How to Start a $41K/Month T-Shirt Business (2023)

Have you ever wondered how to start a t-shirt business? Starting a t-shirt business only requires a little investment and some technical skills. You can start a clothing line and make a great living. We’ll show you how.

One of our success stories is about Sanford Booth. He started his own t-shirt printing company by buying a Big Frog franchise and turning his original investment of nearly $200K into a profit in only four months. He took home $80K the first year, and this year he’s expecting to make $550K! We’ll share his advice for starting a t-shirt company.

Now get ready to learn how to start a tee shirt business.

Step 1. What’s the Best Way to Start a T-Shirt Business?

The first step is to decide what t-shirt business model is right for you. Your t-shirt business should stimulate your creativity, but it should also appeal to your customers’ needs and wants.

Some t-shirt business ideas include:

• Focusing on a specific target market, such as small business t-shirts.
• Performing graphic tee design work and printing them yourself.
• Starting an ecommerce store using Print-on-Demand companies.

You aren’t limited to just one type. Which t-shirt business model(s) you choose will impact every business decision you make.

Sanford’s Big Frog Portland t-shirt franchise focuses on producing and selling custom t-shirt designs made to his customers’ specifications. He decided to get a Big Frog franchise after the 2008 housing market crash caused his real estate career to slow down. He told us:

Many consumers start their shopping experience online, so a t-shirt business that can sell clothing in person or online is recommended to start your clothing line.

Keep reading for different types of t-shirt companies.

How to Start a T-Shirts Franchise

A t-shirt franchise like Big Frog gives you a head start on your small business journey. The application process is similar to the interview process for a job.

How to Start a T-shirt Printing Business with Big Frog

Follow these steps to apply for a Big Frog Franchise:

1. Request information.
2. Get to know the franchisor on a business call.
3. Attend a webinar that goes into more detail about the responsibilities of an owner.
4. Fill out disclosure documents to prove you have the resources necessary to start a t-shirt business franchise.
5. Meet other franchise business owners.
6. Go to the headquarters and:
   • Get to know the corporate team.
   • Learn to press T-shirts.
   • Learn about their customer support.
7. Start the franchise.

Every franchisor will have different requirements, but most franchises require a minimum of $100,000 to $300,000 to get you through the first year. This is consistent with Big Frog’s requirements of:

• No less than $50K liquid assets
• At least $40K working capital
• $300K net worth (varies based on regional construction costs)

These numbers are in place because the following are consistent across all of Big Frog’s franchises:

• $39,500 initial franchise fee
• Initial investment of $188,344 to $247,944
• A 6% royalty paid monthly on revenue
• 1.5% of revenue for marketing costs

Ultimately, this pays off because you have access to proven methods to make a great living printing t-shirts. The top ⅓ of stores open for more than a year make more than $600K in revenue with a 63.5% gross margin. This is comparable to what Sanford told us:

Before you start reading, check out our interview with Sanford. He shared lots of advice about how to start your own t-shirt business that you can use as a step-by-step guide.

How to Start a Brick and Mortar T-Shirt Business

We’ve all been to a brick-and-mortar store. Their business model is selling t-shirts in a building where people can come to the store, try them on, and buy what they like. These stores may sell a single clothing line, multiple clothing brands, or custom t-shirts.

With the rise of ecommerce, this part of the industry is hurting. Closures of retail stores have been increasing for at least the last three years, according to Moneywise. Despite this, Digital Commerce says retail sales have increased around 3% per year since 2007, meaning the stores that stay open are making more money.

This business model works with franchises and stores that run a tight ship. They tend to need sales of $40K per month to be safe. Otherwise, you’ll probably want to start a different way.

Sell Custom T-Shirts

T-shirt companies that run this way focus on a specific brand. This type of business can be a physical retail clothing store, fashion design, e-commerce, print-on-demand service, manufacturing, or a combination of these. A business plan using this model typically focuses on a niche market to satisfy their needs and may expand into other markets later while keeping the brand image.

As a franchise owner, you may want to try to find clients like this to provide printing services. They can become steady clients.

Sell T-Shirts Online

An online t-shirt business focuses on ecommerce through an online store. According to IBIS World, there are 278 business owners selling $582.4 million in t-shirts online for a combined $18.1 million in profit margins. This doesn’t include businesses that don’t classify themselves as an online t-shirt business. Check out their full list of specialized reports.

You can sell t-shirts through lots of websites. Here are the top places to list your t-shirts online:

• Amazon is the largest online marketplace on the planet. You have to be listed there.
• Facebook and Instagram Marketplaces are also massive. Some functions can be done through one platform and then work on both, but others have to be done separately. 
• eBay is another great place to sell t-shirts online. Learn about selling on eBay.
• Shopify offers an easy experience to set up your own clothing store and connects with most of the bigger marketplaces directly from your shop.
• WordPress and WooCommerce work great together for super fast ecommerce stores.
• Etsy is another great marketplace for an online t-shirt business. Check out our guide on creating an Etsy shop.

How to Sell Shirts Online with Print on Demand

You may wish to consider starting a Print-on-Demand (POD) t-shirt business because you don’t need inventory to start selling t-shirts. POD is perfect if you’re wondering how to start a t-shirt business at home.

You simply create a t-shirt design, add it to the print-on-demand company’s garment design software, and connect it to your ecommerce platforms to start selling it. Shopify has a great blog about the top print-on-demand companies.

My favorite is Printful because the graphic tees design software is easy to use, fast for delivery in the U.S., and easily integrates with Shopify, WooCommerce, Facebook, and Amazon. You might want to consider Amazon Merch to sell your t-shirt business designs because they have fast shipping and a huge number of customers.

If you run another type of t-shirt design business, you could hire a developer to drive more revenue by providing printing and shipping services to your client’s customers.

Fashion Designers

Fashion designers focus on designing new clothing that is both stylish and unique. They are primarily focused on the art of their products. When a t-shirt design business reaches this level, the brand is typically at the top of the fashion industry.

They are typically artistic people who make designs and accessories that stand out. They can be self-trained or go to fashion design schools. If you are interested in fashion design education, here are the top 50 schools.

Wholesale

Wholesale is focused on selling t-shirts in bulk orders. To do this, you will typically need to offer retailers t-shirts at 50% of MSRP. You might want to implement this strategy once you develop a reputation for your own online t-shirt store. eCommerce solutions have made it easier because you can combine this strategy with print-on-demand services for selling t-shirts.

Here’s a great list of apps that will make wholesaling easier for your t-shirt brand.

Manufacturing

Manufacturing t-shirts is focused on creating t-shirts from field to thread to final garment. This is the most cost-intensive portion of the t-shirt industry because you’ll need a warehouse, fabrics, employees, and machines. That can add up to hundreds of thousands of dollars.

I’d only recommend this strategy at the point in which you are a solidly profitable company, when the only way to increase gains is to buy the machines to produce the garments yourself. Make sure to reach out to a financial expert who specializes in t-shirt manufacturing before doing so.

In case you didn’t gather it from the list of t-shirt business ideas, an online t-shirt business is the most likely way to reach success. After your ecommerce business sees success, you can start expanding and adding other business models to your operations.

Step 2. Learning the Skills

You can’t start a t-shirt business without learning the necessary skills. There are five basic skills you need to sell t-shirts online successfully:

1. Design
2. Technology
3. Marketing
4. Production and printing
5. Business skills

Let’s dig deeper into each of these to see how they impact a custom t-shirt company.

Design Skills

Before you can sell tees, you need t-shirt designs. T-shirt designs are typically created by someone with graphic design skills. This person takes t-shirt business ideas and makes them a reality.

T-shirt designs will typically include several steps in the design process. The steps to design your own t-shirts include:

• Draw t-shirt designs using digital software, like Photoshop, Canva, or Illustrator.
• Have a pattern maker cut the patterns for the design.
• Build a prototype.
• Make alterations.
• Create a tech pack. A tech pack is just the design specifications you give to a clothing manufacturer.
• Source the materials and begin manufacturing.

This process will change some based on what types of machines you are using. For instance, Sanford uses a direct-to-garment printer (DTG) to print his designs. He told us:

The printer plus software makes it so the process goes straight from design to print.

I’m not going to go into all the details of each type of printer because it is a highly technical field, but some of the most common printing techniques are:

1. Embroidery machines
2. Heat press
3. Sublimation
4. Screen printing

Resources

There are a ton of great resources on how to design clothes. Here are some useful ones:

• Best Fashion Design Schools
• Best Free Online Classes
• Best Fashion Design Software
• Best Print-on-Demand Companies

Technology

Another crucial step is learning the technology you’ll use. Paying a developer to create a website selling t-shirts online can be expensive. I’ve seen people spend $25K to not get what they want. It’s possible to get good work without understanding how to use the following tech, but you should probably learn about them first.

• An ecommerce platform (Find Investopedia’s review of the best ones here.)
• Payment processors
• Editing software
• Marketing software

Most tech companies offer free trials or low-cost tutorials on how to use their software. Make sure to use them. They were built to help you make the most of their offerings.

Marketing

Relevant marketing will help you reach your target audience and let them know about your t-shirt printing. Without it, finding customers can be a real challenge. Marketing can be done both online and through other channels.

The largest marketing companies expect digital marketing to make up over half of all ad spending for the foreseeable future. To read more of their insights, check out this blog.

You’ll need to be familiar with the three largest ad markets for your t-shirts:

1. Facebook and Instagram
2. Google
3. Amazon

Make sure to familiarize yourself with them; otherwise, you’ll be operating in the dark and wasting a lot of money.

It’s important to have social media accounts connected to your online t-shirt business to build an online presence that will help sell t-shirts online and in person.

Big Frog collects 1.5% of revenue and uses it for marketing franchises. Sanford told us:

Watch the full interview here to see what else Sanford has to say about marketing.

Built-in marketing costs make custom t-shirt printing easier than without a franchise.

Production and Printing Skills

Your t-shirt business will need to produce t-shirts, which can be done through a manufacturer, or you can print your own t-shirts and other apparel products. If you are going to print t-shirts, you’ll need to learn how to make a shirt with different types of machines.

Some of the typical techniques you’ll need to learn include:

• Screen printing
• Direct to garment
• Transfer printing
• Cad cut vinyl
• Embroidery

Sanford walks you through the direct-to-garment printing process at the 6:28 mark of the interview.

Printsome offers a good infographic on deciding what kind of technique you want to use.

You’ll want to know screen printing and heat transfer techniques, which means purchasing your own machines or finding someone to teach you hands-on. If you are running a franchise or printing shop, you’ll need to learn which ways work best for t-shirt businesses.

Business Skills

Business skills cover a wide range including accounting, pricing, shipping, and managing inventory. We’ve provided a list of useful resources by business topic:

• Accounting: Udemy, edX
• Pricing: Coursera, Udemy
• Shipping: Shopify, BigCommerce
• Inventory Management: Quickbooks, Unleashed

Sanford told us that franchises provide you with lots of guidance for your own business.

Step 3. T-Shirt Business Name

You’ll want to choose a name for your own online store t-shirt company. The name shows your personality and voice. Your t-shirt business should take into account the following considerations about brand presence:

• Will the name indicate your business sells shirts?
• Is it easy to spell?
• Will you focus on local sales? If you do, consider including the name of the location.
• Is the .com domain available?
• Is the business name unique?
• Does your name fit your branding? Check out Big Frog’s logo:

Big Frog Custom T-Shirts, Inc is the full name of Big Frog. The name clearly states what it does: create custom T-shirts. In addition, it’s memorable. There are not many companies with similar names.

Try out our business name generator. Next, register your business name with the government.

Step 4. Write a T-Shirt Business Plan

You need a t-shirt business plan to define and guide your vision for the t-shirt company. Your plan will drive your t-shirt business by:

• Guiding decisions
• Securing financing
• Developing partnerships with other businesses 

One of the benefits of buying a t-shirt printing franchise is simplifying decision-making because the franchise will specify or help you with:

• Suppliers
• Location selection and lease negotiation
• Design and layout of the store
• Training 
• Marketing
• Recruitment

According to Sanford:

Your plan should evolve to allow your t-shirt business to change with the market. Check out some of our favorite resources for planning.

Resources

We’ve gathered templates to help you develop your business plan. Here are some of the best:

Check out our interview with Mike Andes to get step-by-step instructions on business planning:

Step 5. Establish a Legal Structure

Starting a t-shirt business requires getting a business license, tax permits, and choosing how to classify your business:

• Sole Proprietorship: Most franchises will not allow you to run a sole proprietorship because there is no liability protection, but it’s the least expensive way to start a business. Fill out a Schedule C to get started. Consider joining the American Independent Business Alliance.
• Limited Liability Corporation (LLC): Each state has different requirements. Check your state’s requirements. You might choose to register in a different state than where you live to reduce the cost of doing business. Check out the top 10 states to get an LLC.
• Corporation: If you intend to sell stock or raise funds by selling equity, you might want to become a corporation. Otherwise, stick to an LLC.
• Partnership: Normally, legal firms operate as partnerships. Unless there is a specific reason you need a partnership, it is better to do a multi-person LLC. Investopedia has good information about partnerships and corporations here.
• Franchise: Buying the right to use a company’s processes and intellectual property to run one of its locations. Franchising.com has two franchise opportunities to start a t-shirt business in the United States. Big Frog is the only Direct to Garment (DTG) t-shirt franchise.

For best results, hire legal representation with experience starting a business, like an attorney, accountant, or tax specialist. They’ll help you start your custom t-shirt business and start selling designs faster.

Learn more about business structures.

Get an Employer Identification Number (EIN)

You’ll need to apply for an EIN from the Internal Revenue Service. It’s free, but you must go online during normal business hours. An EIN is necessary if you want employees or financing for your online t-shirt business.

Licenses, Permits, and Tax Forms

Each location has different licenses, permits, and tax forms required. Use the SBA License and Permits page to identify what your custom tees company needs. Keep reading for information on different legal structures.

Step 6. Getting Ready for Customers

Your t-shirt business is now an entity, but there’s more. 

The order you complete the rest of the steps, you’ll depend on your resources, skill sets, and the type of t-shirt company you start.

There are six areas of business you’ll need to make decisions about:

• Location: Where will you be working?
• Inventory: What will you sell, and how will you pay for it?
• Employees: Will you have employees, and how will you make sure it is a safe environment?
• Finances: How will you keep track of transactions and financial records?
• Insurance: How can you protect what you are building?
• Marketing: How will you find customers?

Step 7. T-Shirt Business Location

You might need a physical t-shirt business location. Connecting with local business owners is easier if you are near your target market. If you have enough products, you’ll need a business location or fulfillment center. Otherwise, you may want to choose the location based on the wealth distribution of the area, the price of space, or choose a central location that is convenient for more people.

When deciding to rent a space for a clothing line, consider:

• Do you need space for screen printing equipment and inventory?
• Are you running an online t-shirt business? If so, you can run it from home.
• Will customers be coming to your small business?
• Does your t-shirt store have inventory?
• How will you display your t-shirt designs?
• How much space is needed to store your t-shirt designs?
• Will you host a traveling pop-up t-shirt store?

When opening a t-shirt company, you should rent space if you store inventory. You’ll want to plan ahead based on whether the space is a warehouse for an ecommerce store or a storefront where you can display your own t-shirt designs.

Franchises will typically help new business owners find a spot that works based on their previous experience. This can make a huge difference as every town seems to have locations that are just cursed to cycle through businesses.

To find spaces to rent in your area, contact a local commercial RE agent.

How to Start a T-shirt Business From Home

Each city and state has different requirements for where a business is allowed to be located. Local ordinances and franchises might not allow a t-shirt business to be home-based.

How am I supposed to start my t-shirt brand with so many rules for a small t-shirt business? Just search the Municode Library to find your city regulations.

Finding a Good Spot

When looking for a space to rent, consider your ideal client and what stores they might frequent. For instance, a t-shirt printer might do well in a high-traffic mall or a space with a high density of local businesses. Finding the right place will take some research, which will be much easier after considering your marketing efforts.

Step 8. Inventory, Screen Printing Machines, and Product Displays

A new t-shirt store needs inventory unless you are starting an online t-shirt business with print-on-demand. You’ll need the t-shirts you’ll be selling, product display stands, registers, computers to design t-shirts, and the machines for adding designs for shirts. You may need several machines based on the many different types of t-shirts. These can range from heat presses to DTG printers to embroidery stations.

Sanford uses the DTG printers for most of his work. He told us, 

I have found that kit.co is a good starting point to see what others suggest.

Startingaclothingline.com offers a list of manufacturers by location and type of clothing. It’s a great place to start when looking for manufacturers.

Used Printing Machines and Product Displays

Printing machines and product displays can often be found at huge discounts if you buy them used. You can find printers and product displays through online markets, pawnshops, going-out-of-business sales, and other places.

When buying a franchise, they may specify the exact machines you should use. For instance, Big Frog uses Brother DTG Printers.

Considering buying an existing business? The equipment and inventory should be included in the purchase price. Learn more about valuing an existing business in our guide about buying businesses. Then check our business listings for available print shops.

Step 9. Employees

Sanford emphasized the importance of hiring people who are better at their assigned roles than you are:

You’ll need employees. Big Frog wants its owners to build the business rather than work in the business. Keep reading for more information.

Tax Filing and Withholding

Federal and state tax filing requirements apply to new employers. You must keep records of employment taxes for a specific duration, including special forms and accounting for state taxes. (Please remember: I’m not licensed to give legal advice on the duration, and the IRS has been known to change things.)

Don’t worry! We’ve got you covered! Check out the IRS guide for employers.

Federal Employment and Labor Law Posters

All employers must display Workplace Posters, which you can download from the website.

Other requirements include:

• Employment Eligibility Verification (Form I-9)
• State’s New Hire Program
• Worker’s Compensation Insurance
• Disability Insurance (varies by state)
• Occupational Safety and Health Administration (OSHA)

Job Posting

Hiring people requires posting “now hiring” signs and posting on prominent job boards. Some places you can start posting job requirements are:

• Facebook
• Indeed
• Zip Recruiter
• LinkedIn
• Craigslist

Sanford told us:

Interviews

Prepare a list of questions for interviews and simplify your hiring process. Indeed offers a resource guide to help you make better hiring decisions.

Sanford suggests including your employees in the interviews. He told us:

Compensation

Employees are typically a company’s biggest expense. There are three common pay structures in business. Each fits a different scenario. Let’s take a closer look:

• Salary: You might want to assign yourself a flat weekly or monthly rate for budgeting purposes.
• Hourly: This pay structure tracks the hours an employee works and pays them a set hourly rate, but it doesn’t reward performance.
• Commission: If you only want to reward performance and not time, a percentage of revenue is the way to go.
• Hybrid Models: Hybrid models combine two pay structures. Combining hourly and commission encourages employees to help drive sales.

Sanford told us:

The article “How to Create a Pay Structure That Promotes Team and Company Growth” offers some insight into pay structures.

Step 10. Financial Management

A successful t-shirt business manages the financial aspects. Sanford emphasized the benefits of managing margins:

He also discussed the importance of following up with your clients: 

You may need some extra funds to start your clothing brand. To find banks that work with small businesses, use this resource.

Let’s look at some tricks you can use to help your clothing line become profitable.

Budget! Budget! Budget!

A budget is the most important tool you can use in business. Without it, your high-quality t-shirts might not make enough money during the first few years.

Sanford told us:

However, be careful using spreadsheets. According to Ray Panko, professor of IT management at the University of Hawaii, “1% or more of all formula cells” contain errors. 

Try using accounting automation to save money over hiring a full-time accountant to deal with paperwork. Some of the best free budgeting software include:

• dsBudget: This open-source software requires some development experience.
• QuickBooks: This popular resource is used by millions to make their accounting easy by setting up rules, connecting with their bank(s) directly, and more.
• Xero: I was introduced to them through an Australian client, and people love them. In my experience, it allows you to automate most of your processes but is meant to be set up by an accountant and software developer so that the platform works specifically based on your location(s) tax needs.

If you’re running an online t-shirt business, such as print on demand from home, you’ll need to make far less. My break-even point is 35 t-shirts for every $100 of expenses. You need to review your costs often because material pricing changes regularly.

How to Start a T-shirt Business with No Money

Starting a t-shirt company doesn’t cost a fortune. While it cost Sanford “$180–$200K for the franchise fee, equipment, and building with remodeling,” other shirt entrepreneurs have started a t-shirt printing business for less than $1,000.

In our interview with Marcus from Portland Gear, Marcus suggests beginners use the following to start a t-shirt business:

• Shopify: Get a free 30-day trial of Shopify with our affiliate link.
• A print-on-demand company: I prefer Printful.
• Social media marketing: This might be less than $500 per month and is typically more economical than other options.

Hear more from Marcus below:

Common Funding Paths

eCommerce entrepreneurs often fund their t-shirt online store with personal funds, but you can also consider taking on:

• Loans from family or friends
• Business partners
• Government programs

The SBA offers free courses on financing options and funding programs. For info on using personal funds to start a business, check out this article from The Hartford.

Alternative Sources of Funding

You might also want to consider the following ways of getting into the t-shirt printing industry.

1. Crowdfunding 
2. Credit cards
3. Home equity loan
4. Rollover for business startups (ROBS)

Develop a Pricing Structure

How you price your clothing brand will impact how people view it. If your prices are too high, customers will go elsewhere. Too low, you’ll lose money. Based on the rules of thumb presented by Marcus in his interview:

You can use this online calculator to estimate your price points:

Increase Prices Every Year

Inflation occurs every year. You might need to raise your prices by 5% per year to keep up. In this high-inflation environment, you may want to increase your prices quarterly or monthly. It gives you room to increase wages and make some extra money for your online t-shirt business.

It’s easier to raise prices when your customers expect it. One way to help prepare customers is to follow this process:

1. Send an email in November letting your customers know that prices will be going up at the beginning of the year.
2. Book enough online t-shirt business to keep you busy through the slow months (January to March).
3. Raise prices on January 1st. 

Step 11: Sales Tax and Insurance

Sales Taxes

All but five states, and some cities (or counties), require sales tax. You can find a guide on applying for sales tax on TaxJar. After you register to pay sales taxes, you will need to keep track of the sales to pay them according to state laws. I would highly recommend speaking with an accountant that specializes in taxes to help you comply with your business’s unique needs.

Insurance

Get the insurance you need based on the type of business. You’ll need unemployment insurance and workers’ compensation if you have employees. You may also want general liability and cybersecurity insurance to protect against unforeseen events that could cause your clothing line business substantial losses.

Step 12: Marketing

Now you’re ready to sell shirts. You have the location, equipment, inventory, and employees—but no clients!

How are you going to let people know about your online t-shirt business?

Marketing is crucial for a custom shirt business. Franchises have an advantage here because they already have built-in clients and a marketing budget. They’ve also figured out what works. 

Sanford told us: 

More Marketing Tips for T-Shirt Businesses

He also suggests:

• Building relationships. Networking is what makes a business pay off.
• Continually focusing on SEO for your ecommerce business. Start by familiarizing yourself with Google requirements.
• Checking customers’ previous print jobs to give you ideas on how to sell more shirts.
• Following up! It makes a difference.
• Using analytics.

Use software like Hootsuite to manage your online t-shirt business and social media accounts easier. You can schedule posts, assign team members to manage specific sites, and access all your platforms in one place. In addition, they keep up with the requirements for each platform and update you on developments via a dashboard.

Hubspot CRM also makes managing clients and vendors easier. You can integrate it with almost everything, including emails, invoicing, inventory, and your accounting to make sure that you know what is going on with every client. 

Influencers

Want to know what styles and designs are trending? Follow suppliers, competitors, and influencers to see where communities are heading. Some of the top influencers to follow are:

• Elon Musk: Let’s face it, both Sanford and I think he’s a rockstar. He mixes jokes, insight, and enthusiasm to spread his message. He’s the founder of six companies and the CEO of Tesla and SpaceX. We can all learn from him.
• Screen Printing Blogs: Want a list of 40 blogs focused on t-shirt printing? Check out this one. 
• SEO Influencers: Rand Fishkin, Danny Sullivan,and Neil Patel

Go Forth and Start Your Own T-Shirt Business!

Whether you’re selling online or have a storefront, ask yourself the following questions:

• Do I know how to start an ecommerce store?
• Is it worth it for me to sell online?
• Will I be comfortable speaking to clients?
• Am I starting a clothing line this year?
• Why am I starting a clothing business?
• Do I need employees or advice to get started?
• What will I need to feel successful?

Now that you know how to start a t-shirt business, take the next step. Start your own!

The truth is, all it takes is a great idea, some skills in graphics design, and a good marketing strategy to get started. As Sanford told us:

Once you’ve mastered the art of selling shirts, you can expand to hats, jackets, socks, or anything else that will go well with your collections. Where do you get inspiration for your collection?