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How to Start a T-shirt Business

There can be few things more thrilling than seeing someone
wearing a piece of art that you have created. One way to achieve
this is to go into the T-shirt business, create amazing designs and
then sell them to people online.

Historically, only established clothing brands could create and sell
T-shirts, but that’s all changed. With the rise of ecommerce and
print-on-demand T-shirt services, you can create and start selling
T-shirts online in just a couple of days.

Don’t be fooled though — running a successful T-shirt printing
business can be tough. There are low barriers to entry, so finding
the right niche, creating eye-catching designs, branding your
business properly, ensuring quality and having great marketing
are essential.

There can be few things more thrilling than seeing someone wearing a piece of art that you have created. One way to achieve this is to go into the T-shirt business, create amazing designs and then sell them to people online.

Historically, only established clothing brands could create and sell T-shirts, but that’s all changed. With the rise of ecommerce and print-on-demand T-shirt services, you can create and start selling T-shirts online in just a couple of days.

Don’t be fooled though — running a successful T-shirt printing business can be tough. There are low barriers to entry, so finding the right niche, creating eye-catching designs, branding your business properly, ensuring quality and having great marketing are essential.

In this guide we’ll explore everything you need to do to set up your T-shirt business and maximize your chances for success. We’ll cover:

  • Understanding the world of the T-shirt business
  • Deciding if you’re ready to start a T-shirt business
  • Planning out your T-shirt business
  • Determining the best legal structure for your new organization
  • Following various rules and regulations
  • Paying taxes and for your T-shirt business
  • Hiring employees, managing finances and administering your T-shirt business
  • Locating other resources for your T-shirt business
  • And much more

Understanding the World of the T-Shirt Business

Key T-Shirt Business and Background Data and Statistics

It’s important to understand the opportunities in the online T-shirt printing and ecommerce space. Here are the key facts you need to know:

$3B

Total revenue for online T-shirt printing and sales a year

$10B

Market is expected to grow 2025

  • The industry has grown by nearly 9% a year between 2011 and 2016
  • The top four online T-shirt businesses generated just over 35% of all revenue between them, with the remainder being split among the other, smaller businesses
There are over 400 online T-shirt design and printing ecommerce businesses, and the number of businesses is growing by around 11 percent a year
Together, these companies employ around 2,500 people


Cafepress, CustomInk, Threadless and Teespring are some of the large businesses in the space
This all points to the T-shirt industry being ripe with new opportunities for focused entrepreneurs, so now might be the perfect time to dive into starting your T-shirt business. Incfile is here to help you form your T-shirt business and understand the ins and outs of owning a T-shirt company.

What Your T-Shirt Customers Are Looking for

When it comes to creating a custom T-shirt business, it’s important to stand out — there’s a lot of competition in the space. If you want to be successful, you need to focus on several key areas:

Price
The Right Niche

It’s impossible to be a generalist in the world of T-shirt commerce — you will need to pick a good niche and stick to it. Carry out online research to see what niches are underserved so you can make a splash in your chosen area. Niches might include areas like a specific band, TV show, art style, current events or something else.

Quality
Original Designs

When it comes to custom T-shirts, originality is everything. You will either need to create original designs yourself or find a designer you can partner with to create designs based on your ideas. You can also share your designs with your proposed customers to get their feedback.

Speed
Strong Branding

You want your T-shirt brand to stand out so you can start to build customer loyalty. Spend some time creating a powerful, recognizable brand that you can use on your website, in your marketing and elsewhere.

Reviews
High Quality Materials

You will want T-shirts that combine comfort, durability and style. It’s worth spending a little more to find higher quality cloth and cuts as these will last longer and stand out in the minds of your customers.

Speed
Awesome Marketing

There’s a great deal of competition in the T-shirt design space. You will need innovative, audacious marketing to make a splash and get noticed. Combine your niche with your brand to create powerful messages with striking imagery so your customers will remember you.

The Benefits and Challenges of Being a Successful T-Shirt Entrepreneur

What Are the Main Challenges for a T-Shirt Entrepreneur?

Price
Low barrier to entry

Starting a custom T-shirt business is easy, but being successful is not. You need to narrowly define your niche, build a distinctive brand, create amazing designs and use fantastic marketing. If you can get all of these areas to align, you will have a successful T-shirt business.

Quality
Low profit margins

The profit margins on custom T-shirts are quite thin. You will need a rock solid understanding of your revenue and finances to ensure you’re able to make a profit on every item sold.

Speed
High initial cost if you print yourself

If you choose to print yourself, you will have to outlay the cost of your printing machine and T-shirt stock, in addition to dealing with packing and postage. We recommend using a print-on-demand, dropshipping-style fulfillment service to avoid this.

What Are the Main Benefits for a T-Shirt Entrepreneur?

Price
Low overheads

If you use a print-on-demand service paired with an ecommerce store, your business can pretty much run itself. You will still need to be involved in marketing and customer service, but the ordering and fulfillment will be taken care of automatically.

Quality
Great introduction to entrepreneurship

Most T-shirt entrepreneurs don’t stop there. This type of business is a relatively low-risk way to learn about running your own business, especially in the ecommerce space.

Plan Your T-Shirt Business

Before you start your business, there are a few key areas you need to focus on. You will need to establish whether there’s a demand for your T-shirt business services, look at potential benefits and pitfalls, understand how your business finances might look and ensure everything is in order.

Here are the steps you’ll need to take to setup your custom T-shirt business.

  • 1 Come up with the niche and idea:Do your research and understand the niche you want to go into. Validate this niche with your potential customers to check that there’s interest.
  • 2 Create T-shirt designs: You will need to create designs yourself, partner with a designer or source designs from elsewhere for all your T-shirts. You should come up with several original designs for when you launch your T-shirt ecommerce store.
  • 3 Setup a T-shirt ecommerce store: You will need to create an online store to sell your T-shirt products through. Shopify is a great place to start; it automatically has integrations with several print-on-demand services. Alternatively, you could try an online web builder like Wix or Squarespace, or Wordpress paired with WooCommerce.
  • 4 Find a print-on-demand provider: We recommend using a provider who can handle the printing and distribution of T-shirts on your behalf. There won’t be any upfront expenditure for you; you don’t need to hold stock and the provider will take care of everything. Shirts.io, Merchify, Zazzle, Cafepress, Print Aura, Printify and Printful are all good services.
  • 5 Link everything together: Build your website, upload your designs, link it to your print-on-demand provider and launch your business.
  • 6 Get your branding and marketing right: Once you have launched your store, you will need to market and brand it properly. Use whatever type of marketing works, take advantage of social media and engage with influencers.
  • 7 Run your business: You will need to continue marketing, handling customer service and coming up with new designs. Keep a close eye on your analytics so you can see what designs are selling.
What Are the Main Challenges for an Amazon Seller Entrepreneur?
What Are the Main Challenges for an Amazon Seller Entrepreneur?

Do Market Research and Validate Your T-Shirt Products and Services

Before you launch your T-shirt business, you need to understand if there’s a demand for what you’re selling. That means carrying out market research and “validating” your products and services. Here’s how to go about it:

  • See if there are any market research reports for T-shirt businesses: Search locally, nationally or internationally to help you find your T-shirt niche.
  • Look at who your competitors are in the space: There are likely to be plenty of competitors. Look through them and see the types of clothing and designs that they are offering so you can find a gap in the market.
  • Talk to clients: Speak with potential customers to understand what they want from your T-shirt products.
  • Identify your business’s unique selling points (USPs): These are the areas that will set you apart from competitors and encourage customers to come to you. You might have better pricing, more exciting designs, an underserved niche, a higher-quality service, faster delivery or some other special feature.
  • Validate your products and services: Test whether people will commit to spending real money on what you’re offering.
  • Get involved with business communities and discussion groups: Ask questions about T-shirt businesses. You can find links to some excellent discussion groups later in the article.

Understand Your T-Shirt Business Model and Financial Projections

All businesses need a business model, which is how you will generate sales, provide products and make money. Think about your business model now, because it’s better to have that in place so you can start acquiring customers and generating revenue from day one.

You will also need to look at financial projections for your T-shirt business. What are your expected sales and revenues? What is your profitability? How much money will you keep in the business to grow it? How much will you pay yourself and others? If you can, try to plan your revenue for the next month, three months, year and two years.

Write a Business Plan for Your T-Shirt Business

Finally, you should put your business plan together. Business plans do vary slightly, but they should cover the following areas:

  • 1 An executive summary with the most important points from your business plan
  • 2 Your goals and what you hope to achieve with your T-shirt business
  • 3 A description of your business, background information and context
  • 4 A market analysis and likely demand
  • 5 An overview of how your business is structured
  • 6 Your business model
  • 7 How you will market and sell your offerings
  • 8 Financial projections, revenue and profitability
  • 9 Appendices
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Choose the Right Business Structure and Register Your T-Shirt Business

Now that you have all the background information for your T-shirt business, it’s time to make it into a reality. Starts by choosing the right structure or “legal entity” for your business. In the U.S., there are four main business structures. They are:

Choose the Right Business Structure and Register Your Amazon Business

Sole Proprietorship

This is the "default" business
structure and is what your
business will be if you decide
not to create a more formal
structure. We don't
recommend this type of
business as it doesn't give
you the legal protections you need.

Limited Liability

Limited Liability
Company or LLC

The most common type of business entity. An LLC is fast, simple and inexpensive to setup and maintain. It protects your personal finances and assets and is a great way to start your real estate

Series LLC

Series LLC

This is a special type of LLC entity that's only available in certain states. It allows you to create "mini" LLCs, each with their own limited liability and separate assets, under the umbrella of a master LLC.

S Corporation

S Corporation

This is a more complex type of
business and isn't generally
recommended for smaller
organization.

C Corporation

C Corporation

These are the largest and most
complex types of businesses
and are far more than the
average entrepreneur or
business owner will need.

For more information on the advantages and disadvantages of different types of businesses, please see our in-depth guide on business entities. If you still have questions, we’ve answered them to help you choose the right business structure.

In most cases our recommendation would be to create an LLC. We have a complete guide to everything you need to do, and we can set one up for your T-shirt business. LLC formation does vary from state to state, but we’ve got you covered, wherever you are.

Setup Your T-Shirt Business

Once you've legally created your T-shirt business, you’ll need to get some other things in place.

Location of your business

If you’re using a print-on-demand service, you should be able to run your business from your home. If you’re printing yourself, you will likely need a warehouse or something similar.

Equipment

With the print-on-demand route, your equipment needs are low. You will just need a laptop, computer, smartphone or tablet.

Marketing

Branding and marketing are vital to help you build a distinctive identity. This is one of the areas that you should invest plenty of time and resources into.

Processes

Make sure you understand all your profit margins and get strong analytics in place so you can understand exactly what is and isn’t selling.

Employees

It’s unlikely that you will need to hire employees in the early days of your business. Instead, you might work with freelance designers, marketers and similar.

Permits and licenses

Running a T-shirt business comes with certain rules, regulations and legalities you need to be aware of. Incfile offers a Business License Research Package for you, or you can take the time to do the research yourself.

Finances and taxes

What kind of bank account will you get? Do you need a business credit card? How will you pay your business taxes? These are important questions to consider so your T-shirt business stays in the green. Here at Incfile, we can even help you file your taxes.

Business maintenance

Most states require businesses to file an Annual Report once a year. You will also be expected to pay estimated taxes on what you plan to earn in the current business year. Your federal, state, regional and city business licenses and permits may need to be renewed on a regular basis, typically once a year.

Our Start a Business Checklist will get your T-shirt business going in the best possible way.

Conclusion

Starting a T-shirt business is a great way to get exposure to the fast-moving worlds of ecommerce and creative products. Although it’s difficult to succeed as a T-shirt entrepreneur, with the right niche, awesome designs and great marketing, you can certainly make an impression. Just remember to stay on top of your profit margins, try new things and learn how your T-shirts can help your customers express themselves.