You might want to trade up to one that will give you at least a 5x7 or 8x8. I embroider all my labels and I use a 10x10 hoop as my labels go at the corner of my quilts so 2 sides get stitched when I stitch down the binding. I made a template on my Embird program so I know just how much space I have for wording, then I delete the outline as I don't need it afterwards.
4x4 restricts you more than you realize.