I also like Madeira thread. I'd choose poly over rayon because its cheaper, lasts longer and has less breakage. I like Emblematic 1-800-878-1235 (located in NJ) for backing because its very good and inexpensive. We do mostly polos and a soft med-heavy cutaway works great. Using a cutaway backing not only helps during the embroidery process but also helps preserve the design when the garment is washed. Some designs also need tear-away to sharpen registration. For machinery, the ability to network single head machines will give you more flexibility. For additional equipment I recommend purchasing a hooper (I like Hoop Master) and a shirt folder (Flip Fold). After you get started you might want to buy Fast Frames which are great for hooping bags, backs and sides of hats, sleeves and other items that can't easily be hooped with conventional hoops. Whoever you choose for suppliers try to use vendors that are a one day ship to you so you'll save on shipping costs.