How to Figure What to Charge for Machine Embroidery

Be sure that you charge correctly for your services.

If you are handy at machine embroidery and want to introduce your services to others, you must first figure out what to charge. You may charge for your services in a variety of ways such as charging an hourly fee or a fixed amount depending on the project; but before you set a list of prices, there are a few things you need to do to ensure that you'll make a profit

Instructions

1. Determine your hourly fee rate. A standard formula in determining your hourly rate is to add your labor and overhead costs together, add the profit you want to earn and divide by the total hours you worked. This equation gives you an idea of the minimum amount you should charge to make a profit. You can use this same equation to determine your flat fee per project as long as you know how long it will take to complete each project. Also be sure to determine your profit margin. You can charge more than the minimum amount you need to make a profit. This is called your profit margin. Ten to 20 percent profit is fairly standard for someone who is an independent contractor offering machine embroidery services.

2. Consider competition pricing. Check with others who are charging for machine embroidery in your area to compare your pricing to theirs. You do not want to be the costliest service provider in your area, so this will help you adjust your profit margin as necessary. Also keep in mind that being the embroiderer with the lowest cost will not necessarily get you business either.

3. Create a written fee agreement. Making a standard agreement contract to have on hand will give you a professional edge. Be sure to use your written fee agreement with each and every customer so that there are no issues when it is time for payment.

References

• Nolo; How Much Should You Charge for your Services; Stephen Fishman, JD

Resources

• Hirsch: Embroidery Pricing and Cost Analysis