Developing a Business Plan for Your Internet T-Shirt Business

Don't rush into cyberspace without a plan that maps precisely where you're headed, and how you'll get there.
Sept 24, 2007

By Josh Ellsworth

The Internet makes it incredibly easy to launch a decorated apparel Web site relatively quickly — maybe a little too quickly. Given how easy it is to do so, it might be tempting to hastily assemble your Internet-based T-shirt business without spending the time to do your homework first. But just like a physical, bricks-and-mortar T-shirt business, successful Web companies also require lots of research, planning and a rock-solid business plan — and that takes time.

Of course, developing a business plan is time well spent, given that it forces you to systematically take a critical, intense look at your proposed company and how it will operate. Without such a plan, for instance, you might have sort of casually assumed that you can charge about $25 per T-shirt because that's what most Internet T-shirt sites charge.

But do they really charge that much? Are the sites charging this price operating in the same market as your business, and are they appealing to the same customer base that your site will reach? Do they charge extra for customization? Should you? For that matter, should you even be establishing a business catering to this particular niche? Are the needs of this niche already met by other businesses? These are the types of issues that you'll be forced to consider as you do your research to assemble a business plan.

Of course, a business plan also is essential if you're seeking financing from a bank or other financial institution, and it can be helpful down the road if you decide to sell your company.

Think of the business plan as a sales tool: First, it sells you on whether the business will work; then it sells a bank on the concept; and finally, it sells possible business partners and employees on the concept.

Digging In
The research required for your business plan comes in two forms: primary and secondary. Primary research means developing your own statistics and information firsthand, while secondary research refers to data that others have already compiled.

Many trade publications do annual surveys about the decorated apparel market, and you may find this secondary research helpful in developing your business plan. For example, a white paper by Impressions editorial director Richard Lebovitz is available as a free download by clicking here.

In developing your business plan, you'll find it immensely helpful to get an understanding of your competition. You can't go to the mall, of course, to see what they're doing; instead, you'll want to use search engines to scope out the landscape. For instance, if you're going to offer sports T-shirts, type the words "sports T-shirts" into a search engine, and see what kind of results you get. Are there hundreds or thousands of sites offering something similar? If so, what can you do differently?

Your business plan also should include a strategy for inventory. You need to decide how much inventory you'll carry, and in what sizes and colors. Will you keep a huge surplus on hand, in anticipation of receiving a flurry of orders, or will you keep a minimal inventory and order from suppliers or decorate as needed?

As you peruse the competition's sites, look at their prices, inventory, and selection. What image are they portraying, and how will your image compare? What types of customer service policies do they have? What's their turnaround time and delivery method? How is their site's architecture organized? Have they received attention from media outlets? Where do they advertise? Dig into their site, and get a full understanding of what they do and how they do it.

You can even find out how much traffic they're attracting by using a toolbar from Alexa, available at alexa.com. While Alexa provides only a rough estimate, not a precise measurement, it will still give you a sense of how much traffic they're getting — in other words, how formidable your competitors are. For instance, use Alexa to see how much traffic flows through industry powerhouse Café Press; you'll be impressed. The Alexa toolbar, which is a free download, also gives information such as a site's owner and contact information.

The Nitty Gritty
Numerous resources on the Web can give you specifics about what your business plan should include. For example, the Small Business Administration suggests that plan’s have the following 10 components.

• Executive summary. This section explains the fun fundamentals of your business plan, such as a definition of your products and customers. It also says what you think the future holds for the business. Although you want to keep it short and sweet, this section is where you're really selling the plan as a whole.

• Market analysis. Explain what the competition does, the market size and potential, etc.

• General company description with a mission statement. While it's somewhat redundant with the executive summary, this section explains the company goals, and its strengths.

• Products and services. Describe the range of offerings your company will provide.

• Pricing. You could roll this into another section, such as "products and services," given that it's likely to be fairly straightforward information.

• Marketing and sales plan. This critical component requires an explanation of the competition, your competitive advantage, your strategy for attacking the market, tools that you'll use to reach customers, and any other information that reveals how you'll sell product.

• Operational plan. Detail your production plan, including how many employees you'll hire, decorating processes, suppliers you expect to use, credit policies, and so on.

• Management or organization chart. List the owners, along with their resumes, and show how their expertise will help the venture.

• Financials. This section details your profit and loss projections, projected cash flow and operating budget, as well as a request for funds.

• Appendix. Cite any sources you've used to compile the plan, such as industry studies.

Be sure to include information specific to Internet-based businesses, such as how you'll use banner ads and search engine optimization to drive traffic, for instance.

A business plan's length varies widely — anywhere from 20 to 50 pages, depending on the information it contains. Regardless of length, keeping it readable by using quick bits instead of endless, droning paragraphs will ensure that your readers absorb the information you provide. Also be thinking about what visuals you can include such as photos, charts, and graphs.

Remember, your business plan is essentially a roadmap to your future success. Spend enough time detailing the map so that you get exactly where you want to be. And given how rapidly the business world is always changing, especially on the Internet, keep the plan updated frequently. Think of it as a work in progress — just like your business.


Quick Hit: Getting Assistance
Good resources to tap as you start working on your business plan include sba.com, entrepreneur.com and bplans.com, which offers sample business plans. Also, check out SCORE, a great source of free information for small businesses. Industry-specific sites that offer a wealth of information include U.S. Screen Print and Inkjet Technology, Specialty Graphic Imaging Association and Impressions magazine.


Josh Ellsworth has been in the garment decoration industry for eight years, working for the past six years as an account representative for Imprintables Warehouse, Masontown, Pa. Ellsworth manages his own blog called Heat Press Yourself.

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