The barrier to entry in embroidery is low — a used single-head machine and a corner of a garage will get you started. The barrier to profitability is much higher. Most new shops underestimate the same handful of things.
Machine choice comes first. A single-head is fine for personalization and small orders. A 4-head or 6-head is where real production efficiency kicks in. Buy from an established brand (Tajima, Barudan, Melco, SWF, ZSK) with local service — you will need service.
Software second. Wilcom, Pulse or Hatch are the industry standards for digitizing. If you're not planning to digitize in-house, budget for a professional digitizer instead. Outsourced digitizing is usually cheaper per logo than owning software and learning it well.
Third, blanks. Build relationships with two or three apparel decorators (S&S, SanMar, Alphabroder). Getting to trade pricing takes a resale certificate and a bit of paperwork; do it early.
Fourth, pricing. New shops chronically undercharge. A 6,000-stitch chest logo on a $15 polo should not sell for $18. Look at your realistic per-hour machine cost, add labor and overhead, and price to those numbers.
Fifth, niche. General embroidery shops compete on price. Niche shops — sports teams, corporate uniforms, motor clubs — compete on expertise and command better margins.
Finally, the emotional part: production embroidery is a stamina game. First-year shops that survive tend to be run by people who enjoy the mechanics of it. If you're only in it for the margins, look elsewhere.