ALWAYS do your embroidery first...............and then trim down to the in-finished size you need............One thing to consider, if you will be quilting this yourself, is how you will quilt around the embroidery design..........If you are going to send to a long arm quilter, this then requires custom quilting, and will be more expensive.
If you are going to be using an outline type of embroidery to actually quilt the block, batting and backing, you would need to have the entire top pieced,, and then do your outline (redwork type) quilting/embroidery with that block hooped..............Hope this helps you some..