This section of the forum is for discussing the business and finance issues of the t-shirt industry. Which business structure to use (sole proprietor, LLC, S Corp, etc), how to handle billing, where to register your business and get the proper licensing, etc.
Every business needs a solid business plan, starting a t-shirt business is no exception. A lot of times, many questions and concerns you may have can be answered by having a solid game plan. To save threads I've decided to post a template that would fit for any practical business endeavors that you may have.
Feel free to use it!
Before we get into the actual business plan, here are 10 KEY QUESTIONS you should ask yourself. If you can't answer all of them, don't even bother with the actual business plan, because you're not ready. Write them down, seriously:
What should you do? In a sentence or a few, describe what your intentions are, what service you are providing or what you intend on selling.
Purpose: This will help you stay focus of what you are and who you are. This is IMO the most important, since how many times do people whether it be potential customers or friends that ask you "what do you do or what does your business do?"
This allows you have in a sense a canned line that can help you market, so when the time comes you don't blank
Who(niche) and why? Write down who your ideal customers are; and be realistic, you're not going to target "everyone". So perhaps you are starting an urban clothing line, your ideal niche are teens and young adults.
Next write down WHY your customers are going to buy from you. i.e. You are providing a much more convenient service, better prices than competitors, etc.
Purpose:
Throughout your business ventures, you'll need to refocus who your target niche is. This will help you decide a variety of things such as pricing, type of products and so on. For example when deciding on prices, you're not going to charge teens 50$ dollars for a tshirt(although some are willing to cough out that much nowadays).
Have you researched your markets? Have you actually spent the time in determining the required costs? Have you actually asked around to see if your potential market exists; or if it will be a flop or be a potential success?
From small businesses to multibillion dollar corporations, EVERYONE spends a large amount of money as well time and effort on this sector. Going into business without doing this is like driving with your eyes closed.
Purpose: The more research you do in your market, the lower the risks. You'll also be able to identify the potential risks and what the competitor is offering. If you get a chance, getting numbers i.e. prices, what people are willing to pay, etc. That will be even more helpful, and don't just try to get estimates, real numbers are obviously better.
How will you get to your potential customers? How will you reach your potential clients? Are they going to find out about you from word of mouth, referrals, internet, etc. This is the part where you must connect the dots from your service/product to your customers.
Purpose: This section is so vital, it should be its own thread, but maybe another day. This is crucial, it doesn't matter how good your service or product is, if you can't get to the customers, you're still empty-handed at the end of the day. This will also allow you to determine additional costs and resources along the ways. i.e. selling on ebay will cost the seller, advertising will also cost you.
Where is your HQ? You must now decide where you are going to conduct business. Perhaps you like to have a home-business, or perhaps you would rather set up a booth, store, etc. Other factors come into play at this point. If you set up a store at a mall, will your product/service appeal to people there? You must also decide what is more financially possible for yourself. Rent isn't cheap, so if your just starting out, this might not be the ideal thing, unless you have a $$$ and you really don't mind.
How much do you have, and how much do you need(finances)? The moment of truth, we all wish we had pots of gold, but quite frankly i don't think we are all the fortunate. Finances are probably your most frustrating yet essential factors that will determine the hit or miss of your venture. this one's a long one so pay attention:
(i)Income statements: What will your costs, sales, profits be in the first three years? Note that i said three years since most businesses fail within the first three years, so make sure you have a set of numbers for each year, in other words you should have at least 6 numbers.
you must be realistic at this point, you're not going to make 100,000 dollars in 2 months, and chances are you'll be scavenging for every penny.
(ii)Do you have enough cheddar: You must determine now whether or not you have enough money to even survive the start-up portion of your venture. Usually people will say that you should have at least twice as much cheddar that you expect to spend on starting up; better safe than sorry.
(iii)Cash-flow: Good job on your first few sales! But do they even cover your costs? Are you racking in enough cheddar to even move out of your starting-up stage? More often than not, most businesses barely make enough to stay alive-constantly hanging on that thread, if that's the case, you're business will never truly grow, bye-bye dreams! Surviving the harsh market is only one part, growing is just as important! You must have a solid idea of how much you're going to make, and whether or not those numbers will allow your move on and expand your business.
(iv)Break-even points: Break even point is the point when you start making money, after paying for all costs and resources. You must now have a solid idea of how to price your products so you're not at a deficit(losing money) and that you're on a profit side.
Where am I going to acquire my raw materials and resources? You must now decide where you are going to get your resources, and trust me, everyone needs to. Where are you getting your shirts from? What if the distributor is gone, do you have a backup? Are the resources going to come on time for me to print all the stuff and deliver it to the client? This should constantly be on your mind. Always have backups btw, you never know what happens.
Can I solo this venture? I know, I know, we ALL want to be the big man/woman and get all the credit, blah blah blah. But let's be realistic, can you actually achieve your goals by just soloing it? At one point or another, you might need to get a loan from someone, at some point in time you're going to need someone else's expertise or help to get you through the rut. Now is the time to think. I'm in no means saying that you can't achieve your venture by yourself and that you MUST get a partner or a few; but sometimes you have to, there can only be so much one person can do.
Next, say you open a store, are you going to have to hire employees, wages, liabilities, etc. those things will start to kick in.
Do I have a solid team? Let's face it, if you truly want to grow your business, at some point in time your going to have to get yourself a team of professionals. All major corporations and multinationals like MacDonald's have lines of lawyers and accountants, advisors and so on. If you are truly serious about your business, you will at one point need their expertise.
Purpose: Let's face it, you can't be an accountant, lawyer, all at the same time, "there is no I in team". You're better off getting professional help. Besides, investors will be more attracted if you have a team that can provide expertise and good advice to drive your venture. Some of you are wondering why you need a lawyer, making a simple tshirt can get you in a whole lotta **** quite frankly. If someone swallows your tag or something, get injured from your packaging, who knows what happens, customers can sue you. I remember reading somewhere that Bic(the pen company) has a line of lawyers ready for anything, apparently every year thousands of adults swallow/choke on pen caps.
What are the risks that are waiting for me? There will always and always be risks, your job is to determine those risks and if possible prevent them or prepare for them.
In the business world, risk is a common word, it's everywhere, everyday, you just have to live with it. i.e. legal disputes, copyright infringement, employee and staff problems, product won't sell, etc.
Once again, you can assess your risks, but it is of course, better to have a team that can help you with it.
Whew, that was one loooooonnnng post, I hope that helps you guys. I know this isn't the business plan, but as I mentioned earlier, if you can't even answer these questions honestly, you're not ready to make a business plan. You should definitely spend lots of time on these questions, since they'll help you throughout your venture from beginning to end. This will solve you hours of head-scratching and swearing, it will save you money.
Anyhow how you enjoyed it, that was four pages on microsoft word! I'll be posting another thread on how to make a business plan soon, as well as other things that might help you along the way in the near future
This is good guidance and you make a lot of sense. Although I've always considered Business Plan writing to be tedious and the very thought of it makes my eyes glaze over - I know it really becomes a tool for efficiency and effectiveness.
I'll get started on it and look forward to your next "chapter".
It's amazing how many people will go into business without having solid answers to questions like the ones you have posed. Thanks a lot for your post, I'm sure many members that are up-and-coming will find it useful.
I have a question and forgive my ignorance please help me understand how one would know what he or she would be making in the next three years?
Thats actually a very good question. For the most part, these numbers are really estimates. There really is no way to predict the exact numbers - and if you could you'd have wall street on its knees.
Most companies hire financial analysis and advisors that can do these estimates for them. But say your on a tight budget or simply don't have time currently. You can run some estimates off you head, of course if you were to pay for a professional, your estimates would be more accurate.
For example, for your first year you would figure out how much you would need to start up your business. You would also factor in other costs, i.e. transportation, employees, legal fees etc.
now you would factor in your estimated sales as well and subtract your costs from your sales. That will give you some numbers for your profits. This is of course a very rough sketch of your finances, but if you only had 5 minutes to do this then that is what you would do roughly.
However, I STRONGLY encourage that you spend lots of time on that, since it is a key factor in determining a business that survives and one that dies. This also determines whether or not your budget will work, and how many sales you must make to break even and actually start profiting.
If you want to run a solid business before you ever even go on to craft out your business plan, you should do a feasbility study.
Where you take your ideas to the people that will purchase them, find out what they would be truly willing to pay for your good or service, find out what your demographic likes about your business idea, what it doesnt like, what you should change, what your real market is and what you really will sell.
hey everyone, i've been receiving quit a bit of pms bout the actual business plan. Lately i've been really busy with work and so on, but it is nonetheless in the works right now. I'll try
to post it up this weekend if possible.
The onyl aspect of the business plan I really need help with or cant seem to figure out is the actual research of my market. How do I get that information? Ive looked all voer online, but come up short. Any ideas?
-MzM
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"Every New Beginning Has To Start With An Idea & A Voice!" Http://WwW.MzMVoice.CoM
Research is a huge sector, companies pay good money for info and statistics.
Whenever in doubt you can check out government websites, since they too, do
research every quarter or year on industries.
The best thing is that they archive most of their findings, so you can actually
take a look, compare, and predict trends in the market.
government websites like those are filled with info on research of various industries, so if
your looking for general statistics and info on say the fashion industry, you can dig deep and find it.
If your just looking to see if your product sells,i.e.... an urban/street clothing line
then you could just ask around on forums blogs et.c, ask your potential customers(teens) skaters,
you get the picture, and get feedback from them. Thats considered research too.
Im currently working on my business plan with the help of SCORE. My biggest hurdle is forecasting sales. I can't grasp how this is done with any kind of accuracy. It seems more like "what are my hopes on the low-end and my sales dreams on the other end..." like wishful thinking.
Can anyone give me an idea of how to use real data to get more concrete numbers??
Hopefully the SCORE resources will reassure or point me in the right direction for help, but until then...
I can only tell you what I did with our business plan. I am no expert in business plans. It's easier to break it down to how many pieces do you think you can do per week or per month. Once you figure out how many pieces you think you can do per month, you can use a moderate growth percentage to forecast out the rest of the year. I used a business plan software to write mine and I think that it gave the option to use an average growth percentage to forecast sales, had I wanted to use it. You could probably do some research on-line about average growth percentages for new businesses. Of course, you can always look at competitors that share your market and analyze the business that they do. You can use that information to help you analyze your own potential business.
I can only tell you what I did with our business plan. I am no expert in business plans. It's easier to break it down to how many pieces do you think you can do per week or per month. Once you figure out how many pieces you think you can do per month, you can use a moderate growth percentage to forecast out the rest of the year. I used a business plan software to write mine and I think that it gave the option to use an average growth percentage to forecast sales, had I wanted to use it. You could probably do some research on-line about average growth percentages for new businesses. Of course, you can always look at competitors that share your market and analyze the business that they do. You can use that information to help you analyze your own potential business.
Great information here! A business plan helps with your efficiency and obtaining goals for your business. Your sales forecast just as Bare explained is an average of what you are capable of producing in a month then adjusted with an annual growth percentage, I find business plans to be very useful good post looking forward to more information here.
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Creativity is your vehicle, profit the destination.
If you want to run a solid business before you ever even go on to craft out your business plan, you should do a feasbility study.
Where you take your ideas to the people that will purchase them, find out what they would be truly willing to pay for your good or service, find out what your demographic likes about your business idea, what it doesnt like, what you should change, what your real market is and what you really will sell.
This is the 1st stage of any real business.
This is a great thread.
Peace2TheRest, when you did a feasibility study and you took your ideas out to the people that would purchase the product weren't you a little nervous that someone would jump on your idea and run with it.
That is the only thing I am worried about with taking the "idea" out into the market place and testing it.
What if someone already capable and set up were to steal my idea?
This is great. I think one of the reasons a lot of creative-based businesses fail is because a lot of creative people don't want to deal with business reality. You hear a lot of "I have no head for figures" or "I just want to paint/draw/write etc" - the real world of hard facts and figures can be a nasty jolt to the dream of doing this full time.
Ideal Generic Business Plan Template 
looking forward to more information here.
