Has there ever been a more popular garment than the humble t-shirt? So many of us still hang on to that concert t-shirt from years ago or the one we brought back from a holiday. Miami Vice made the t-shirt and jacket combo fashionable, and these days, most of us will have a few staple cotton t’s in our wardrobe.
There are so many opportunities to start your business, but starting a t-shirt business is a great option because they are easy and inexpensive to start. If you’re ready to learn more, follow along as we go through the basics of starting a t-shirt business.
First, let’s start with what a T-shirt business actually does and how it makes money. Essentially, a T-shirt business creates custom-designed T-shirts and sells them to customers. Some T-shirt businesses operate exclusively online, while others have brick-and-mortar stores. With a T-shirt business, revenue is generated through the sale of custom T-shirts, but potential revenue streams also include selling stickers, hats, and other merchandise featuring your designs.
The business model can vary depending on the entrepreneur’s preferences and resources. Some opt for a print-on-demand model, where t-shirts are only printed when a customer places an order. This eliminates the need for large upfront investments in inventory and reduces the risk of unsold stock, though profits will be lower. Others prefer to invest in their inventory and control the entire production process, from design to printing and shipping.
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The t-shirt business industry in the United States is thriving and is projected to grow even further in the coming years. With a market size of over $43 billion, it showcases the immense potential for entrepreneurial success.1 This growth can be attributed to several factors, including the rise of e-commerce platforms, the popularity of graphic tees, and the increasing demand for niche segments such as sustainable and personalized apparel. In a fast-paced society that values self-expression, t-shirts continue to be a staple in people’s wardrobes, making the industry highly resilient.
Steps To Start A T-Shirt Business
Step 1: What’s Your Angle?
Before sketching designs or crunching numbers, the first step is to define your t-shirt brand’s unique angle.
Your angle is your ‘why.’ Why are you starting a t-shirt business? Is it because you have unique design ideas that you believe will resonate with a specific audience? Or perhaps you’ve identified a gap in the market for sustainable, ethically-produced t-shirts. Maybe you’re passionate about a particular cause or community and want to create designs that help spread awareness.
Next, think about what makes your business different. In an industry saturated with competitors, uniqueness is key. It could be your innovative designs, high-quality materials, exceptional customer service, commitment to sustainability, or anything that makes your brand stand out.
In an increasingly crowded apparel marketplace, you can’t rely on slapping some clip art on t-shirts and calling it a business. Your angle doesn’t have to be groundbreaking or innovative. It simply needs to be authentic and reflective of who you are as a brand.
Step 2: Write a Business Plan
Starting a t-shirt business can seem fun and exciting, but it is important to remember that starting any business requires careful planning and execution. That makes creating a business plan the next step in starting a t-shirt business. Is this a required step? No, not at all, unless you needed to go to the bank for a loan, which is unlikely given the low startup cost for this type of business.
So then, why should you write one? Basically, when you start a business, getting carried away with your ideas and losing sight of your goals can be easy. A business plan helps ground you and clarify your objectives, ensuring you stay on track as you move forward. It will give you a clear sense of direction, outlining the steps you need to take to launch and grow your t-shirt business. This will help you avoid costly mistakes and stay focused on what matters most: your customers, product, and profitability.
One important element to include in your t-shirt business plan is marketing. In this section of your business plan, you will take your ‘why’ and develop targeted marketing and sales strategies. You will outline your target audience, competition, and what sets your t-shirt business apart from others. You will also develop a marketing strategy to promote your brand, such as social media campaigns, email marketing, and influencer outreach.
Another essential element to consider in your t-shirt business plan is projecting sales and profitability. By setting revenue goals and analyzing pricing and margins, you can work through on paper whether you can generate enough revenue to cover expenses and make a profit.
Related: How to write a business plan
Step 3: Register the Business
When starting your own t-shirt business, following the proper steps to register and make it legal is important. Here is an overview to help you navigate this process:
Choose a business structure: There are four common types of business structures – sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).
- Sole proprietorship: This is the simplest and most common business structure where you are the sole owner and responsible for all aspects of the business.
- General partnership: This structure applies if you have a business partner. Both share the responsibilities and liabilities of the business.
- Corporation: A corporation is a separate legal entity from the owners, providing liability protection but involves more paperwork and formalities.
- Limited Liability Company (LLC): An LLC offers both liability protection and flexibility in terms of management, making it a popular choice for small businesses.
Each structure has different legal and tax implications, but the most common structure for a startup t-shirt business is often the sole proprietorship due to its ease of startup, low cost, and minimal legal concerns.
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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Northwest - Best privacy protection. $39 plus state fees & free registered agent for 1 year!
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: Depending on your location, there will likely be a variety of general business registrations needed before opening. These could include a business license, seller’s permit, and Employer Identification Number (EIN).
Trademarking your brand assets: To protect your business name, logos, and original designs from infringement, consider filing for a trademark with the United States Patent and Trademark Office (USPTO).
Step 4: Figure out Production & Fulfillment
After laying the groundwork and registering the business, the next step in starting a t-shirt business is to determine your production and fulfillment processes. Here are some aspects to consider:
Design: Decide if you will create the designs yourself or hire a graphic designer. If you opt to hire a graphic designer and don’t know who to turn to, online marketplaces like Upwork or Fiverr can be great resources for finding talented designers.
Production method: Once you have your designs ready, you need to decide on the production method for your shirts. There are a few different options you can consider:
- Traditional screen printing: This is the most common way to print t-shirts. Screen printing involves using a stencil, or screen, to apply ink to the shirt. Screen printing is great for large quantities because the more you order, the cheaper the cost per shirt becomes.
- Direct-to-Garment printing: DTG printing involves using a specialized printer to print the design directly onto the shirt. DTG printing is great for smaller runs or one-off designs because minimum order requirements are often low.
- Print-on-Demand service: A print-on-demand service like Printify allows you to upload your designs to a website, and they will print and ship the shirts for you. This option is great if you don’t want to invest in equipment or hold inventory, but the profit margin may be smaller.
Fulfillment and shipping: The final task is figuring out how your products will be delivered to your customers. If you decide to use a print-on-demand service, they may handle the shipping for you. Otherwise, you will need to establish your own fulfillment process. This could involve working with a third-party fulfillment service or setting up inventory storage and shipping yourself.
Step 5: Set Up Shop
Once you have your designs, production, and fulfillment plans in place, the next crucial step in launching your t-shirt business is setting up your store. This is where customers will see, select, and purchase your products. There are several options to consider, a few of which include:
Brick-and-mortar: A brick-and-mortar store is a physical location where customers can browse and shop in person. The advantage of this model is that you get to create a unique in-store experience for customers, and it is an excellent option for those who want to establish a permanent presence in the community. The main challenge of a brick-and-mortar shop is the high overhead cost and the need for additional staff to manage it.
Marketplace: An online marketplace like Etsy or Amazon Merch is a digital store that allows entrepreneurs to sell products in exchange for a percentage of sales. Marketplaces have an established customer base, which means that your products can quickly reach a broader audience. However, it also means more competition, and you won’t necessarily be able to control the customer experience and branding.
Temporary retail spaces: Another option is to set up shop in temporary retail spaces like pop-up shops or market stalls. These can be a cost-effective way to reach customers in different locations and test the market before committing to a long-term lease.
Instagram and Facebook shops: Utilizing social media platforms like Instagram and Facebook, you can create online storefronts to showcase and sell your t-shirts. These platforms offer easy setup and the ability to reach a wide audience of potential customers.
Online store: An online store is the most popular option for t-shirt businesses because it is cost-effective and pretty easy to set up, even if you aren’t a website designer. You can set up your online store through Shopify or WooCommerce, both of which provide an intuitive user interface. Additionally, they have the option of directly tying into many Print on Demand (POD) services to provide a seamless process where the POD service receives the order after the customer places it on their website, and then the shirt automagically goes through printing and shipping.
Step 6: Prepare to Open!
As you wrap up the steps for starting a t-shirt business, there are a few additional tasks to consider that may vary depending on your specific needs. Some of the more common ones include:
Setting up bookkeeping: Set up accounting to handle daily transactions, taxes, and financial statements. This can include hiring a bookkeeper or using accounting software.
Opening a business bank account: Open a separate business bank account to keep personal and business finances organized.
Creating a marketing strategy: Once your store is set up, you’ll want to let potential customers know about it. Depending on your business model, This can include utilizing social media, email marketing, search engine optimization (SEO), and participating in local events.
Common Questions When Starting A T-Shirt Business
How much does it cost to start a t-shirt business?
Starting a t-shirt business involves several costs, which can vary depending on the scale and model of the business. Assuming a home-based t-shirt business that is using a Print on Demand service, the cost to get started might start at around $1,000. Major startup costs include:
Graphic design: If you don’t have graphic design skills, you will need to hire someone to create the graphics and images for the website. Hiring a freelance designer can cost anywhere from $25 to $150 per hour, depending on their experience and skill level.
Test inventory: Before taking orders, you should test the ordering process and order test inventory to ensure the quality of your products. This cost can range from $100 to $500, depending on the number of designs and samples you want to test.
Business registration: The cost to register your business can range from $50 to $100, depending on your state.
Marketing: Initial marketing costs can include website setup, social media advertising, and promotional materials. These costs can range from $200 to $1,000.
How profitable is a t-shirt business?
The profitability of a home-based t-shirt business can vary greatly depending on factors such as the price of the t-shirts, the cost of production, and the volume of sales.
Let’s assume that you sell your t-shirts for $25 each. If you sell 100 t-shirts a month, your total revenue would be $2,500 ($25 x 100).
Now, let’s consider the costs. Suppose the cost of producing each t-shirt (including materials, printing, and labor) is $10. Your total production cost for 100 t-shirts would be $1,000 ($10 x 100).
If you’re selling online, you might also have costs for website hosting and transaction fees. Let’s estimate these costs at $50 per month for hosting and merchant fees for processing payments, typically around 2.9% + $0.30 per transaction. For 100 transactions, assuming an average fee of $1.03 per t-shirt ($0.73 + $0.30), this would total approximately $103.
So, your total costs would be $1,153 ($1,000 + $50 + $103). Subtracting this from your total revenue of $2,500 gives a monthly profit of $1,347 ($2,500 – $1,153).
This is, of course, a simplified example, and actual profits will vary.
What is the NAICS code for a t-shirt business?
The NAICS code for a t-shirt business is 315990, which is classified under Apparel Accessories and Other Apparel Manufacturing, or 323113, which is Commercial Screen Printing.
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?