Are you the creative type? Do you have an eye for colors and design and can visualize an idea? Are you looking for ways to become your own boss? If you’ve answered yes to all of these questions, then starting your own screen printing business might be the opportunity you’ve been searching for.
This guide is for people who want to take their creativity and make it work for them. It’s more than just knowing how to print cool designs on t-shirts. We’re going to walk you through what you need to know to start and run a successful screenprinting business..
Screen printing, also known as silkscreening, is a printing technique that involves stenciling a design onto a fine mesh screen and then transferring the ink onto a substrate such as fabric, plastic, or paper. The process involves several steps, including creating artwork, exposing the image onto the screen, printing, and curing the ink to ensure it does not wash out.
Normally, when we think of screen printing, we immediately think of t-shirts. Although custom apparel printing is the biggest product segment by far, making up almost 50% of the entire custom screen printing production, coffee cups, merchandise, posters, stationery, labels, uniforms, and large banners can also be screen printed.
The primary revenue source for a screenprinting business is the printing service itself. However, businesses can generate income by offering design services, selling screenprinting supplies, or even conducting workshops and classes.
Because of the relatively low initial costs to start a screen printing business, this is an excellent opportunity for someone to start small, online and from home, test the waters, fine-tune the business plan, and then gradually grow the business.
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The screen printing industry in the United States is a significant sector with a market size of $9.4 billion in 2022.1 Even though there is global competition, this is a highly fragmented industry, which means a majority of the competition is locally based and independently owned. This suggests a high level of competition but also indicates ample opportunities for new entrants.
The industry is projected to grow impressively in the coming years, with an estimated growth potential of 15.6% annually through 2030.2 This growth is driven by various factors, including technological advancements, increasing demand for custom-printed items, and the expanding applications of screen printing in industries such as fashion, advertising, and electronics.
Steps To Start A Screen Printing Business
Step 1: Write a Business Plan
Starting your own screen printing business is an exciting journey, but it can also be overwhelming. With so many things to consider and plan for, it can be tempting to jump right in and start printing without thinking through the details. But, taking the time to write a business plan is an important first step as it helps you better define your vision and establish a roadmap for the future of your business. Here are a few specific reasons why writing a business plan is important for a screen printing business.
In the world of screen printing, finding the right niche is essential. Are you going to specialize in creating custom designs for start-ups and businesses? Or perhaps you want to tap into the t-shirt and apparel market with unique prints? Maybe event and festival merchandise is your target segment. Conducting thorough market research helps you better understand the demand, who your target customers are, and their specific printing needs. This insight allows you to price your services competitively and determine which types of prints will have the highest demand.
Custom screen printing is a highly competitive industry, not just within the United States but globally as well. That’s why taking a close look at your competitors is vital for the success of your business. You need to be aware of the strategies and offerings of your competitors to differentiate yourself and stand out. Understanding your competitors’ strengths and weaknesses allows you to tailor your services and marketing efforts accordingly, carving your own path to success.
One last reason to mention about the importance of the business plan is financial projections. The projections help you estimate the initial costs required to start your screenprinting business. From equipment and materials to marketing expenses and overhead costs, clearly understanding the investment needed is important since screen printing requires significant investment. Additionally, financial projections allow you to evaluate the potential profitability of your business. This information helps you see the feasibility of your business and in setting revenue goals.
Related: How to write a business plan
Step 2: Source Funding
Launching a screen printing shop requires an investment to purchase equipment, lease a workspace, obtain inventory, and cover ongoing operating expenses before the business generates profits. There are a number of different sources of funding, which I’ll explain in more detail.
First, tally your available personal savings to invest towards startup costs. While most entrepreneurs cannot fully self-fund a business, putting your own “skin in the game” signals commitment to lenders. If personal funds fall short, outside funding will be necessary. Popular sources of funding in this industry include:
Lenders: Banks and other lending institutions are a common source of funding. They often require borrowers to invest at least 15% of their personal funds towards the total cost of the project, in addition to a good credit score and sufficient collateral. If the bank requires additional security, they may utilize a Small Business Administration (SBA) loan guarantee.
Equipment leasing: Screenprinting businesses rely heavily on equipment, which can be quite expensive. To reduce these large upfront costs, consider leasing options. This allows you to use the necessary equipment without a significant initial outlay.
Business credit cards: Business credit cards can provide quick access to funds, which can be particularly useful in managing cash flow or addressing unexpected expenses. However, they often come with high interest rates if not paid back promptly.
Friends and family: Another source of funding can be friends and family. It’s important to put any financial agreements in writing to avoid misunderstandings or strains on personal relationships.
Microloans: In cases where traditional lending options are unavailable or for smaller funding needs, microloans can be an alternative. These loans are provided by local economic development organizations and may also offer business training alongside the funding.
Step 3: Register the Business
When starting your business, taking the necessary steps to register and make your business legal is important. Requirements vary by location, but here is a general overview:
Choose a business structure: There are four common types: sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC). Each structure has unique benefits and drawbacks.
- Sole proprietorship: This is the simplest and most common structure for small businesses. As a sole proprietor, you have complete control over your business, but you are personally liable for any debts or liabilities. It’s the easiest and most cost-effective option to start.
- General partnership: If you are starting the business with someone else, a general partnership is an option. Each partner shares the responsibilities, profits, and liabilities of the business.
- Corporation: A corporation is a separate legal entity from its owners. It provides liability protection for its shareholders but has more formalities and administrative requirements.
- Limited Liability Company (LLC): An LLC combines the liability protection of a corporation with the flexibility and simplicity of a sole proprietorship or partnership.
Related: Comparison of business structures
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
IncFile - $0 plus state fees & free registered agent for 1 year!
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Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.
During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.
Obtain business licenses and permits: Specific business licensing will vary depending on the state and local requirements, and whether you operate out of your home or from a storefront. A few common ones to look out for include a sales tax permit, local business license, and occupation permit.
In addition to the business registrations, there are a few regulations to be aware of. These will vary by location, but in general:
- Waste disposal: Screen printing involves hazardous waste from inks and solvents and may require special disposal.
- Ventilation requirements: Ventilation regulations may mandate air filtration systems.
- Workplace safety rules: Occupational Safety and Health Administration (OSHA) guidelines may cover chemical handling, machine operation, etc. for a safe working environment.3
Trademarks: If you plan on printing copyrighted images, such as those for some sports teams, brands, etc., you will need to be aware of legal use (even if a customer asks, you are still liable) and obtain licensing and pay a royalty, in most cases, to sell that merchandise legally.
Step 4: Set Up Operations
Now, with funding secured and your business registered, it’s time to roll up your sleeves and get into the operational side of your screenprinting business.
Choosing the location for your business is the first decision you’ll make in this phase and will depend on your business model. If you’re leaning towards a home-based setup operating primarily online, this option offers the advantage of low overhead costs and the convenience of working from home. On the other hand, a professional storefront, while more expensive, can attract walk-in customers and lends an air of credibility to your business.
Once the location is sorted, the next big step is acquiring and setting up equipment and the workspace. In addition to equipment, displays, and supplies, you may also need graphic design software, depending on your processes and workflows.
Step 5: Hire Staff
When it comes to staffing your screen printing company, you have the option to hire employees or engage independent contractors for different roles, such as graphic designers, screen printers, and sales and marketing personnel. It’s important to understand the differences and responsibilities between the two:
Employees work directly under your business and are subject to your supervision and control. As an employer, you’re responsible for providing a range of benefits, including social security and workers’ compensation.
On the other hand, independent contractors operate as separate entities and are hired to perform specific services on a contract basis. Contractors give you more flexibility and lower costs as they handle their own taxes and benefits. However, you have less control over their work processes and schedules.
While hiring employees gives you more control and flexibility in directing their work, engaging independent contractors can offer flexibility and cost savings as you avoid payroll taxes and benefits expenses. However, it’s important to classify workers correctly to comply with labor laws and avoid misclassification issues.
Step 6: Prepare to Launch!
While we’ve covered the essential tasks, several additional tasks may need to be considered. The tasks needed will vary depending on your individual circumstances. Let’s take a look at some common ones:
Business insurance: Common types of insurance for a screen printing business may include general liability insurance to protect against third-party claims, property insurance to cover any damage or loss of equipment, and product liability insurance if you sell your printed items to customers.
Setting up bookkeeping: Setting up bookkeeping means arranging your accounting systems to handle everyday transactions, taxes, and financial statements. This could include hiring a bookkeeper or using accounting software.
Opening a business bank account: Opening a business bank account will help keep your finances organized and make it easier to track your income and expenses. This task will also simplify tax reporting and create a clear distinction between personal and business funds.
Accepting credit cards: By setting up a merchant account with a bank or payment processor, you can accept credit card payments from your clients.
Creating a marketing strategy: Now that you’re ready to open your doors, it’s time to let potential customers know about your business. This involves creating a marketing strategy that may include designing a logo to represent your brand, building a website to showcase your products, utilizing social media to engage with customers, and considering local advertising to reach your community.
Preparing for the grand opening: As you approach the launch date, you’ll need to prepare for the grand opening. This could involve planning a launch event, offering opening day discounts, or creating a press release to announce your new business.
Common Questions When Starting A Screen Printing Business
How much does it cost to start a screen printing business?
The total cost to start can range from $13,000 to $50,000, depending on various factors such as the size of the business and the location. These costs include:
Equipment: The most significant cost is the screen printing equipment, which can typically range from $10,000 to $30,000. This includes screen printing machines, washout booth, computers & software for design, product display stands, and registers.
Location: The cost of a location will depend on whether you’re renting a commercial space or operating from home. For a commercial space, you’ll need to consider the cost of the initial deposit, which can range from $1,000 to $5,000.
Starting inventory: An initial stock of printable blank apparel can range from $500 to $5,000, depending on the needs of your business.
Business registration: Registering your business with the appropriate government agencies typically involves a registration fee. This can range from $50 to $500, depending on your state and the legal structure of your business.
Insurance: The cost of business insurance can vary widely depending on the size of your business, the number of employees, and the type of coverage. Initial costs can range from $500 to $1,000.
Marketing: Initial marketing costs can include website development, social media advertising, and print advertising. These costs can range from $500 to $2,000.
How profitable is a screen printing business?
The profitability of a screen printing business can vary widely based on factors like location, market niche, operational efficiency, and customer base. However, let’s create a hypothetical scenario to estimate potential profits.
Assume you set up a small screenprinting business focusing on custom t-shirts for individuals. The average selling price for a custom printed t-shirt can range from $15 to $25. If your business manages to sell an average of 30 shirts per day at an average price of $20, your monthly revenue would be around $18,000 (30 shirts x $20 x 30 days).
The major expenses include the cost of materials (blank t-shirts, ink), labor, rent, utilities, marketing, and equipment maintenance. Let’s assume the cost of materials and labor per shirt is $8, totaling $7,200 monthly (30 shirts x $8 x 30 days). Adding fixed costs like rent ($2,000), utilities ($500), marketing ($500), and equipment maintenance ($300), your total monthly expenses might be around $10,500.
Subtracting these expenses from your revenue gives a potential monthly profit of $7,500 ($18,000 – $10,500). Annually, this equates to $90,000.
This is a simplified projection and actual profits can vary.
What is the NAICS code for a screen printing business?
The NAICS code for a commercial screen printing business is 323113.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Related: What is a NAICS code?