How To Start & Fund A T-Shirt Business

The absolute first step of starting any business is creating a business plan. Even if your idea seems simple and straightforward, a business plan will help keep you on track and progressing toward your goals.

It doesn’t have to be complicated, we even have an article that will walk you through the process of creating a one-page business plan, but there are several key parts you need to make sure you include in your plan.

• Business Overview: What product will you offer that will fill a need in the market?
• Your Objectives: What’s most important to you? What are your short-term and long-term goals? Have no more than two or three clear goals.
• Financial Summary: What are your startup costs? Ongoing costs? Projected revenue?

You need to make sure you have a budget to move forward with starting your t-shirt business, so be sure to include that in your plan!

If you don’t have enough savings or the ability to ask a friend or family member to loan you the money, there are plenty of options to fund your t-shirt business.

Here are just a few you can explore during your planning and research process:

• Small Business Loans: Small business loans are lump sums of money that you repay over time.
• Lines Of Credit: A line of credit is a flexible financing option that allows you to access capital on demand.
• Business Credit Cards: Business credit cards work exactly like personal credit cards; you are given a set credit limit, and you can spend up to that limit.
• Grants: The closest thing to “free money” in the real world are business grants, but they require an immense amount of time and energy to apply for.
• ROBS: Rollovers as Business Startups or ROBS allow you, for a fee, to use money from your retirement account to pay for startup costs without incurring any tax penalties.
• Crowdfunding: Try different types of crowdfunding to raise your startup costs. You can use sites like GoFundMe or Kickstarter to raise funds via public donations to fund your t-shirt business.

After your research, you hopefully have a good idea of what your niche will be. In fact, you might have started with your niche/million-dollar idea, so you might be able to skip this step!

It’s important to figure out where you will fit in your local (or larger if you plan to sell online) market and how you stack up against your competition. Whatever you do, make it you, and make it great!

If you do plan to sell online, Square Online is one of our favorite platforms due to its ease of use and all the features you get for free or at a low price.

You have your niche, a plan, and an idea of your funding. Now it’s time for the fun part, designing your shirts!

Who are you making your shirts for? Who is your target audience? Will your shirts be more fashion-forward, or will they be considered lounge/athletic wear? Determine these things before you launch into designing.

If you have experience with graphic design, you can make your own designs in the programs you are comfortable with.

If you don’t have any experience with design, no worries! You can always bring your ideas (another reason why you need to have a business plan) to a designer and hire them to make them for you.

There are a couple of different software programs you will need to research and invest in before starting your t-shirt business. For one, you’ll need to find accounting software to help you balance your books and keep track of cash flow. If you’re new to accounting, don’t worry, there are plenty of easy accounting software apps for small businesses.

Unless you plan on running your business as cash-only, which we don’t recommend, as it limits your customer base, you’ll also need payment processing software to accept credit card payments. The best payment processing companies for small businesses offer all the services you need for reasonable costs.

And, of course, you’ll need a good point of sale (POS) system. These days, the best point of sale systems are more than just where the customer pays; they also help you with inventory, customer relations, reports, and more.

We’ll discuss POS, payment processors, and eCommerce sites later on in this article.

You’ve got your designs; next, are you going to print your shirts in-house? Or do you want to use a third-party printer?

If you decide to print your own shirts, you’re going to need equipment, which is going to increase both your startup and ongoing costs. You may also need to consider renting space outside of your home if you don’t have the space to set up your own studio.

Look into equipment loans to help alleviate these initial costs.

If you choose to use a third-party printer instead of printing in-house, you will be running a dropshipping company. As with any business model, there are pros and cons to dropshipping. Before getting started, determine whether dropshipping is worth pursuing.

You’ve started laying the groundwork for your t-shirt business, and now it’s time to make everything legal.

The first step is to determine what type of business structure you will form. The business structure you select will determine how much you pay in taxes, as well as whether or not you will be personally liable for the debts and obligations of the business.

There are various types of business structures to choose from for your business. The most common business structures are sole proprietorships, partnerships, corporations, and limited liability companies (LLCs). Note that there are different types of corporations, such as C-corps and S-corps, so make sure you understand the difference.

Once you’ve decided on a structure and name, you will need to register your business.

How are you going to sell your shirts? Do you want to open a brick-and-mortar store, set up an online shop, or sell your shirts at stores in your local area? You don’t have to pick just one avenue, either!

The perfect avenue for your business is going to be whatever works best for your goals with the business. Is this going to be your full-time gig? A side hustle? Read on to learn more about some of your options.

Online Store

Arguably the easiest method, customers can browse your designs and purchase directly through your site. You can ship the orders yourself or work with a dropshipper to make the shirts on-demand once the order is placed.

The main benefits of this method are the low startup and overhead costs, ease of use for your customers, and the number of different platforms you choose from. We’ll talk more in-depth about this option later on.

Brick-And-Mortar Storefront

You can more directly reach and interact with your customers if you go with this route, but you will have much higher startup and operating costs. Rent, utilities, business licenses and permits, equipment, insurance, etc., are all factors to consider.

If you live in a more rural area, you might not be able to reach a very large customer base. If you’re in a larger city or a popular tourist destination, then opening a storefront could be a very profitable venture for you.

Sell With An Existing Business

Do you know a local retailer that focuses on selling local products made by local business owners? Consider printing small batches of your shirts and networking with local boutiques and businesses in your area.

This will give you the benefit of a physical storefront without paying for your own commercial space, but you will have to pay the business owner for the opportunity to use their space.

Local Markets

Have you visited your local farmers’ market before? Have you noticed that there’s more for sale than just local produce?

Consider selling at a local farmers’ market. Like online selling, you would benefit from low startup and operating costs with the added benefits of face-to-face customer interaction.

Unfortunately, your shirts are not going to sell themselves, so you’ve got to market your business! It’s better to start too early than too late.

One of the most effective methods is creating a social media campaign, but there are other ways to market your new small business as well, including:

• Email marketing
• Physical flyers
• Free shirts at events
• Reviews/pictures from customers
• Business cards

To fund your online t-shirt business, consider applying for personal loans, small business loans, lines of credit, grants, business credit cards, or any combination of these options!

You don’t have to print your own t-shirts; you can work with a print-on-demand company to avoid the costs of equipment and extra space required for it.

You can sell your t-shirts online, open your own storefront, work with an existing local business, and/or consider selling them at local markets throughout the year.