How I'm Turning My Patch Embroidery Side Project Into A Full Time Business

Cailey Golden

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Published: August 27th, 2019

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Cailey Golden

Founder, The Patchsmith

$6.5K

revenue/mo

Founders

Employees

The Patchsmith

thepatchsmith.blogspot.com

from New York, New York, USA

started September 2017

$6,500

revenue/mo

Founders

Employees

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HotJar

Discover what books Cailey recommends to grow your business!

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Hello! Who are you and what business did you start?

Hey there, my name is Cailey Golden and I started The Patchsmith in the later months of 2017. I’m the only company based in the USA that offers no strings attached, no custom embroidered minimum patches. All of my production is done within New York City.

Within 18 months working part time, I’ve grown the company to make $6,500 a month on average. I expect to transition over to full time in 2019 or early 2020.

how-i-m-turning-my-patch-embroidery-side-project-into-a-full-time-business

What's your backstory and how did you come up with the idea?

I’ve been in the customization industry for over 10 years. I started with screen printing first. Eventually I was hired to work for the Yankees and was taught how to embroider caps. A company reached out to me for a production embroidery job and I accepted. I was taught how to run production but was left alone a lot. I ended up teaching myself a lot of different embroidery methods, it was also the place I made my first patch. I ended up creating patches for my supporters club of the local MLS team, NYCFC, and sold them for $7 each. I stopped after a few months and didn’t think about patches for awhile.

In 2017 I was going through a huge change in my life, a previous employer in the City attempted to permanently remove me from the industry, very unsuccessfully. I’d say it’s part of the reason why I’ve been able to be as successful as I have been so far. I spent months grasping at straws to come up with a business idea that I knew could do while keeping my mind busy while I was on a rollercoaster of repercussions from that employer.

I was in the bank one day after work and was sitting down with a representative, I did that a few months prior with the same guy and we spoke a bit about my career. This time he asked me if I was able to embroider patches for his fantasy football league called “Fight Club”. It was the first time anyone had ever asked for patches, I had no idea what to charge him but I knew I could definitely do it. I said yes and charged him $6 per patch for 25 of them. He was all too excited and agreed. I had no idea if I undercharged, overcharged or was right on the money but it was too easy. I was completely hooked.

Take us through the process of designing, prototyping, and manufacturing your first product.

To get started on orders I need the artwork and I take the full payment upfront. If a customer doesn’t have artwork, I charge $50 an hour to create something from scratch. My competitors don’t charge at all for artwork. I think that’s a waste of potential profit. I also charge a high rate because I don’t feel like doing graphic design 99% of the time, so it better be worth the while for me.

My competitors don’t charge at all for artwork. I think that’s a waste of potential profit.

After their art is sorted out, I send them a digital proof before I digitize the art. Once everything is approved, I use Wilcom to digitize the graphics. It’s what 95% of people in the embroidery industry use to digitize artwork so it’s machine ready. It involves tracing over the artwork to create a digital file that the computer in the embroidery machine can read to be able to punch through the fabric to stitch the design.

From here I get the design on the machine, play around with the exact thread color combination to get as close to the artwork as I can and hoop up the fabric that I’ll be embroidering the patches onto. For the fabric, I use twill that’s the same color as the satin stitch finishing of the patch for a cleaner edge or a color that is the majority of the background so it’s a lot less stitches.

When everything is set, I get the hoop onto the machine and then get the actual patch going. A typical run length is usually 12 minutes. I can run 9 patches at once. On an average day I can get 250 - 300 patches done with little problems. After they’re done running on the machine, they get backing which is usually heat seal, sometimes velcro. Small orders will be hand cut, large orders will be laser cut. Just depends on the day.

For the Smith’s Shop, which is what I call my retail store, all the patches have packaging. They all come on branded cardstock backing with instructions on how to apply the patches.

Describe the process of launching the business.

My first attempt at a website was horrific. I don’t even have screenshots and examples of it, but it was bad. I knew I would be making a website on Shopify. It’s easiest for me as someone extremely inept with web development and web design could do. I wanted to keep my costs as low as possible while growing, so I put lipstick on a pig and ran with it. The Shopify mobile app is also extremely easy to work with compared to Wordpress for me and it keeps everything in one place.

I’ve spent most of my time growing my business visually through Instagram. It’s the easiest way for people to see the product. “Seeing is believing” or so they say. I’ve done a ton of paid promotions as well. A lot of the promotion was just to gain brand recognition, this did however bring on a lot of time wasters so I’d have to weed through many messages.

I didn’t take out any loans, didn’t find investors, do a kickstarter, etc. I’m lucky that I’ve been in my industry long enough to know people that I could buy equipment from cheaply, and to know what’s a good price for other vital pieces of equipment like heat presses, laser cutters, softwares.

Since launch, what has worked to attract and retain customers?

So far I’ve been doing the same thing, Instagram promotions. I’ve spent about $15,000 on Instagram promotions sporadically, I started off very small with $5 -$10 per post and then got confident enough with the more I made. I didn’t start spending $800+ a month until September of 2018.

I was stupid and had Instagram targetting my ads for awhile based off my followers. It actually did work out well. Now I’m doing a lot of testing and am yielding much better results only very recently from more targeted ads.

I did experiment with Google, but my keywords were terrible and I was getting more people wanting direct embroidery instead of custom patches. I spent around $1,000 on Google and the same on Facebook, Instagram is definitely the bigger pull for me since it’s so visual.

My two lifesavers have been Hotjar and AHREFS. With hotjar I’ve been able to watch and see exactly what people click, how they search through my site, how much time they spend in certain places. It’s been a huge help in changing my site little by little to make it more user friendly. I had literally no idea what SEO was 2 years ago and how to implement it, and honestly it’s still not done well but I have a structure to work off now. I plan on outsourcing that once I have a better handle on the subject so I can tell if someone is actually succeeding with the money I’m spending. The little infographics, directions and descriptions AHREFS gives me was written like a 5 year old needed an explanation so it was great to learn from.

I don’t run any sales, I don’t give coupons out like candy, I don’t see the point for me. If a customer is wanting patches, they’re either going to go for extremely high quality with short turnarounds or cheap with very slow turnarounds. I also have a leg up on my direct competitors by offering no minimums and large full back pieces. I stand behind my product and I think it’s easy to convey that to a customer. When they find out my turnaround for small orders is about 5 days, compared to the 3 weeks they’d get their order from outsourcing overseas, the price doesn’t look as terrible.

Once I do get a customer, I have a decent retention rate. The business so far has mostly been B2C, so while the retention rate is just about 35%, the orders aren’t as frequent. I’m looking to change that and expand much more into B2B in the very near future with very direct marketing.

I’ve done expos as a vendor and have built up a bit local brand recognition for The Smith’s Shop, which is my small online store that has retail patches. I’m trying to pull back from that because it's a small amount of profit for the amount I put into it, it hasn’t really brought back any return customers either.

How are you doing today and what does the future look like?

Currently I’m working on a major rebrand. Logo, marketing tactics, packaging, so my sales have dropped off while I don’t do any marketing with my older promotional material. I’ve created a landing page which no other custom patch company seems to have. I’m working on more B2B customers. I’ve done a lot of work into finding event marketers for different companies and am sending them very...unique boxes that are custom made with my logo, with their companies logo embroidered as a patch. Just trying to get them to see the quality and the product.

I’ve learned to say no to customers because I simply don’t want to do their work. You get very good at reading customers after a short while and it’s easy to spot a problem customer a mile away. Instead of charging more, I turn them down. It’s not worth the stress.

Here’s the part that no one likes to post in these. I make $6,500 on average per month. There’s dips in that and then there’s months I clear $9,000. The most expensive part of the entire process is my time and knowledge. The materials cost less than a pack of gum. I make roughly 55% profit every month once all is said and done. However, 95% of that goes back into growing the business somehow.

No matter what, I make sure I always charge $50 an hour for my time to customers. If I think a single patch that’s 4x4 is super detailed and will take over an hour to embroider, I will make sure I charge well over $50.

I run ads for $500 - $1200 at a time and I usually like them to last me anywhere from 2 - 4 weeks depending on the ad. Conversion on ads tends to hover around 6%. It doesn’t cost too much for me to acquire new customers and usually after one order, I’m able to get extremely positive feedback in regards to the embroidery and patches so I take that as a win and make sure to check up and email the customers about a month after purchasing. It’s also a good way for me to ask them if they need more patches.

Short term goal for 2019 is to land three large event marketing companies and to dip my toes into live embroidery events with a marketing plan I’m working on. Long term goal is to have a large warehouse in The Bronx with many multi-head machines and laser cutters.

Through starting the business, have you learned anything particularly helpful or advantageous?

I’ve made a lot of mistakes. I’ve spent thousands on the wrong types of marketing. I had a logo that fit me and my business but not my customers and that made marketing extremely hard.

I’ve learned to let things go easier. I would get burned out trying to cram everything into one day and my life as a regular person suffered, like going to the grocery store. I never had time for that and felt guilty for walking away for a few hours. That’s changed a lot now.

I’ve learned to say no to customers because I simply don’t want to do their work. You get very good at reading customers after a short while and it’s easy to spot a problem customer a mile away. Instead of charging more, I turn them down. It’s not worth the stress.

What platform/tools do you use for your business?

My two lifesavers have been Hotjarand AHREFS.

With hotjar I’ve been able to watch and see exactly what people click, how they search through my site, how much time they spend. It’s been a huge help in changing my site little by little to make it more user friendly.

I had literally no idea what SEO was 2 years ago and how to implement it, and honestly it’s still not done well but I have a structure to work off now. I plan on outsourcing that once I have a better handle on the subject so I can tell if someone is actually succeeding with the money I’m spending. The little infographics, directions and descriptions AHREFS gives me was written like a 5 year old needed an explanation so it was great to learn from.

What have been the most influential books, podcasts, or other resources?

I know it’s not very conventional for 2019, or most business owners you read about. But I don’t read books, listen to podcasts or attend conferences. I have no time for that. I’m a learn as I go type of person and seek out videos on YouTube if I have something in that moment I need to learn about. There’s also not many books and podcasts about my industry once you pass the “How to start a starting a screen printing company” since it’s the lowest barrier for entry in the industry.

Advice for other entrepreneurs who want to get started or are just starting out?

Don’t put off opening until everything is “perfect”. Nothing will ever, ever be perfect. It only prolongs your ability to make money. Adjust and update your site, your tools and marketing as you go.

People in the customization industry always want to be the cheapest. Don’t be the cheapest. Pick one thing, be the best that you possibly can. Blow people out of the water with the quality in the work and they will pay your price. I charge almost double what you would pay from a Chinese manufacturer and I have plenty of business and foresee plenty more coming my way.

Are you looking to hire for certain positions right now?

I will never hire someone to actually do the embroidery. It’s my favorite part of the business and my biggest stress relief.

I’m always looking for salespeople to sell patches. I mostly look for young college kids who have a wide network of clubs, Greek life connections, sports connections. Then people who are event marketers for my live embroidery events.