How to Start A Clothing Company

craig — Wed, 18 Nov 2009 13:18:00 +0000

With so many different facets of information and steps needed before you can even print your shirts it’s easy to quit before you even get started.

With all the different, well-documented sites out there, I’ve found that there still hasn’t been anyone who managed to get everything just right, and more importantly, just right on a limited budget. The only thing that comes close is the How to Start a Clothing Line E-Book. If you’d rather not swing the $37 bucks for the e-book we’ve done our best to compress everything you need to know to start your own clothing line here in this blog post. (Disclosure: We get a portion of the sales of the E-Book and recommend it if you need more in depth information.)

Spend only what YOU can afford

We’ve been lucky at Assault to have made all the right moves so far to a point where we have no credit card debt, no binding agreements with any poisonous partners, and no investors to pay back. We’ve started Assault with our own money, and it currently runs itself, independent of outside funding.

One thing to keep in mind during this read is that there are no definite right or wrong ways to forming your own company. In the end, your decisions need to be based on what works best for what you are trying to accomplish. This article is a compilation of what worked (or didn’t) for Assault; as well as some of the complications we ran into.

Before you EVEN start your t-shirt company

What makes you different?
What makes your t-shirts or clothing buzz-worthy?
If you saw your product on a website, would you tell your friends?
Would you pay $$$ for your product?
What separates you from your competition?
Who has been successful with similar products in the past, and what did they do?
Who is your ideal customer? Age? Sex? Interests? Where do they hang out? What do they like to eat?

These are all questions that you should have addressed before you drop a penny into your clothing line.

T-Shirt Printing Equipment

Storenvy Printing and Free Online T-Shirt Stores

Don’t buy any. There are plenty of professionals who are GREAT at screen printing and have been doing it for years. (Exhibit A: Nick Roccanti over @ Storenvy) Your product will suffer if you try to learn to print on your own and you’ll be too busy with other day to day activities to learn to print and fill your orders.

Trying to learn to do it on your own will only make your bank account dwindle.

Akumu Ink

An exception to this would be if you only plan on doing one or two color prints. Akumu Ink does just this, and have been extremely successful at it. For Assault, if we were to do this, one color pressing would have been too constricting for the majority of our designs as they’re oversized and multiple colors.

Online Store Systems

For many of you with limited or no web experience, you are going to have to go with some sort of hosted cart solution like Storenvy. One thing I do recommend is going to a service that will suit your needs and only charge you a flat rate per month. (Or no rate per month–as in free beer… like Storenvy.)

You don’t want a cart system taking a cut of your payments no matter what, because your bank is already doing that on your merchant account. (more on that later.)

Domains are CHEAP! Buy one and forward it

One thing I cannot stress enough with a hosted system is to buy a cheap domain name and forward it to your site. It’s just a bit more professional to have a store with yourname.com instead of yourname.etsy.com or yourname.bigcartel.com.

I never understood why people were okay with that–and why they were willing to put a .etsy.com or .bigcartel.com appended to THEIR brand name on a large banner for an event or festival.

Spend the $8.00 bucks or whatever it is and buy a domain name. That should be one of the first things you do after deciding on a company name.

Sole Proprietorship, Partnerships, Incorporation

This gets confusing and again, there are no right or wrong answers. Because we are talking about starting a company, and on a budget no-less, I’m assuming that you’re a small company. With that assumption, I’d suggest not starting out with a corporation. Corporations have their tax benefits and depending on your growth, are definitely something to look into, but they are fairly complicated to setup. The cost to have a professional setup for you runs approximately $500, but considering the complications that could arise if not done properly, is money well spent.

To start, Assault formed as a partnership. (We have more than one founder) What this meant to us was that the Assault company name was personally held by me (Craig) and Tim. This included any liability, gains, losses, etc. So if Assault made money, as far as the Government is concerned, Tim and I made money. Same goes for if we lost money, if there was any litigation, and so on. Obviously, on a larger scale, this could create some major troubles in ones personal life when their company gets sued for say, copyright infringement, and the lawsuit now bleeds over into their personal assets.

One thing to keep in mind is that you can always incorporate later. At that point, you would need to choose which corporate structure fits best for your business. If you would like more information on this, request it in the comments, and I’ll do a separate post on that in-depth topic.

The alternative to a partnership, or incorporating, is a sole-proprietorship, also known as a DBA, or “doing business as” which is the cheapest solution to starting your company if you are the sole driving force behind your brand.

“Doing Business As” or DBA Certificate

The best way to get a “doing business as” certificate is to place an ad in a local publication with the name of your company and where you will be doing business. This ensures that no one else has the same name as you, and that you are officially on record in public as operating your business.

This is only necessary if you (1) are operating as a Sole Proprietorship or Partnership (ie-not incorporated) or (2) if you have formed a corporation and do not plan to operate as your corporation name. In Chicago, we ran an ad at The Chicago Reader for $100 bucks. They’re used to doing running these types of ads, and they mail you a copy of your ad when it’s done running.

Federal Taxes, State Taxes

You need to register your business with the federal, and the state government you intend to do business in so you can start paying money to Uncle Sam just like the rest of us do with our businesses.

Even if you don’t plan on paying any employees or having any payroll, you still must register with federal to get your Federal Employer ID (FEID). What you register on a state level varies by state, but will be for any state employment taxes as well as state sales tax.

Small Business Checking Account

To get this you have to have the proper documentation. The proper documentation consists of your partnership agreement. (Or incorporation documents) your FEID (federal employer ID), and your local (state) business formation paperwork. You can obtain the FEID from the IRS, and your local state tax registration can be done at your respective state’s government website. (Googling County Clerk +IL is how we found out where to do this cause we’re in IL, duh)

Accepting Credit Cards

This is going to be your one of the essential costs associated with your store. We were lucky enough to get this right the first time.

Paypal has one of the best, and easiest to implement online payment systems. It integrates with plenty of stores already including Storenvy, Magento and Big Cartel–plus it’s very competitive with anything that Authorize.net or Checkout2Payment could offer you.

(Opens in iTunes)

It varies per amount, but for $30.00 per month and a small percentage of every transaction–Paypal’s Website Payments Pro is the way to go. It’s the payment system we started with and it’s worked. If you need to have a terminal on site for street-fairs etc, we recommend using iSwipe Pro on the iPhone. (opens in iTunes) It’s only $.99 cents and easy to setup. Thanks to Judd from Shirt Fight for helping us out with that at our first street festival.

SSL certificate for secure online transactions

If you’re hosting your own store like we are at Assault you’re going to need an SSL Certificate to ensure that your server is encrypted when making credit card transactions.

Back in the day there was only one place to do this: Verisign, and it cost a whopping $300 bucks a year! Thankfully, the great people at GoDaddy started selling their own version of the SSL certificates which works the same way and costs a fraction of the amount. I believe we ended up paying only $17 bucks per year after all was said and done.

Launching your store

You’ve got your shirts designed, bank account setup, and your website is successfully processing credit cards legally and safely. Here’s the most important part about launching your store: making sure you get people there, and the only way to do that is with links!

I Am The Trend - Your Guide For All Things Independent

When we got started, we compiled a list of places that you can post links about your store launch, and have actual people come to the store to buy your products. I Am The Trend will review your shirts live via a ustream video podcast if you send them one. They’ll even pimp your stuff all over their website.

We’ve also recently added a User News section to our website which displays prominently on our homepage and sidebar where you can submit links to us for approval. If you’re launching a store–let us know and we’ll pimp you double hard.

Launching and marketing your new store could be a post of it’s own, and is on it’s way, but in the meantime you can refer to these two posts for some additional SEO and Google tips that will help bring in some organic traffic to your online store:

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