A sewing business plan is mostly a plan for hours. The fabric in a zipper pouch costs a few dollars; the thirty minutes of cutting, sewing, turning and pressing cost more, and a sewist only has so many of them in a month. So the plan has to pay those hours honestly, find the pieces that leave the most for each one, and sew in batches wherever it can. In the example below, a sewing studio in West Virginia sells pouches, totes, aprons and pillow covers at markets and online, and ends its first year about $20,300 ahead on $55,000 of sales, after paying the sewist $20 an hour for about 800 hours. Below is a description example, each part of the plan, the first year month by month, the startup budget, and a free template.
The short version
- Describe the studio in a paragraph: what you sew, where you sell, the goals.
- Cost each piece from the fabric up: fabric and waste, notions, label, your minutes, the fees.
- Pay your hours in the cost; the profit is what's left after them.
- Sew in batches: ten pouches take a third less time each than one.
- Totes and aprons leave the most a piece; pouches sell the most.
- TaroStack keeps fabric by the yard, notions by the each, and every piece costed from what it used. More below.
Part 1: the business description
Kanawha Stitch Co., a made-up sewing studio in Charleston, West Virginia, I use in these examples, writes:
Kanawha Stitch Co. sews zipper pouches, lined canvas totes, aprons and pillow covers in small batches in a home studio, sold at two markets a month, at holiday craft fairs, and online.
Part 2: what each piece costs
| Per unit | Zipper pouch, in a batch of ten | Lined tote | Apron | Pillow cover |
|---|---|---|---|---|
| Fabric and lining, with 15% for cutting waste | $3.45 | $10.35 | $11.50 | $5.17 |
| Interfacing, zipper, straps, label and thread | $1.15 | $2.15 | $0.30 | $0.85 |
| Your time at $20 an hour | $6.67 (20 min) | $20.00 (60 min) | $15.00 (45 min) | $11.67 (35 min) |
| Selling fees, 6% | $1.38 | $4.02 | $3.30 | $2.22 |
| Variable cost | $12.65 | $36.52 | $30.10 | $19.91 |
A pouch sewn on its own takes 30 minutes; ten sewn together take about 20 each, because the fabric is cut in layers, each step runs on all ten, and the machine is threaded once per color. The time is about half of every piece's cost, or more. How each of these prices was set is in how to price handmade items, and the cost-plus method behind them is in cost plus pricing example.
Part 3: customers and prices
| Product | Price | Variable cost | Contribution | Margin | A month at full speed |
|---|---|---|---|---|---|
| Zipper pouch, sewn in batches of ten | $23.00 | $12.65 | $10.35 | 45.0% | 120 |
| Lined canvas tote | $67.00 | $36.52 | $30.48 | 45.5% | 30 |
| Apron | $55.00 | $30.10 | $24.90 | 45.3% | 40 |
| Pillow cover | $37.00 | $19.91 | $17.09 | 46.2% | 30 |
Each piece is priced to the same margin, so what differs is how much each leaves for an hour of sewing on top of the $20 already paid: about $31 for a pouch, $30 for a tote, $33 for an apron and $29 for a pillow cover. At full speed the pouches bring about $1,240 of the month's $3,670 of contribution, the aprons about $1,000, the totes about $910 and the pillow covers about $510. How many of each to sew before a craft fair is in how much inventory for a craft fair.
Part 4: the first year, month by month
Fixed costs are $390 a month: market fees ($200), the website and online shop ($40), insurance ($30), machine service averaged ($25), photos and marketing ($60), and software and card fees ($35). Sales start at 15% of full speed and reach it in month 11:
| Month | Pouches | Totes | Aprons | Pillow covers | Sales | Profit | Cash, year to date |
|---|---|---|---|---|---|---|---|
| 1 | 18 | 5 | 6 | 5 | $1,264 | $184 | $184 |
| 2 | 24 | 6 | 8 | 6 | $1,616 | $343 | $527 |
| 3 | 30 | 8 | 10 | 8 | $2,072 | $550 | $1,077 |
| 4 | 36 | 9 | 12 | 9 | $2,424 | $710 | $1,786 |
| 5 | 48 | 12 | 16 | 12 | $3,232 | $1,076 | $2,862 |
| 6 | 60 | 15 | 20 | 15 | $4,040 | $1,443 | $4,305 |
| 7 | 72 | 18 | 24 | 18 | $4,848 | $1,809 | $6,114 |
| 8 | 84 | 21 | 28 | 21 | $5,656 | $2,176 | $8,289 |
| 9 | 96 | 24 | 32 | 24 | $6,464 | $2,542 | $10,831 |
| 10 | 108 | 27 | 36 | 27 | $7,272 | $2,909 | $13,740 |
| 11 | 120 | 30 | 40 | 30 | $8,080 | $3,275 | $17,015 |
| 12 | 120 | 30 | 40 | 30 | $8,080 | $3,275 | $20,290 |
The year's sales are $55,048 and the profit $20,290. The sewist's hours, about 800 in the year and nearly 120 a month at full speed, are paid at $20 an hour in the variable costs, about $16,000, so the owner who sews earns both. Craft fairs cluster in November and December; this projection grows evenly, so sew ahead for them.
Part 5: the startup budget
| Item | Example |
|---|---|
| Industrial straight-stitch machine | $1,200 |
| Serger | $500 |
| Cutting table, mat and rotary cutters | $400 |
| First fabric and notions | $1,500 |
| Iron and pressing station | $200 |
| Market tent and display | $700 |
| Website and photos | $500 |
| Working cash | $1,500 |
| Total to start | $6,500 |
An industrial machine sews faster and longer than a home machine, which matters at 120 hours a month. At $20,300 a year, the $5,000 spent before working cash is earned back by month 7. Selling to shops that resell is harder for sewn goods, because the hours don't shrink; batch-sewn pieces are the ones to try, priced as in how to price handmade items for wholesale.
Get the template
Download the sewing business plan workbook. Four sheets: your pieces with price, variable cost and a month's volume at full speed; the first year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
Canvas in eight colors, cotton prints by the bolt, zippers in four lengths and six colors, webbing, interfacing, labels, a batch of pouches cut this week and sewn next, and finished pieces at home, at a fair and online. A notebook can't say how many yards of the navy canvas are left, how many 9-inch zippers there are, or what a tote costs now that canvas went up.
How TaroStack does it
TaroStack keeps fabric by the yard, notions by the each, and every piece costed from what it used.
Fabric and notions as stock. Fabric is bought by the bolt and used by the yard or the inch, zippers and labels by the each; TaroStack does the unit math, and counts are done on a phone, so the navy canvas left is a number.
Pieces as recipes. A tote is a recipe of its canvas, lining, straps, label and thread, and a batch of ten takes them off stock at what they cost, with the minutes it took, so each piece's cost is what it used.
Reorder before the fair. Fabric and notions come up on a reorder list in days of cover, and the price creep report shows when a supplier's canvas went up, so the $67 tote is checked against this month's cost.
| The job | Notebook | In TaroStack |
|---|---|---|
| Navy canvas left | Measure the bolt | Stock in yards |
| 9-inch zippers on hand | Count the drawer | Stock by the each |
| What a tote costs now | Last year's number | Each batch, at what it used |
| What to reorder before the fair | Guess | Reorder list in days of cover |
Counting, recipes and batches are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.