the addition of the embellishment. Ironically, the cost of the embellishment is often less SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

than the cost of the garment and yet the embellishment can add value far beyond the cost of both. When embroidery is included in the price of the embroidered garment, or when the digitizing is included in the price of the garment, we create the perception that embroidery and digitizing have no value. We condition the consumer to buy the garment and expect the embroidery for free. No matter whether it is a simple left‐chest design or a full jacket back with both front‐chest designs, we condition the customer to expect either for the same low price. COMPETITOR’S PRICING Your selling price obviously has to be competitive, but what exactly does competitive mean? Competitive does not mean that your prices have to be the lowest. Competitive means that your prices should be in line with others in your area. You can still be the most expensive in your area and remain competitive. If your prices are in line with your quality and service, only use your competitor’s prices to temper yours, not to dictate them. If your competitor’s prices are lower than yours and his quality and/or service is better, he must be doing something differently. This is when it would be time to re‐examine your methods of doing business and take corrective actions to improve your operation. PRICING TIPS Your actual selling price is established by considering all four of the above items. As you develop your pricing structure, consider the following tips and tricks to make pricing easier: • Build a price sheet to establish credibility in your pricing. A well‐organized, published price sheet carries a lot of weight. It conveys the perception of being well thought out, firm and fair. Customers are less likely to negotiate with published prices than those quoted verbally off the top of your head. • Deliver the price with confidence. How you deliver a price also can convey fairness in your prices. Making eye contact when delivering a price to your customer, and speaking clearly, conveys your confidence in your pricing structure. Likewise, avoiding eye contact and mumbling a price can convey uncertainty and invite unwanted haggling. • Offer options, not just one price. If a customer is not happy with a quoted price, offer options that compromise the amount of work to be performed rather than discount prices and reduce your profit margin. For instance, suggest doing the SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

embroidery with fewer stitches by shrinking the size or removing background colors. This eliminates stitches and reduces costs. • Do not leave the price at the end of a sentence. The price should never be the focal point of any sales transaction. There is an old trick that takes the focal point away from the price of any product or service and makes it easier to deliver the price to the customer. Don’t say, “ This item will only cost you $50.” Instead, say something like this: “This item will only cost you $50, it comes in two colors, and we can have it ready for you on Thursday.” You could also say, “This item will only cost you $50. Would you like it in navy or ash?” Either way, the emphasis is off price and placed on other terms involved in the sale. • Discounting and sales are tools to be used sparingly. Selling at cost and offering “loss leaders” are effective only if used on a short‐term basis to attract attention. Use these techniques correctly to sell other products along with the sale items. This can attract first‐time buyers, as well as revive some lost customers. As you can see, pricing does not have to be a difficult process. It may take a little bit of time to calculate your costs, but the process is not difficult. Once your prices have been established, constantly check to see that you are using the most proficient and effective tools and methods to do your work. This will contribute to lower prices and higher profit margins. In an effort to provide as much information as we can, let’s Learn more about Embroidery equipment and the Embroidery Industry and Learn more about DTG Garment Printers and the Garment Printing Industry. Learn more about Garment Printing and Direct to Garment Printers What is direct‐to‐garment (DTG) printing? (or known as apparel printing, direct to substrate printing or digital garment printing) The Decorated Apparel Industry was taken by storm in late 2004 when some of the first commercial based direct‐to‐garment printers were released. Before you can truly understand why DTG printing has become so popular, you will need to understand some background history. For years, if you wanted to print a couple of cotton shirts you would use either digital transfer paper or try to screen print the order. Both of these decorating methods have their positives, but they also come with negatives. Digital transfers allow you to create as little as a one‐off shirt via a standard desktop inkjet or laser printer. The cost to make a single transfer can range from $0.50 to $2.50 depending on what ink and paper is used by your printer. However, the SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

transfer paper is covered with a polymer (AKA adhesive) that glues the ink to the top of the shirt. The polymer typically will leave a hand where it is applied and can discolor the shirt or create a window around your graphic. New transfer papers have been released that either minimize the window or uses a 2‐step process to eliminate the window completely. Screen printing has traditionally been the decorating method of choice for most of the apparel that you see in retail stores. With screen printing, ink is only dropped down on garment where the design is, thus eliminating the undesirable window that can occur with some digital transfer paper. However, a graphic must be separated (the process that breaks the down graphic into the different colors needed to print it), a screen must be burned for each color and it requires a screen printing press to be setup. This can become a very time consuming and expensive process when you only need a few shirts. Commonly referred to as a short run, which can be as low as 1 shirt to as many as 48 depending on the size of the shop, the cost per a screen printed shirt could easily be more than what your customer is willing to pay for. With the changes in fashion leaning more toward short‐run, limited edition personalized garments, the need for a high quality solution grew. Of course, apparel decorators are never satisfied with the concept that things are never going to get any better. Manufacturers and distributors continued to push the boundaries by finding cheaper and faster ways to screen print or to creating better inkjet transfers papers with less hand or feel to them. But the introduction of DTG printing allowed us to take the positive aspects of both inkjet transfers and screen printing in a solution that could be done in a compact space. The concept of DTG printing is basically using a digital printer to lay down a textile water‐based ink that has chemical binders that allow the ink to remain on the garment without a polymer being applied to the top of the shirt like a transfer. The ink is then cured to the garment using either a heat press or a textile conveyor dryer. On average, an apparel decorator can take the artwork from a customer, put it on to a garment and get paid by the customer in less than 10 minutes. With some modification to the artwork, the decorator can personalize the next garment with a name, number(s) or different colors and produce another custom garment in minutes. That is the beauty of DTG printing – short run, personalized garments in the matter of minutes. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Which type of method should you use for imprinted apparel? When looking at garment decoration printing options, many times the decision comes down to a choice between four main options—each with its own strengths and weaknesses. For printing directly onto the garment your choices are direct to garment digital printing (DTG) and traditional screen‐printing. The other methods would be sublimation or thermal transfers. As stated above, each of these processes has its own pros and cons. You should make your decision based on the factors that are most important to your business application. Thermal Transfer Printing Thermal transfer printing involves the smallest initial investment, you simply need a conventional inkjet or color laser printer with the proper transfer paper and a heat press and you are ready to go. The most common complaints about thermal transfers are cost per print, inconsistent wash results, peeling and/or cracking of the transfer, outline of transfer paper visible on the garment and unnatural feel of shirt where the transfer was placed (heavy hand). The issue of the outline of the transfer paper can be addressed by trimming the transfer prior to pressing, which can greatly add to the production time. The typical inkjet printer using off the shelf inks and moderately priced transfer paper will print a letter sized transfer (8½" x 11") for about $1.50 ‐ $2.00. The process is simple to learn and friendly to most cotton and cotton blend garments but, it is also a process that any consumer can reproduce at home with their own desktop printer and a "t‐shirt printing kit" from their local office supply store making it somewhat difficult to sell. As inkjet and laser printer inks are translucent, thermal transfer printing is a white or light garment decoration option only. Sublimation Transfer Printing Sublimation transfers differ from thermal transfers in that they are a dye that actually transfers from the carrier paper to the garment. When heated, sublimation pigments pass from a solid state to a gas state (never becoming liquid) and imbed themselves in the fibers of the garment. Sublimation produces a print that has virtually no feel (little or no hand) on the garment. Sublimation is more expensive to get into than thermal transfer SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

printing, as you need a dedicated inkjet or color laser printer as well as specialty sublimation inks and a heat press. A full set of sublimation inks can run into the $300‐ 400 range for the typical inkjet printer toners for color lasers are sometimes $500‐600. Unlike thermal transfers, screen‐printing and direct to garment printing sublimation needs a synthetic substrate to effectively transfer to simply put it is not cotton friendly. Sublimation is definitely the process of choice for decorating non‐textiles such as mugs, plates, brass and aluminum. Certain manufacturers now make sublimation ready garments that are cotton with polyester "front". These shirts do address the issue of needing a polyester shirt (most people don't like the feel of a 100% poly shirt against their skin) but it comes at a price. A traditional 6‐ounce white cotton t‐shirt costs a little more than $1 while a similar sublimation ready shirt will cost from $5.50 ‐ $7.00 just for the blank. Add to the cost of the garment another $1.00 ‐ $2.00 for the transfer (8 1/2" x 11") and a single sublimation t‐ shirt can cost as much as $9.00 to produce. Sublimation does produce very vibrant prints when printed on the correct type garment and their wash fastness is excellent, however, they do tend to fade with exposure to sunlight, so they are not the best solution for garments that will be worn extensively outdoors. Most manufacturers of sublimation inks/toners offer specialty software for printing sublimation transfers that contain profiles for better color matching while these packages a nice, they also add additional cost and learning curve to the process of producing good output. Because of its' nature, polyester is a white, or light color garment decoration process only. Screen‐Printing When most of us think of decorated t‐shirts we think of traditional screen‐printed shirts. The process of screen‐ printing is the oldest and most proven of the four common methods of garment imprinting, it is also the most labor intensive. Screen‐printing lends itself well to large run orders as well as to simple logo work. The more colors and the smaller the order the less that traditional screen‐printing makes sense. Unlike the other three processes discussed here, with screen‐printing once the artwork is done on the computer: the work really begins. A typical 4 color screen‐print job can take 2 hours from the time the artwork is done on the computer until the first garment is printed. Once the job is set up, though, shirts can SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

be produced a very high rate. Orders of 12‐24 shirts are definitely not practical with a screen‐printing set up and many screen‐printers won’t take an order for less than 72 garments. Once everything is setup a traditionally screen‐ printed garment may only have 5‐10 cents worth of ink on it, however, the typical screen‐print job costs $10‐15 per color to set up. Because screen‐ print inks can be opaque, screen‐printing lends itself to white, light and dark garments (though printing on darks does require a bit more skill than lights and whites). Other issues of concern with screen‐printing are workspace and disposal of waste products as well as a moderate learning curve. Overall, if high volume production is your main objective, screen‐printing is a good route to explore. Learn more about SWF East's screen‐printing solutions. Direct to Garment Digital Printing (DTG) The newest and most exciting way to imprint garments is Direct to Garment Digital printing or DTG. DTG printing involves the use of a highly modified inkjet printer with specially formulated garment inks which are heat set with a heat press or tunnel dryer. Unlike screen‐printing, DTG output does not require separations, films and screens. Once your artwork is ready on the computer it is output directly onto the garment. Because of the lack of steps required for DTG, short run orders can be quickly and economically produced in a seemingly infinite number of colors. The cost of output onto a white or light colored garment is typically under 20 cents for an 8½ x 11 image and output onto a dark garment for the same size image is generally around $2.00. Production times on a DTG print are similar to those for a sublimation or thermal transfer, and generally a bit slower than those for traditional screen‐ printing (once the press is set up and printing). With DTG printing there is virtually no hand on light and white garments and minimal feel on dark garments. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

A typical 6‐8’ table provides sufficient room for your DTG printer and a heat press completes the package. DTG printing does not compete with simple one and two color screen print jobs when quantities exceed 3 or 4 dozen, but, it does fit in nicely for larger runs of more complex artwork (full color graphics). The biggest challenge most new DTG printers face is marketing their product. As the process is only a few years old, many end consumers are not familiar with the process, however, once they realize that they can design their garments from a full colored palette (as opposed to a limited palette offered by most screen‐printers) they will quickly transition to DTG output for a lot of their imprinted apparel needs. With the advent of white ink for DTG printers a whole new marketplace for short run and custom dark shirts has developed that is virtually impossible to address with any other form of garment imprinting methods. Direct to Garment Digital printing is the wave of the future for garment imprinting. Learn more about printing with white ink on a Direct to garment printer and how the DTG isn't just for garments anymore. Learn about Printing with White Ink on Digital Garment Printers</title> The pros and cons of printing with white ink Printing Dark Shirts – The Scoop Digital t‐shirt printers have forever changed the way that we view t‐shirt decoration. Once you have decided to buy a digital t‐shirt printing machine you are faced with not only a brand decision of whether you want and/or need the ability to print on dark garments. Do you buy a dtg printer that uses white ink or not? There are several pros and cons to printing with white ink. They range from the cost of the actual output, to the added maintenance to the learning curve. When you boil it all down, the decision to use white ink is really based on the market you will be addressing, your willingness to learn and your expectations of return on your investment. Buying a direct to garment printer with white ink can be a great boost to your business – if the pros outweigh the cons. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Pros and Cons of Printing Dark Shirts So, you’ve decided to add a direct to garment printer to your existing apparel decoration business or even to start a business based on direct to garment printing. One of the first things to consider is the marketplace you will be selling to – simple example – are you selling to motorcycle clubs that require Harley Davidson style shirts? If so, no doubt you will be printing a lot of black shirts – white ink is a necessity. Unfortunately, not all situations are that cut and dried. When you are considering whether your garment printer should have the ability to print on dark garments you should know and weigh the pros and cons. Why is this so important? Some printers, like the Brother GT 541 Digital Garment Printer, the Mimaki garment printer and the Sawgrass Direct Advantage printer do not offer a white ink solution at this time. Other printers, like the DTG line of t‐shirt printing machines, the Fast T‐Jet machines by US Screen Printing and the Flexi‐Jet garment ink jet printer offer white ink either as standard or an option. By determining whether white ink is necessary for your business up front, you can quickly narrow your choices and save time researching printers that do not fit your needs. Surveys of t‐shirt blank distributors confirm that a full 70% of the t‐shirts they sell for decoration are NOT white. What exactly are the pros and cons of using digital t‐shirt printers with white ink? Let’s look at the cons first: Printing with white ink costs more o true – you will generally spend as little as 20‐25 cents to print a white shirt and $2 or more to print the same image on a dark shirt o just as in any other type t‐shirt printing or decoration – the more it costs to produce, the more you need to charge o false – for short run jobs, the added ink costs far outweigh the costs of separations, films, screens, and setup associated with traditional screen printing printing with white ink is not as fast as printing a light shirt o true – when compared to printing the same image on a light colored garment with no white ink, when you have to print 2 layers as opposed to one it stands to reason that it will take longer o false – when compared with the time associated with traditional screen printing setup – short run orders done with a digital t‐shirt printer can seem amazingly fast SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Printing with white ink is more difficult than printing white shirts o true – as above, when compared to printing on light garments without white ink, dark garments are more difficult, that being said, the perception of difficulty is more based on the ease of not using white in than on the difficulty of using white ink o false – as in all methods of garment decoration, once you have learned how to properly do something, it becomes a matter of consistent repetition Printing with white ink requires more maintenance o true – as the white ink used in all digital garment printers has different properties than the color inks, you will need to do a bit more maintenance than you will on a machine without white ink. o the difference in required/recommended maintenance between a machine with white ink and one without is literally only a few minutes a day – a small price to pay for potentially increasing your customer base by a factor of 3 to 4 Now, let’s look at the pro’s of printing with white ink with your digital textile press By offering white ink printing on your DTG garment printer – you are equipped to handle all colors of garments your customer will request o true ‐ literally 70% of the imprinted t‐shirts sold every year are not white and may require at least some white ink o you can always try to “sell” your customer on using a lighter color garment that does not require white ink – the problem with this is that you risk upsetting your client • this is really THE reason for buying a machine with white ink – if you are not willing to give up potentially 70% of the business that is out there and don’t want to send your customers “somewhere else” to get their dark garments printed, you need white ink. When it comes down to it, if you feel that you can keep your digital garment printer busy full time just printing light colored garments – then the decision should be easy. If, on the other hand, you are like the majority of direct to garment printer owners, you will find that there are times when the light shirt business is not booming – then printing with white ink can be a saving grace. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Even if you do not want to print with white ink immediately, it is a good idea to buy a direct to garment printer that will allow you to print with white when you are ready. The DTG line of digital t‐shirt printers can be configured to print with or without white ink and changed at any point to fit your needs. Direct to Substrate Printing with the DTG Garment Printer Garment printing is not just for garments anymore! In today’s digital age, customers are asking for more from their vendors, and looking for one stop solutions to their needs. This fact is becoming more and more evident in the Awards & Engraving industry, with customers looking for ink printed promotional products from their Award/Engraving vendors. Enter the Direct to Garment printer (DTG), which while engineered to decorate apparel, has become a proven tool for printing non‐textiles. Having grown through the challenges of infancy, DTGs have proven to be a valuable addition to an Award/Engraving shop. With the ability to print on not only garments, but a wide variety of non‐textiles, this process has become an invaluable tool for many businesses to expand there product base amongst their existing customers. The process for printing on non‐textile goods requires a pre‐treatment to be applied to the product prior to printing, allowing the ink to properly adhere to the substrate. The second step is the actual printing, which from an ink cost is significantly less than the sublimation process. The final step is to cure the ink, which can be accommodated through application of an aerosol post‐treatment (which also provides a protective finish), heat, or open air drying, depending on the product being printed. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

The process has proven to be effective on canvas, plastic, wood, glass, ceramic tile, brick, cement, fiberglass and metal. With this versatility, the products that can be customized are too numerous to count. “I have customers send me a different product every week to sample out” says Heath Schumacher, a Product Specialist/Trainer, “and there have been only a couple items that I have been sent for which this process may not be the best solution”. Given the nature of a print head, the best results are seen on flat objects that can be printed as close to the print head as possible. Round items are tougher, but Heath has found success in printing on golf balls (print area of a nickel) and base balls (print area of a half dollar). Most recently, Heath has found ease in printing on the metal product used by Award Shops in the production of plaques, drastically reducing the print cost, and adding the ability for full color photo quality artwork to be introduced to the product. Overall, the DTG process originally engineered to embellish garments has proven to be a useful tool in the production on custom non‐textile goods (direct to substrate printing). The versatility, reduction in ink costs and relative ease of the process allows Awards and Engraving shops to provide a value added service and new product lines to their existing customer base. Learn about Embroidery, Embroidery Machines and the Embroidery Business</title> What is embroidery? (em‐broi'da‐re): The art of adorning or embellishing; to decorate with ornamental needlework. Today, this means adding dollar value to garments by embellishing them with names, corporate logos and sports symbols, to name a few. Embroidery is more than fashion or trend, it has been a form of class distinction since the days of the Egyptian Pharoahs. What is computerized embroidery (commercial embroidery/ monogramming and monogram embroidery?) Specialized embroidery machines have been designed to work with data from a computer. This data instructs the machine to stitch a particular design, determines the correct stitching order, indicates when to trim threads, and many other functions. In only a few minutes, the computerized embroidery machine will stitch a design that would take your grandmother a week to do by hand and embroider with precision accuracy that no human can match for near perfect quality! SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

How is computerized embroidery made? The artwork for embroidery design is entered into the computer. The computer transfers the robotics instructions necessary for stitching the design to the SWF machine. The machine operator places the item, such as a sweatshirt or baseball cap on the machine with a holder, hoop or cap frame. The operator also chooses the colors of thread appropriate to the design. Once the "set up" has been performed, stitching may begin by pressing the "Start" button on the machine. It will precisely and efficiently stitch the design. A typical logo on a baseball cap may take five minutes or so to stitch or roughly a dozen caps an hour. Who buys computerized embroidery? Anyone who seeks a unique identification (brand identity) or fashion on garments. You see it everywhere, on practically every work uniform and almost all club and team wear. People collect baseball style caps with embroidered designs, and it has become the standard for corporate wear as corporations become less formal in their offices. Demand is high for bowling alleys, local retail store employees, golf, country club and yacht club members. School teams and local military units always need more. You're likely to have several embroidered items in your closet! What garments can you stitch with the embroidery machine? Generally, any soft fabric that will fit under the needle of the machine can be embroidered. Shirts, hats and jackets are easy. Horse blankets, travel bags and mattress covers sometimes require special accessories in order to be embroidered. You can stitch any name, logo or ornate fashion embellishment on any suitable garment. The design size can be anywhere from less than a quarter of an inch to eleven by seventeen inches and larger. How Profitable Is Embroidery? It is customary to mark up any garment you sell; often 50 to 100% or more of its cost. Embroidering that garment is usually priced per thousand stitches and $1.00 per thousand stitches or higher is not uncommon. A single SWF embroidery machine can embroider a number of garments in a short period of time. Designs vary in size but a typical shirt logo averages about 5000 stitches. Our SWF embroidery machines are SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

capable of running at speeds of up to 1500 stitches per minute and are normally operated at 900 to 1000 s.p.m. This information presents a general picture on profitability. Embroiderers know that factors like quantity, garment material, the size and quality of the design, thread type and more will affect the time it takes to do a "job" and they adjust prices accordingly. How big is the machine that does the embroidery? SWF embroidery equipment comes in all sizes. Our standard compact models are 30 inches wide which can fit through most standard sized doors. See the machine specifications to view the size of each one. What does the computer do in the embroidery process? The computer processes the artwork from your customer in a manner that the machine can understand. The computer allows you to do lettering with a design, such as adding the date to an event (such as a golf tournament). The process works like this: • Your computer chooses a design from the selection that you have stored on disk or your customer asks you to prepare his artwork for embroidery using the process known as "digitizing." • The computer program allows you to "input" the artwork so it can be seen on the color monitor. • Add lettering or dates, re‐size the design to fit right on the garment or even edit the design for changes. • Once you save the design, it can be directly transferred to the SWF embroidery machine for stitching. The computer has made intricate and complex embroidery available to the public on a scale never thought possible! When you press the start button, does the machine simply do all the stitching like a printer? No. You don't just load and go. SWF East instructors will train you in embroidery technique. You will learn how to properly thread the machine, adjust tensions, to operate the embroidery machine control panel, proper hooping and embroidery placement techniques and more. You will be given new skills that profit you. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Where do I learn computerized embroidery? Training at SWF East is included in the purchase price of any of our Embroidery or Direct to Garment Printer systems. Learn embroidery and DTG basics, operation, application, maintenance and lettering, editing and digitizing with our Embroidery Office digitizing Software. Where do I get embroidery designs and what about names? SWF East has thousands of unique and popular stock embroidery designs for your customers to choose. Or, you can create custom designs for your customers with our advanced digitizing systems. Names and lettering are done with specialized fonts of embroidered letters that are included with our embroidery system. A large selection is available. Simply type in the lettering you want on the keyboard and it appears in the style and size you chose on the screen. You may alter the lettering in an unlimited number of ways if you wish then stitch it! Will the machine operate automatically so I can do other things while the machine runs? Yes! The SWF embroidery machine has an automatic stitching routine that does not require operator intervention during stitching. The machine will automatically start and stop and will neatly trim excess thread when necessary. All models will even change thread colors automatically. The finished embroidery is ready to display. You can work with customers, do administrative work or simply drink a cup of coffee while the machine stitches up to a fast 1200 stitches per minute. Can the business grow? Yes! And SWF East will help you do just that. We want you to purchase more embroidery equipment and embroidery supplies as your embroidery business grows, so we will help you in every way that we can. Another first from SWF East is our guaranteed Trade Up Value on both Embroidery Machines and our Garment Printers. Our Trade Up Guarantee allows you to keep your business on the leading edge of technology as well as increase our output. This is a concept the competition just can't match. We'd love to think that our reputation, award winning service and constant innovation would be enough…but we know that adding more value to our products makes our customers happy and successful. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

How much does it cost to get started? As little as $299 per month. The price includes a SWF East Embroidery Machine, software, training and the embroidery accessories you need to get started. Depending on your business requirements, we have many other complete systems at varying prices. They range from powerful single‐head combinations to our state‐of‐the‐art 12‐ head machines, complete with any level of our powerful but easy‐to‐use software. Garment Printers start in the same price range and also come complete with ink, platens, software and training. Do you offer financing? Yes! SWF East has a embroidery machine leasing company to finance these systems for up to five years or longer. Depending on the system you choose, your payments can be as low as $299 a month, and the down payment is typically just two payments. Most customers exercise the 10% buy‐out option at the end of the lease so they actually own their equipment. Some customers simply prefer to do business with their own bank. How can I contact potential customers? The people you know are your best source for the leads that become sales. Virtually every adult works somewhere and their company needs logos on corporate wear or belongs to a club or organization. For more ideas, read more on our Embroidery and Garment Printing Target Markets Learn More about the History of Embroidery and our Embroidery Glossary of Terms How SWF can help you get started? We have focused our efforts on helping people like you take the first step into the profitable world of Apparel Decorating. The key components of our company are: Best Deals We offer several full package deals that include equipment, software, training and supplies which meet the needs of start‐up embroidery businesses. Our Embroidery machine and Garment Printer Combo deal you can have a complete business that gives you unlimited possibilities and the flexibility to go after any niche, club, group, industry or product line you desire. SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

Best Value When you compare SWF equipment to other premium brands of equipment, we want you to feel how committed we are to your success, how our support is second to none and how our innovation and production speeds are the best in the industry. However, when making an investment of this size you also want to be confident that it holds its value. Our Trade up Guarantee gives your business more flexibility for growth as you gain more sales and customers than any of our competitors. The 90% Embroidery machine Trade up Guarantee and the 80% Direct to Garment Printer Trade up Guarantee. SWF Embroidery Machine and Garment Printer “Industry Exclusives” • SWF embroidery machines have a self‐oiling adjustable gravity feed wick system that eliminates the need to constantly oil your machine. Just keep the oil port filled with the designated amount of oil and the wick will disperse it throughout the whole machine. • SWF offers the only multi‐head machine with the flexible and affordable Dual Function technology that allows you to work on two different designs or products at the same time. • And if you are interested in embroidering caps, the optional Quick Change Cap System makes changing from flats to caps as easy as changing hoops. No need for tools or removing parts. The special patented technology saves production time, which is valuable to a successful embroidery business. • All this backed by the industries best 5‐year parts and labor warranty that will give you peace of mind. • Our Trade Up Value Guarantee for embroidery machines and Garment Printers is an industry exclusive that no other company can match. • Industry price/performance leader • Exclusive WIMS (White Ink Management System) is the industry’s only system designed to address the special concerns of printing white ink. • Industry’s most powerful, versatile RIP with more white ink handling options than anyone and works as a virtual driver or as a graphic interface • Offering the largest selection of direct to garment printers in the industry, ranging from single garment units up to our Xpress with a print area of 44” x 100” Training and Support Our ongoing embroidery and T‐Shirt Printing education programs let you learn at your own pace. There's a lot to learn to get your business off the ground and we've made every effort to make that training accessible and easy to obtain. SWF East, Inc. has the industry's largest online embroidery and direct to garment printer support database that offers not only repair and maintenance support, but loads of articles on starting SWF East, Inc Toll Free 1-877-793-3278 Copyright SWF East, Inc., un‐authorized re‐production prohibited

and marketing your embroidery or DTG Business. Our Video support is growing, with videos being added weekly. Video Training is by far the most helpful form of instruction and can bend that learning curve so that you can start making money instead of trying to figure out your equipment. Most Experience Our employees are experts in the industry. With over 100 years of combined experience they have the knowledge to help your business be a success by answering any questions you may have or provide you with the right resource to turn to. We hope this Guide has been helpful. If you have any questions or are interested in a no‐obligation quote, please don’t hesitate to call one of our friendly consultants.

SWF East, Inc. Toll Free 1‐877‐SWF‐EAST (793‐3278) Local‐ 813‐832‐6830 Fax‐ 813‐839‐2896 5409 S. West Shore Blvd. Tampa, FL 33611

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