How to make a financial plan for your T-shirt business? (Pt 6)

Selling T-shirts over the internet is considered to be an inexpensive way of starting a new business. This ultimately means facing stiffer competition when it comes to establishing a successful brand and rigorous planning to ensure your business will stay afloat for many years to come. 


What have we covered so far?

So far in this education series, we highlighted the importance of doing your market research and the steps you need to take in order to make sure that your garments meet the demands of your target customer. To help you there, we walked you through each step with examples from a Christian brand, selling T-shirts to young and faithful girls, who want to show their unique individuality. 


We considered this to be a winning business concept, which is why we researched our niche and competitors to get a clearer view of whether the concept was actually viable and potentially profitable. In the end, we created a customer avatar (Part 4), also known as the ideal buyer persona, which can help businesses fine-tune their marketing campaigns and reach customers more effectively! 


What’s next?

After following our market research plan step by step, you should now have a much clearer grasp of what your market wants and where you stand realistically with your tee business concept! 


In the final part of this series, we are sharing with you the financial model that we apply for several successful T-shirt & design brands. As a new entrepreneur, who is buzzing with new ideas, goals, and sales targets, you may not wish to skip thinking about building a model and making some dreary financial predictions before testing the waters in real-time. You should, however, erase this notion completely and use all the research tips, insights, and projections available to you as the tool main tool to help you achieve your ultimate target: run a successful T-shirt brand.


What are financial models?

Financial models are essentially educated assumptions that are made to project the earnings and spending of a business over a certain period of time. They are used as performance predictors for the future but also as important sources of information, based on which every brand can sculpt their operations strategy every now and then.


These models exist in many different formats, layouts and structures depending on the nature of the business and its specific market demands. In this blog, we will speak about financial modeling only in the context of T-shirt brands and the costs of running one successfully month to month.


Before we continue with the financial modeling templates, we will explain several terms that we find to be highly relevant to the topic. They are useful for understanding the basic modeling principle, which is also applicable to your T-shirt business. 


What’s COGS?

Cost of goods sold or COGS is the product cost that is estimated by the company (manufacturer, distributor, or e-commerce store). This amount includes direct costs: labor and raw materials; and indirect costs such as shipping and sales force.


What’s net profit? 

Net profit is a metric used to obtain the profit value after subtracting all the costs and expenses from the total revenue.  


What are operation costs?

Operation costs are recurring expenses that businesses have to maintain their production, distribution, and sales. They can be weekly, monthly, or yearly based on the type of financial model you want to achieve.  


The main costs in your financial model

When you are making your first steps in the T-shirt business, you want to know how much net profit your T-shirt brand will generate. To make such a prediction, you need to list all your operating expenses required to make and deliver the products VS. the sales projections you make over the same period of time. Profit predictions can be made based on real-life marketing and sales data analytics.


The most sizeable operating costs to run a T-shirt business are the costs of goods, shipping, and advertising. In the beginning, it’s important to consider the advertising costs and how much money your brand is willing to spend on promotions such as Facebook and Instagram ads, or Influencer-driven campaigns. These costs will determine largely what your month-to-month financial plan will look like, and with that, your net profit.  


Other important operating costs a new T-shirt business should definitely keep track of are its Office Supply expenses like packaging, labels, printers, and envelopes – and Taxes/Licenses like sales tax, federal income tax, and Shopify fees. Depending on the state your brand is based and the website you are using for e-commerce, your tax and license fees will vary.




In the beginning, most T-shirt brands use only one or two pairs of hands to run the processes and provide the services offered by the T-shirt business. Until the brand gets traction and becomes more established in its target market, there is often only one person in charge of everything, known as the owner-operator.


Once the brand starts to generate enough profit, you can start to look into the option of outsourcing talent, and services and hiring staff to maintain your operations in your absence. More advanced T-shirt businesses often hire external fulfillment centers, bookkeepers, and ad agencies – so that they can focus on their core functions, expanding the brand’s reach and its entire operations.  




Some of the important costs a new business should also consider are the software subscriptions debiting your business account on a monthly basis. In the list below, we have shared some recommendations about platforms that your T-shirt business can benefit from, at an earlier or later stage of starting your brand. 


If you a looking for an easy and quick way to start your own e-store, you can use Shopify to build your website from scratch. For organizing your finances, you can rely on Quickbooks while for outsourcing talent such as graphic designers, we recommend


On Upwork, you can find everything from web developers, to writers, customer service agents, bookkeepers, marketers, and all sorts of freelancers with different levels of expertise and service fees to match your individual needs. Platforms like can be used by T-shirt brands to send your customers reminders about sales, new stock, and promos as part of your ongoing marketing campaigns. 



At the end of our financial model, we included a list of staff that your business should consider once you progress past the first and second years in the industry. Administrative staff and outsourced services are critical to the operations of T-shirt brands once you start to gain momentum and your net profit meets or exceeds your financial predictions. 



What to do next?

What you can do next is use an excel sheet and start planning your financial costs and sales projections based on the information you learned in your experience so far!

If you have any questions or doubts on the topic of financial modeling for your new T-shirt business, do not hesitate to contact our team for more useful tips and insights.


Thank you for following our Educational Series for PROs! 

More updates and advice from successful businesses in the industry are coming soon…