How to Start a T-Shirt Business

Benefits of starting a T-shirt business

Running your own T-shirt business may come with several benefits:

Flexibility: T-shirt making is flexible, particularly if you sell online. Since you’re not required to follow a traditional 9am to 5pm schedule, you can create one that fits around family, work and personal obligations.
Multidimensional: As the owner of a T-shirt business, you typically have multiple responsibilities: designing shirts, negotiating with suppliers, marketing your designs and selling to customers.
Scalable: A T-shirt business can start as a small, part-time endeavor and scale up as you boost profits and grow your customer base.
Geographic freedom: As an online merchant, you can run your operation from anywhere.
Creativity: Designing T-shirts can help you profit from artistic expression.

How much money you need to start a T-shirt business

A T-shirt business generally has two main costs: startup and ongoing. Consider how much money you need upfront and to cover regular expenses until you make a profit.

To estimate your expenses, consider these common T-shirt business startup costs and ongoing costs:

Printing press

You can print T-shirts yourself using a screen printer or heat transfer printer, or you can outsource printing to a manufacturer. The costs vary depending on your expected production volume.

Computer

Regardless of how you print shirts, you likely need a computer to create designs, run an online store and market your products. Costs in this area can vary based on your existing setup. At a minimum, you may need design software and a laptop or desktop computer.

If you’re on a tight budget, you may be able to cut costs. The Procreate art app for iPad offers an affordable one-time payment, and the image editor GIMP is free and compatible with Macs and PCs.

Materials

T-shirt companies usually order blank shirts in bulk to save money. Depending on the quality and volume, you could spend between $1 and $10 per shirt. The more you order at once, the less you typically spend.

Licenses and permits

To run a business, you may need to obtain licenses and permits from your state or county. Specific requirements depend on your location and business operations. For example, if you sell shirts exclusively online, you might not need a sales tax permit.

Storefront or workspace

If you plan to sell T-shirts in person, you need a physical location. The costs depend on your business model. Selling at festivals and community events can involve a table, sign and registration fee. A brick-and-mortar store typically requires more investment.

Commercial rent can vary depending on where you live and the size of the workspace. Most landlords require a security payment and first and last months’ rent upfront with monthly rent payments. If you plan to change the space, you may also have to factor in those costs.

Online T-shirt businesses need a workspace, but the requirements are flexible. For example, you could set up a workspace in a rented workshop, your garage or a spare bedroom.

Utilities

Utilities such as electricity and water are ongoing costs for your T-shirt business. Those expenses can vary, but you can include estimates in your monthly budget. Even if you run the business from home, a T-shirt printer can increase your electricity consumption.

Labor

Large-scale T-shirt businesses usually need employees to help with design, printing, marketing and customer service. You might also outsource accounting and payroll.

Incorporate employee salaries and training costs into your budget. For reference, Indeed data shows digital marketers make an average of $22.07 per hour, while graphic designers average $22.91 per hour.

Marketing

Marketing is critical for every T-shirt company—it helps connect your business with potential customers. You might handle marketing, but if you outsource it, you may pay for the following:

Graphic design
Content creation
Online ads
Printed marketing materials
Branded packaging

Costs could range from free to several hundred dollars per month.

How to register your T-shirt business

Business registration laws vary by state and county. Check local laws to ensure you comply, and use these steps to get started:

1. Select a business structure

Before registering a business, you need to choose a structure. Every business structure has advantages and disadvantages, so it’s important to understand the options before choosing one. Common business structures include sole proprietorship, partnership, limited liability company (LLC) and corporation.

2. Confirm your business address

You likely need to include a business address on your registration documents. If you have a storefront or office space, use that address. If you’re operating out of your home or working remotely, you may be able to use your home or permanent address.

3. Choose a name

Select a name for your business, making sure no other company has the same name in your state. Most state governments make it easy to search their website for registered businesses. To build brand recognition, choose a name that’s memorable and descriptive.

4. Register with the IRS

Register your business with the IRS and receive your employer identification number (EIN). Think of this number as a Social Security number for your business. You use it to file your taxes.

5. Register with local entities

Check with your state and county government for local business registration requirements.

6. Obtain licenses and permits

Every industry’s licensing and permitting obligations differ. For T-shirt companies, the necessary licenses and permits depend on whether you run a brick-and-mortar or an online business. Your local government can help you create a list of requirements.

Printing options

The best printing methods for T-shirt businesses depend on your budget, space and anticipated sales volume.

Screen printing

This method uses a thin screen—traditionally made of silk—that features your design in negative form. To print, stretch the screen across the shirt and push ink through the screen using a squeegee. Then, the T-shirt needs time to dry. Screen printing produces high-quality, long-lasting products, but it can be complicated to make designs with multiple colors.

Heat transfer vinyl

Heat transfer vinyl printers use a large iron to transfer your design from a sheet of vinyl onto the shirt. It’s a quick process that’s typically cleaner and faster than screen printing. You can prevent cracking and peeling by using high-quality materials.

Outsourcing

With outsourcing , you make the design and the printer handles screen printing, heat transfer vinyl or direct-to-garment printing. Consider ordering samples and testing prints to verify quality.

You don’t have to buy and maintain printing equipment and supplies. It may be more cost-effective for high-volume orders. If you have a low volume, you might charge higher prices to make a profit.

How to set rates

Carefully consider how much to charge for your shirts. Your prices should allow you to cover basic expenses, grow the company and make a profit.

These steps can help you set reasonable rates:

1. Determine costs

Calculate how much it costs to make each T-shirt by adding expenses such as:

Price of the blank T-shirt
Equipment and materials
Printing

2. Consider overhead

It’s important to factor in overhead costs when setting prices. Think about:

Rent
Utilities
Marketing
Labor
Insurance

Determine how much you spend in a month, and divide that figure by the number of shirts you expect to sell in the same period. Add the result to your average production costs.

3. Think about profit margin

Now, you should have a figure that covers expenses without producing a profit. Consider how much profit you hope to make on each T-shirt. A standard percentage varies from vendor to vendor, but many T-shirt businesses aim for a profit margin of about 50%.

4. Establish a price

Add your baseline costs to your desired profit margin to get your prices. If your production and overhead costs come to $10, and you want a 50% profit margin, your final price should be $15, providing $5 in profit.

How to hire t-shirt business employees

If you plan to hire employees, you may follow these steps to help find suitable candidates:

1. Write a job description

Write a detailed job description for each open position. Include information such as:

Job title
Key duties and responsibilities
Required and preferred skills and experience
Expected work hours
Company description
How to apply

You might include salary and benefits information or discuss compensation during the interview.

2. Post the job description

Post your job description on your company’s website and online job boards. Depending on the position, you might also post the job description in a local newspaper, on college job boards or on local bulletin boards. You can also give it to industry professionals to share with their contacts.

3. Conduct interviews

Review applications and select candidates to interview. Ask about the candidate’s job experience, education and career goals. Consider their transferable skills and whether you can provide training for essential tasks. Additionally, make sure they’re available for your desired hours.

4. Make a job offer

Make your top candidate a job offer that includes compensation and benefits. You can make an unofficial verbal offer followed by an official written one.

5. Negotiate and sign

Your candidate may want to negotiate some terms of the contract. Work together to find a compromise, and ask the candidate to sign an employment contract to begin your working relationship.

Best ways to market a T-shirt business

You can market a T-shirt business using traditional and digital methods. The specific tactics you employ may depend on your target market.

Consider the following marketing types.

Traditional

If you open a brick-and-mortar business or make T-shirts with location-specific designs, traditional marketing can help boost sales. Your marketing tactics might include:

Posters and brochures
Mailers
Print ads at local events
Signage
Newspaper and radio ads
Event sponsorships

Digital

Digital marketing is vital for most T-shirt businesses, especially if you run an e-commerce site. Use these tools to get in front of your target demographic:

Social media marketing
Social media advertising
Pay-per-click advertising
Search engine optimization
Content marketing
Email marketing

Frequently asked questions about starting a T-shirt business

Is selling T-shirts online profitable?

Selling T-shirts online can be a profitable venture. T-shirts are sought-after items that usually come with a high profit margin, and an online business typically has a lower overhead than a brick-and-mortar store. Your exact profitability may depend on your pricing, marketing campaigns, business model, operational costs, budgeting ability and brand recognition.

Can you start a T-shirt business from home?

You can start a T-shirt business from home if you have the space to set up a printer, store T-shirts and package orders for shipment. As the business expands, you can grow into a larger space.

You might also start a home T-shirt business by working with a print-on-demand company. When a customer orders your designs, a separate manufacturer prints and ships them. This model has higher costs and lower profit margins, but you don’t need to buy equipment and supplies.

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