You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your screenprinting business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a screenprinting business?
It is relatively cheap to open a screen printing business. The specialized printer you need can typically costs $10,000 or less; the supplies you need to start, including many shirts to print on, can typically be obtained for less than $5,000. Such a business can be operated from your home, so there is no need to lease a separate space. Instead, you can spend about $500 to design a professional website, and about $5,000 on traditional advertising, including radio ads, newspaper ads, and a combination of fliers, business cards, and direct mail.
What are the ongoing expenses for a screenprinting business?
The ongoing expenses for this business are variable because you may have to order more materials in some months and fewer materials in other months. Generally, you will spend about two dollars per t-shirt, and about $1.50 per silk screen you create. If you buy pre-made silk screens, they cost about $25 a piece, and ink costs amount to about five cents per shirt. Beyond this—and the need to pay a hundred dollars or less per year to host your website—you don't really have any ongoing expenses, as extra costs such as shipping are billed to the customer directly.
Who is the target market?
While people of all demographics buy screen printed t-shirts, your target market is typically males between the ages of 15 and 25. Such a demographic is more social and enjoys using custom t-shirts to express aspects of their interests and identity to new people that they meet.
How does a screenprinting business make money?
A screen printing business makes money by selling individuals t-shirts and other items of clothing with preset or customized designs on them.
How much can you charge customers?
How much you charge customers varies based on many factors such as t-shirt colors, amount of shirts, and how quickly the customer needs them. For instance, you might charge nine dollars for printing a design on a single color shirt, but if the same customer orders a hundred or more, you may charge them as little as five or six dollars. For someone ordering a shirt with six colors, you'd likely charge between twelve and fourteen dollars for the shirt or as low as eight dollars if they are buying in bulk.
How much profit can a screenprinting business make?
The amount of profit you can make is completely dependent on how many customers and orders you get per year. Some successful screen printers make $100,000 a year or more by amassing large numbers of clients that need to regularly order shirts in bulk. Realistically, your profits will be smaller to start with, although the ability to do this business from home means that you can start it as a second job and build your brand and reputation before making this your sole form of income.
How can you make your business more profitable?
Most of your customers will order from you online, so consider investing in some form of software to help you monitor customer data and email them about your latest products and deals. Try to offer a large variety of clothing options—while every screenprinter sells t-shirts, you may be able to sell things like hoodies and tank tops that the competition simply doesn't have. Finally, keep detailed records of what is selling well and what is not, and use each quarter to refocus your business on giving your customers more of what they want.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your screenprinting business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a screen printing business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
A screen printing business is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a screen printing business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your screen printing business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a screenprinting business
As mentioned earlier, be sure to create a professionally designed website. In addition to traditional newspaper and radio advertising, be sure to advertise on social media—highly visual services such as Instagram provide a natural way to show off your designs. Finally, make personal contact with as many businesses and community groups as you can, as these organizations typically have need to produce custom t-shirts in large quantities.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
In addition to the advertising methods mentioned above, you should hold online contests to build interest. This might include free shirts for people who submit the best new shirt designs, or discounted shirts for those who refer their friends. Also, be sure to pre-make shirts you know will be successful and sell them at local events. From music festivals to comic conventions, any concentrated gathering of people with the same interests represents an opportunity to reach a large audience with your products.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Screenprinting Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
This business is great for artists, giving them a venue to create their own designs and sell them via t-shirts. It is also great for those with strong community ties, as it lets them build long-lasting relationships providing t-shirts for various high school clubs, small businesses, local churches, and other organizations. Finally, it's a good business for savvy social media users as they can leverage these skills to reach diverse audiences of customers online.
What happens during a typical day at a screenprinting business?
The daily activities of a screen printing business are pretty straightforward: much of your time is spent communicating with existing customers, advertising to prospective customers, and finalizing designs for shirts. Beyond this, your time is spent buying and receiving raw materials, printing designs on shirts, and delivering them to your customers.
What are some skills and experiences that will help you build a successful screenprinting business?
Skills in Photoshop and other image manipulation software will be invaluable in starting your business. Similarly, previous experience printing your own t-shirt designs for friends and family is a major help before doing so professionally. Photography experience can also be useful because there are some parallel skills, including working in specialized dark rooms.
What is the growth potential for a screenprinting business?
The growth potential for such a business is modest, with the industry growing nearly two percent between 2011 and 2016. It is worth noting that the increasing popularity of buying custom products online through sites such as Etsy gives you more venues to find customers.
TRUiC's YouTube Channel
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
What are some insider tips for jump starting a screenprinting business?
Try to quickly identify a target market and create a specialty product for that market. Be sure to give yourself ample time to learn how to operate the machinery and develop shirts in short amounts before doing it full time. Finally, don't forget to attach tags to the shirts you sell—this serves as an additional way to build your brand and advertise your products.
How and when to build a team
Because many screen printing businesses are run from people's homes, it is unlikely you will need a team such as a formal retail team. However, you may want to partner with gifted artists in order to offer a greater diversity of designs for your products. If you do so, you should wait until after the first year (at minimum) to ensure there is enough demand to warrant expanding your team and splitting your profits.