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How to Start a T-Shirt Business

Overview

How to Start a T-Shirt Business

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 own company – starting a t-shirt business can be a great one. 

It can provide income and independence and give you a creative outlet. Selling t-shirts with your artistic touch is a comfortable starter business. Initial costs are relatively low, especially for an online eCommerce setup. You can find your niche and then scale up with a growing customer base. 

So this is the perfect setup for a side hustle, which can, over time, grow into a full-time career. 

Business Overview

There are several ways you can set up your company. But at the heart of it, you will be in the business of beautifying or perhaps being quirky, then selling uniquely designed short-sleeved cotton tops – likely to a specific niche market. 

If you’re acing social media and are starting your business as a side hustle, Facebook may be the right place to begin. On the other hand, to bring your designs to a bigger audience, platforms such as EtsyRakuten, or Amazon, for example, will give you a far greater reach. 

Another exciting option is to sell your apparel via t-shirt and art marketplaces. For example, platforms such as Design By Humans or Threadless offer the print-on-demand process, from uploading your design to creating mockups to selling your finished product to customers. 

And finally, if you are quite the t-shirt connoisseur and you’re angling for a full-time career, you may prefer to set up your own eCommerce store. That way, you will also retain control over pricing, marketing, supply and delivery options, and of course, your designs. 

Industry Summary

A t-shirt business forms part of the larger apparel manufacturing industry but perhaps most closely fits with the (online) original design t-shirt industry. According to Statista, revenue from its t-shirt segment alone will be almost $4.7 billion in 2022.  

The broader apparel manufacturing industry is quite fragmented. It comprises about 4,800 companies and employs over 87,000 people in the US. That said, imports from countries such as China, Mexico, Bangladesh, Indonesia, and Vietnam make up 88% of the US t-shirt consumption. 

Industry Trends

The fashion industry has experienced a shift towards customized, personalized clothing. This is especially true for the customer segment with an increased disposable income. The expected annual 5.83% growth for the print t-shirt market is a reflection of that trend. According to Business Insider, it’s forecast to reach $10 billion globally by 2025.

Target Market

There are many reasons customers may opt for a custom-printed, unique t-shirt. They may want to support a cause, raise their voice for social issues, or they’re just into t-shirts with funny slogans!  Others may be looking for a beautiful design – your design – that represents their personality and is unique. In addition, businesses often use custom designs or prints for marketing purposes and to provide uniforms for their employees

Competition is high in this industry. The crucial trick to making it a success is to nail your niche. Work out precisely what customer segment you want to attract and what makes your design and service stand out for that crowd. 

Here are a few t-shirt stats and fun facts that we hope might assist your business planning.  

Checklist for Starting a T-shirt Business

Starting your own t-shirt business can be a fun and rewarding endeavor, but it’s important to make sure you have everything in order before you launch. With the following checklist and resources, you will be prepared to start your business.

Step 1: Write a Business Plan

The first step to starting any business is writing a business plan. This document will outline your business goals, strategies, and how you plan on executing them. A t-shirt business is no different – you need to have a clear understanding of what you want to achieve and how you’re going to get there.

Related: How to write a business plan

Step 2: Name the Business

Coming up with a name for your t-shirt business can be tough. You want something memorable but still represents what your business is about. Here are a few tips to help you get started:

1. Keep it simple. The name should be easy to remember and spell.

2. Use keywords that describe your brand. Think about what makes your t-shirts unique and use those keywords in your name.

3. Be creative! Come up with a name that is unique and stands out from the competition.

4. Don’t be afraid to ask for feedback. Ask your friends and family for their opinions and see what they think of your ideas.

Related: Tips on naming a business

Step 3: Form a Business Entity

A business entity (also referred to as a business structure) refers to how a business is legally organized to operate. There are four primary business structures to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

When deciding on which business entity is best for a t-shirt business, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
 
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment, though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start, which is appealing. The downside is that the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: Guide to forming your LLC
 

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!

IncAuthority - $0 plus state fees & free registered agent the first year!

ZenBusiness - $49 plus state fees & free registered agent for 1 year!

Step 4: Apply for Business Licenses and Permits

Even if the business is home-based, a t-shirt business, like any business, will likely need several business licenses and registrations to operate.  

A couple of common licenses include a local business license and a sales tax license.

Related: Common business licenses, permits, and registrations by state

Step 5: Open a Business Bank Account

Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
 
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

Step 6: Set up Fulfillment

When it comes to starting a t-shirt business, fulfillment is key. After all, no one wants to wait weeks for their purchase to arrive, so it’s important to find a supplier that you can trust.

There are a lot of different options out there, from printing your shirts in-house to finding a fulfillment company, so it’s important to do your research and find a company that has a good reputation and that offers competitive pricing.

Once you’ve found a supplier, the next step is to set up your inventory system. This will involve creating product listings and keeping track of your inventory levels. You’ll also need to create shipping labels and packaging materials. The key to success for a t-shirt company is to stay organized and efficient.

Step 7: Get your Marketing Plan in Place

As any entrepreneur knows, starting a business is only half the battle. Once you’ve designed your shirts and figured out how to produce them, you need to find customers who are willing to buy them. And in the world of fashion, that can be easier said than done.

If you’re selling t-shirts, you’re up against some stiff competition. But there are a few things you can do to make your t-shirt business stand out from the rest.

Here are a few tips to get you started:
1. Start by creating a strong brand identity. This means having a unique logo and design aesthetic that will make your t-shirts stand out from the rest. Take some time to research other brands in the market and see what makes them successful.

Then, use that knowledge to create your own brand guidelines.

2. Make sure your t-shirts are high quality. No one wants to buy a t-shirt that falls apart after one wash. Use durable materials and invest in good manufacturing processes to ensure that your t-shirts are built to last.

3. Use social media wisely. Social media is a powerful advertising tool, but it can also be very overwhelming. Choose one or two platforms (such as Instagram or Facebook) and focus on creating strong, engaging content for those platforms. Don’t try to do too much at once, or you’ll end up spreading yourself thin.

Be patient! Marketing takes time, so don’t expect overnight success. Keep at it consistently, and eventually, you’ll start to see results!

Related: Low-cost ideas to market a new business

Every business is going to need a logo. Make a professional logo in no time with the free Canvaa logo maker!

Step 8: Get Business Insurance

When starting a t-shirt business, it may be important to make sure you have the right insurance in place to protect your business. Depending on the size and scope of your business, you may need different types of insurance.

For example, if you have employees, you will need workers’ compensation insurance to cover their medical expenses if they are injured on the job.

If you have a brick-and-mortar shop, you will need property insurance to protect your inventory and equipment.

And if you plan to operate an online t-shirt business, you will want to check your homeowner’s or renter’s insurance, as most won’t cover a business-related loss.

Related: Types of insurance your business may need

Step 9: Set up an Accounting System

Setting up an accounting system for your t-shirt business is critical to your business’s long-term success.
Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up the accounting for your business

The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:

- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.

Find bookkeepers in your local area or use a service like 800Accountant.

How much does it cost to start a t-shirt business?

In the Business Description above, we’ve mentioned several ways to start your own t-shirt business. The business model you decide on will largely determine your start-up costs. 

Let’s assume you start your t-shirt business from home, with a small number of t-shirts and a decent heat press to do your printing at home and to order. Consider these items and estimates:

– A range of shirt materials in various sizes and/or colors, and ink – $100
– A mid-range, good-quality heat press – $750
– Licencing, insurance (depends on your area) – $200
– Marketing, online store, branding, ads – $100 – $4,000 (depending on your business setup, use of existing platforms, and level of competency in setting everything up)
– Packaging, delivery service – $300

So, in summary, you can get started for as little as $1,500, with no significant overheads. Of course, you might leave the printing to someone else and choose a print-on-demand option for your business. While you may pay more for the actual printing, you will not have to invest in inventory and will not have the hassle of maintaining print equipment. 

Alternatively, you may invest in direct screen printing equipment, a direct-to-garment (DTG) printer, or embroidery machines if you have a solid customer base. However, that would increase your investment by several thousand dollars.  

How much money can you make with a t-shirt business?

Your income will depend greatly on how well you have pinpointed your target audience and whether you’re selling your garments at the right price point with the right profit margin. Developing a business plan and budget – and sticking to it – will be crucial to the success of your business – and your income.

On the other hand, you can start a t-shirt business with a minimal budget, and getting a feel for the market is a relatively financially safe process. 

Are there grants to start a t-shirt business?

It’s extremely rare to find a grant to start a t-shirt business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.

Legitimate federal grants can be found at Grants.gov, and you can check on your state’s economic development office to see if they have any grants available.

What skills are needed to run a t-shirt business?

Creativity and an entrepreneurial spirit. This is your chance to get creative with your designs and imagery. Or perhaps you are a fantastic wordsmith and are really good at coming up with punts and slogans.  Shopify offers a T-shirt mockup generator, for example, so you get a perfect idea of what your creation will look like and can tweak it to perfection. 

What will be crucial to the success of your business is finding your niche and your target market and setting up your processes and your online presence to attract and retain that customer segment.  

Design skills. There are a few design skills you’ll need to start a t-shirt business. First, you’ll need to be able to come up with concepts and t-shirt designs that are both unique and marketable. This means keeping up with the latest trends while still offering something that sets your shirts apart from the competition. You’ll also need to be adept at using design software such as Adobe Photoshop or be able to hire a graphic designer to create high-quality designs that will look great on your shirts.

Excellent communication and marketing skills.
How will your target market find you – how will you grow your customer base? We recommend investing in good imagery and developing a consistent, authentic comms and marketing strategy and branding that speaks to your target market. Make the most of social platforms. Consider getting influencers to wear your gear and promote it to their followers.  

In addition, an outstanding customer experience will ensure repeat business and help expand your brand through word of mouth. 

Business management skills. Business management skills are always valuable, even if you begin creating and selling t-shirts as a side gig. Accounting and pricing skills will be handy, as is competency in using e-commerce platforms.

Are you going to sell your t-shirts wholesale or use a print-on-demand service? What will the cost structures look like for various options? You will need to be able to price your products, understand supply and demand, work out profit margins and ensure your accounting is in line with tax regulations. 

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?

Final Thoughts

If you’ve got a creative vein, an eye for design, and an entrepreneurial spirit, starting a t-shirt business is a great choice It’s a path to becoming your own boss without the burden of a significant investment.

This can be a fantastic, fun way to find your business feet with something you love doing. 

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