How to Start a T-Shirt Business: Everything You Need to Know

Before you ask how to start a T-shirt business, take a minute to consider why you want to start a T-shirt business.

Do you have great designs that you want to share with the masses? Do you see that the promotional products or uniforms niche is under-served in your area? The reasons for starting your foray into the T-shirt business should be outlined from the jump, as with any good business plan.

How to start a T-shirt business: A step-by-step guide

One of the great things about the T-shirt business is it’s something of an equal-opportunity industry. It doesn’t take much to get started, and where it goes from there is up to you. In fact, with the rise of ecommerce, dropshipping, and home-based business, you can start a T-shirt business without a lot of capital.

“In this industry, you can do it small. You only need minimal overhead, and you could do it out of your basement without any issues,” says Steve Clark, an account manager for The Icebox, an Atlanta-based apparel company that now produces corporate swag and does creative services consulting. “Then you need the drive, you need to do the research, you need to see how you’ll differentiate yourself—the basic kind of rules that apply to any business.”

A quick internet search will bear this out: You’ll see no shortage of articles and videos that boast of how quick and relatively inexpensive it is to start a T-shirt business. But here are a few things to consider before you jump in.

Step 1: Identify your market

When starting a T-shirt business, you'll first want to establish what kind of T-shirt business you want to start—this, in turn, will determine the answers to questions like what the quality of your shirts will be or how much time to dedicate to your designs and business branding. For example, if you’re creating T-shirts for gym members, you’ll want performance fabrics, while lifestyle brands will want high-quality T-shirts that fit fashionably. Consider the needs of your future clients before moving forward.

Once you've established your niche market, you'll have a better idea of how you want to sell your T-shirts. If you’re interested in starting a retail line—which is more likely than creating a B2B (business-to-business) line if you’re starting up from home—Clark advises you take one of two avenues:

“You can go the boutique route, where you’re online as well as in the little local shops and stores around town. Larger brands, selling to major retailers like Macy’s, is an entirely different ball game—you need a lot more capital behind you to tackle that, since they’ll want to know what you’ve got lined up for next season if you show them a line they like. You need to be able to eat a lot of product. You’ll have to adhere to lots of specific regulations, and they’ll charge you if you make mistakes,” he says.

How much money does that initial run need? “If you’re willing to invest in the area of $5,000, you can create a retail line,” says Clark. “And then you have to get out there and show it.” You can go lower, but you run the risk of being “one and done” if the T-shirt line doesn’t pan out.

The direction you choose when starting your T-shirt business isn’t set in stone. The Icebox started in 2001 with the mission of simply doing things cooler, better, and friendlier than everyone else. It now has over 6,000 customers that order from them in a range of scopes and budgets. Being business-to-consumer or business-to-business is just a starting point if you have larger aspirations.

Step 2: Design your T-shirt

Sounds simple enough, but once you decide who you're marketing to it's essential to start figuring out what your T-shirt (or shirts) will look like. As you're starting your T-shirt business, there may be a good deal of trial and error to figure out what resonates with customers. Just because you love your design doesn't mean your potential customers do too.

To avoid wasting money on failed designs, it helps to do your research before taking your T-shirt to be made. Think about your target market: What do they like to wear? How do they wear their T-shirts? When do they wear their T-shirts? Answering these questions will give you a better idea of how to design your product when starting your T-shirt business. Next, consider your T-shirts' fit, size, color, material, weight, and softness—then pick the materials you want to use to design your T-shirt.

While doing this, think about the quality of your product. If a customer buys a T-shirt from you and the shirt shrinks dramatically after one wash, or the colors fade, they probably won't buy from you again. This also means you'll be unlikely to benefit from word-of-mouth marketing. Using higher quality materials will safeguard against this happening—but will also cost you more money. So it helps to try and find the right balance—and remember, if your first design doesn't work, don't be afraid to scrap it and start again.

It's also important to make sure your design isn't trademarked or copyrighted to avoid future legal headaches.

Step 3: Make your business legal

Depending on where you're located, you may be required to get a permit or a license before you can start your T-shirt business. You want to be certain that your business is legal before you start operating to avoid a headache down the line.

It's also important to register your T-shirt business's name. You can do this by filing paperwork with your local secretary of state. If you plan to operate under a fictitious name, you'll need to file for a DBA (doing business as). Typically, only sole proprietorships and partnerships require a DBA, but in some cases, LLCs and corporations can also file one.

Which brings us to your business entity. When you start a T-shirt business, you'll want to decide what type of business entity you will be. Deciding between a sole proprietorship, partnership, limited partnership (LP), LLC, C-corporation, or S-corporation can be a difficult decision with legal and financial implications.

Step 4: Determine your overhead

The man responsible for the formation of The Icebox, Scott Alterman, started his apparel career by selling shirts out of the trunk of his car while he was still a graduate student. Suffice to say, the term “overhead” doesn’t mean as much in this industry as it does in others. That said, here are the startup costs you should consider when starting your T-shirt business.

Fixed costs

“You’ve got rent, insurance, and keeping the lights on. It’s almost like your house—your utilities, your space, and can you eat?” says Clark. “There’s not a lot that goes into it, if you start smaller. You then build expenses on top of that: If you don’t have a location, you invest in your web infrastructure, including search engine optimization.”

In terms of web presence, you can choose to create your own business website and ecommerce platform, or use third parties like Shopify or Etsy to help streamline the process. Some of the money you might have spent on a physical location can be put toward marketing your T-shirt business's website instead.

Paying for inventory

You also need to cover how you’ll source and create your shirts when starting your T-shirt business. You can find a vendor to sell your T-shirts in bulk, then choose from a number of printing options, such as:

• Screen printing: A great volume choice, though less capable of complex, colorful images.

• Heat transfer: You can print on demand, but expect poorer quality and the upfront investment of a heat press.

• Direct-to-garment: Unlimited color options and great detail, though not recommended for volume runs.

One good way to find resources as you start your T-shirt business is to join a membership organization like SGIA, PPAI, or ASI. These organizations usually provide tutoring, mentoring, conventions, and good ways to save. Mentoring can be helpful when you're trying to work out your distribution strategy, for both online and in-person outlets.

“You’ll have to spend some money upfront, but memberships to those groups are cash forward,” says Clark. “You get your products, shirts, mugs, or whatever you want to print on, through the networks you join. As long as you have an EIN (employee identification number), you can become a member and buy shirts at good prices.”

Another option to help you pay for necessary supplies as you start your T-shirt business is inventory financing—but note that it can be difficult for a startup to qualify for.

Step 5: Market your business

Once you create your line and your website, the next step in starting your T-shirt business is getting the word out about your product. Even the most fantastic designs or best prices need buzz.

Before Clark joined The Icebox, he had his own apparel company called Zoink. Here's how he went about building a clientele from zero:

“Call and network,” he says. “When I started, I targeted certain markets, and I picked up the phone and I called. I got shot down nine out of 10 times, but one client is one client. Who you know plays such a huge role and you have to promote yourself constantly. No one is just going to find your website and think, ‘Sure I’ll buy from here,’ unless there’s some buzz around it.”

In order to battle the “drudgery” of the situation, Clark suggests setting a goal to reach every day when reaching out to prospective clients.

“Make 25 calls a day, to get five callbacks, to get one meeting, and hopefully one client. You need to have the perseverance.”

Another thing that will help market your product—especially in the fashion industry—is having a well-defined brand. There are so many different clothing options out there—so creating a brand that will resonate with your target audience is key. Ideally, you want to cultivate something that speaks to the uniqueness and quality of your T-shirts. Then, market your T-shirts in ways that reinforce your brand.

Step 6: Don't overextend yourself financially

Starting a T-shirt business may have minimal startup costs, but that doesn’t mean you can’t overextend yourself with poor investments. During the Zoink days, Clark created a mantra that he still adheres to: “Don’t buy a pencil if you don’t have to.”

“When I started my business, I was very excited and very committed, I had employees and equipment and the whole bit. Everything was going great—but we were able to maintain it because if we didn’t need a pencil, we didn’t buy it. We were very conscientious. Every nickel you spend needs to go in the right direction. The marketing budget should be well-spent. If you can do some parts of the business yourself, do it yourself, even if it costs you some hours. Do anything you can do to save money on the front-end,” he says.

Just as important as not spending money is having enough in the first place, in case you need to weather any financial storms. Clark cites capital as the number one mistake he made in the early going.

“Don’t do it under-capitalized. I didn’t have the capital I needed behind me to get through the lean times, and I should have had more capital going out of the gate. I should've had three times the capital I started with.”