If you're itching to combine your entrepreneurial spirit with artistic flair without having to lay out a boatload of cash, starting a T-shirt business from home could be for you.
Custom T-shirts are a wardrobe staple for people around the globe. In 2020, the custom T-shirt printing market was valued at $3.64 billion worldwide with expectations of exponential growth in the T-shirt industry for many years to come. Considering the fact that you can start your own custom T-shirt printing business for about $1,000, now's a great time to jump into this easy-to-master, growth-positive business.
This article will cover how to start selling T-shirts from home, including:
- Deciding on the type of home T-shirt business you want to create
- Creating an initial business plan for your home-based business
- How to market and sell your T-shirts
- Determining the best legal structure for your business
- How to handle your small business accounting functions
Custom T-Shirt Business Plan
Before jumping in, you'll want to develop a plan for your home T-shirt business. Start by:
- Determining a theme for your T-shirts
- Picking the right design and printing methods for your budget and skill set
- Determining your startup and ongoing costs
- Setting up a marketing and sales strategy
Determine a Theme for Your Custom T-Shirt Business
There seems to be no end to the different themes for custom T-shirts or design ideas you can come up with. If somebody does it, likes it, loathes it, or laughs about it, there is a T-shirt for it. General T-shirt design themes include:
- Sports and hobbies
- Pets and wildlife
- Travel and lifestyle
- Holidays and seasons
- Spirituality and religion
Each of these can be further segregated into subcategories. For instance, the careers theme can be broken down into health care-related jobs and further broken down into nurses or physical therapists. Once you settle on a subcategory, think about drilling down even further into a smaller niche, such as physical therapy humor.
Consider starting with marketing your T-shirts to a community you're involved in or to people who share one of your interests. There is a lot of competition for custom T-shirts and defining a niche where you have connections will help you break through all that competitive noise. You can always expand your themes as your business grows.
Pick a Design and Printing Option
You will have to decide whether you're going to produce your own designs or contract them out. If you have graphic design skills and are proficient in using design software like Adobe Photoshop or Canva, you might want to create your own T-shirt designs. If you aren't a graphic designer and need help getting your good ideas into designs, you can also outsource your designs — Upwork, Dribbble, and Fiverr are great resources for finding freelance design help. You can even purchase ready-made designs from established T-shirt graphic sellers like Buy Tshirt Designs.
You will also need to decide how you will print your shirts. Options include:
- Screen printing is popular for the results it achieves: colors that stay vibrant and designs that are smooth. Silk-screened T-shirts stand up to regular washing and drying without fading and looking worn out before their time. While more expensive to get started, it's a preferred process if you plan on producing quality T-shirts in larger quantities.
- Screen-printed transfers use the same type of ink as screen printing and the results are equally as durable. The process is less labor-intensive since you order the designs pre-printed from a supplier. You then apply them to the T-shirt using a heat press. The process is faster and easier than screen printing.
- Heat transfer vinyl (HTV) uses a similar process as screen-printed transfers, except you print and cut out the design yourself from rolls of colored vinyl before using the same heat press method as screen-printed transfers.
- Direct-to-garment (DTG) printing is popular for startup T-shirt businesses because you can produce high-quality printed T-shirts using technology similar to using an inkjet printer. While startup costs are lower than other methods, DTG printing is best suited for smaller orders.
Each method has different startup costs and learning curves, as well as ongoing production costs. Thoroughly research each method to determine which best suits your new T-shirt business plan and your skills, workspace, and budget. There are plenty of videos and online tutorials that provide step-by-step guides on how to create print design mockups.
While profit margins will be lower, you can also work with a demand service to design and produce T-shirts for you. Many of these companies — Printify and Printful are two examples — also provide dropshipping services so you don't even have to physically handle inventory. They do most of the work and you still make money.
Consider Additional Costs and Price Points
Along with procuring or producing designs and purchasing equipment for your T-shirt business, you'll need to consider additional upfront costs of doing business. For example, you will need to:
- Determine the quality and cost of the T-shirts you will use and how much inventory you plan to maintain
- Set up a location to house inventory and for your production operations
- Stock up on shipping supplies so you can fulfill customer orders
Once you have determined all of your costs — including any out-of-pocket costs associated with marketing and sales (discussed later) — you'll need to figure out how much you should charge for your T-shirts. Start by determining your cost of goods sold (COGS), which is a calculation representing all of the costs required to create and sell your T-shirts. While this may seem daunting at first — especially if this is your first business endeavor — Skynova's accounting software makes it easy to calculate overhead costs and determine important metrics like gross profit and your break-even point.
Market and Sell Your T-shirts
There are many ways to go about branding your new business and reaching out to potential customers. You might want to consider these strategies:
- Choose a business and domain name that will appeal to both your target market and its influencers. You might want to do some market research — including scoping out other vendors who have bestsellers within your genre — to see what marketing monikers they have adopted.
- Create a website to showcase your online T-shirt business and sell T-shirts directly to consumers. Online sales require a strong e-commerce platform. A great way to begin is to create an online store to peddle your T-shirts. While you can establish an e-commerce business on your own, there are several easy-to-follow templates and platforms you can use to start selling fast. Here are a few e-commerce platforms to get started:
- Leverage social media platforms. Use your Facebook, Instagram, LinkedIn, and other social media accounts to let people know that you're starting your own T-shirt company and to connect with your network. Link to your online T-shirt store and post samples of your designs. Be sure to ask your contacts to spread the word. Word-of-mouth advertising is often the best and fastest way to jump-start a new small business.
- Consider paid digital marketing. Depending on your budget, consider buying some targeted digital marketing ads on Google Ads, Facebook Ads, and Instagram.
- List your shirts on online shopping sites. Consider listing your shirts and/or creating stores on sites like Amazon, eBay, and Etsy.
- Set up a sales booth at art, music, and other festivals. Depending on the niche you're trying to penetrate and your target market, you might consider offering your shirts for sale at festivals and other events where your target audience is likely to congregate.
Establishing and Running Your Home T-Shirt Business
It's important to establish the right legal framework for your business and find the right system to help you operate your business.
Legal Frameworks for Your T-Shirt Business
Generally speaking, there are four types of legal structures you can use for your business:
- Sole proprietorship
- Limited liability company (LLC)
Choosing the right business for your purposes will depend on several factors, including how much personal liability exposure you don't mind being subjected to, the tax consequences of your choice, and the expense of keeping necessary documents properly filed with your state.
When you operate as a sole proprietor, you are taxed at your individual rate but don't have any protection against personal liability. As a corporation, you'll enjoy a higher degree of protection from personal liability but will pay more in taxes. An LLC is a comfortable middle ground for many small business owners, as it affords some protection from personal liability while keeping taxes at your personal rate.
As a T-shirt designer and seller who will be working independently and have little exposure to personal liability, you'll probably do well as a sole proprietorship. If you decide to form a corporation or an LLC, you'll need to file the necessary paperwork in the state where your business will be based.
Permits, Licenses, and Tax ID Numbers
Since you're operating a home-based T-shirt business, you probably don't need a business license (although you should check with your state and local government to be certain). If you sell your T-shirts at art or music festivals or other live venues, you'll need to check with each venue to see if licenses or permits are required and how to collect and remit sales tax to the proper authority. In addition, you'll need to track sales tax for online sales, as some states require you to collect and remit sales tax for internet sales even if you don't operate an in-state retail outlet.
You'll also need to determine whether you're required to obtain a federal tax ID or an employer identification number (EIN). Even if you aren't required to have an EIN, there are reasons to obtain one for your small business. Having an EIN allows you to open a business bank account. Delineating your business account from your personal account can be advantageous from both a bookkeeping standpoint and a potential liability standpoint.
Maintaining a Successful T-Shirt Business
To run a successful business, you'll need to keep track of business-related paperwork. Skynova's templates make it easy to invoice your customers, issue receipts, and include a packing slip with each order.
You can monitor all of your expenses and income with Skynova's accounting software, specifically designed for small retailers like you who may have little or no training in running a small business.
Spend More Time Selling T-Shirts With Skynova
You decided to start a home-based T-shirt business so you could work for yourself and have control over your own financial destiny. The last thing you need is to get tripped up by all the complications that come with bookkeeping and other accounting tasks.
That is where Skynova saves the day. Our online software options and business templates give you the freedom to do what you love while still making sure you have the support you need to run a successful business.
Notice to the Reader
The content within this article is meant to be used as general guidelines and may not apply to your specific situation. Always consult with a professional accountant to ensure you're meeting accounting standards and with legal counsel if you have any questions about establishing and maintaining your own T-shirt business from home.