Starting a very small business.

July 29, 2004 5:56 PM

I am thinking of starting a very small business, but I have a few questions for those of you who have done so before I really make up my mind wheter to go forward or not. [More Inside]
posted by shotsy to work & money (11 comments total)

I'd like to start selling original t-shirts over the web, essentially. My goal is not to get rich, just to get a little extra change and also to get some t-shirts I'd want to wear. Hobby meets Cash. I've looked over some of the previous threads on setting up small business, but none seemed to quite address my questions.

A bit about my plan: Start with small runs, maybe 50 prints each of two designs, see how they sell, then react accordingly.

1) I've looked into the process and there are a lot of custom printers out there, and if anybody has experience in that area, I'd appreciate a reccomendation.

2) Taxes: I don't see myself making all that much money on this venture, but I don't want to play games with Johnny Law, so I am wondering how difficult figuring this stuff out will be. Do I need to officiate myself as a company or anything?

3) Advertising: I'd love to hear the good and bad stories of internet advertising. How does it usually work? I'd obviously target sites that cater to people with similar aesthetic ideals, but I'd love to get a rough (or very rough) estimate for how much I should expect to budget for that sort of thing (though I understand it will vary wildly by site).

4) Any other tips on things I haven't thought of would be appreciated.

I realize I've thrown a lot out there, so please just answer parts if you can. Many thanks.
posted by shotsy at 5:56 PM on July 29, 2004

I'm not a lawyer or an attorney, but I can tell what I was told regarding #3: No, for tax purposes, being an individual or a single member LLC makes pretty much no difference -- you get relevant write offs either way. S-Corps and C-Corps are a different story, but you definitely don't want to go there.

You form an LLC to protect yourself legally (limited liability and all that).
posted by malphigian at 6:07 PM on July 29, 2004

Well, i've done that thru cafepress (they print, ship, etc), and did pretty well (in 99-00)...the hardest part is getting noticed in all the clutter online and off. Maybe try doing it that way first to see if people bite before you lay out your own money?
posted by amberglow at 6:10 PM on July 29, 2004

You can do business without doing setting up any special entities like a corp or LLC. However, check with your local gov't about any licenses they require for your type of industry. And if you use a name other than your own, you'll need to file a D/B/A.

(SCORE is a good resource when you've got startup questions. The franchise tax board can can set you up with the info for sales tax collection/payment. Paul and Sarah Edwards' books are helpful for general small business startup info, hitting a lot of topics you don't initially think of.)
posted by nakedcodemonkey at 7:23 PM on July 29, 2004

If only this were something that could be easily answered in Ask Meta...

There are at least three professionals that can help you do the appropriate planning for your business - an attorney, an accountant, and an insurance agent. Those are the folks that can help you set up the infrastructure of your business. It costs money to talk to folks like this. It can cost you even more not to.

Before you do, there is quite a lot of research that you could do on your own, or with the help of others. Many community colleges offer non-credit classes on starting a small business, and on the handling of some of the tasks that accompany it, and are extremely helpful, including some accounting, some marketing, some advertising, concepts of customer service, and others.

In addition to coming up with a unique selling proposition, a good business plan can help, as well as a marketing plan. The more intelligent planning that you do, the greater the likelihood that you'll have some success.

Something else that you might consider before you go through too much effort is trying to make some sales on eBay.
posted by bragadocchio at 7:39 PM on July 29, 2004

My favorite Marketing Book is Guerilla marketing.

Also, like SCORE, see if the local larger school near you has a business school - they may have an SBDC - A small Business Development Center. Where a bright and eager Grad student gives you recent advice. Take it all with a grain of salt.

Oh, go find your competition. What do they do well? what do they do poorly?
posted by filmgeek at 9:39 PM on July 29, 2004

See also Nolo Press' Working for Yourself.
posted by Zed_Lopez at 12:19 AM on July 30, 2004

I have direct experience in this.

First off, you're welcome to contact me via my profile page with any questions beyond this post. As bragadocchio pointed out, there's more to your question than can be covered in a simple paragraph or two.

But, some basic stuff:

- If you have a credit card that can float a few grand, do the first run yourself, before you go through the trouble of incorporating. Make sure this is something you (a) can handle and (b) want to do again after the first time.

- If/when you incorporate, make friends with an accountant. I can't stress this enough. Taxes are much more complicated for a business than an individual. I have a pretty good head for this kind of thing, and I still managed to mangle some stuff the first year I did it.

- The cost of your shirts will vary in direct proportion to (a) quantity and (b) number of colors in your design. Expect, ballpark, $5 a shirt cost. We typically order 10 dozen of a design at a time, across sizes.

- If you live in a decent-sized city, go local. Buy your shirts direct from a wholesaler. Get them yourself, and take them to a local printer. Work the relationship, and you'll reap lower costs down the road.

- PayPal is cheap and easy for accepting payments. No one will scam you for a t-shirt.

- Find another outlet for your shirts. Talk to local retailers. Our shirts are greared toward gamers, so we go to conventions. We sell more shirts at a busy convention than we sell online in a year.

- Internet advertising, in general, sucks (you're not big enough) and winds up being more money than you want to spend. That said, though, MeFi TexAds have been the one outlet with consistently good ROI for us (thanks, Matt!).

Good luck!
posted by mkultra at 7:29 AM on July 30, 2004 [1 favorite]

Along the lines of what mkultra said: the single most important lesson that I learned from six years of college is: GET A GOOD ACCOUNTANT! It absolutely amazed me how much difference an accountant make -- for better or worse. A good accountant will keep you legal and make you money -- a bad one could cost you your business, your reputation, your money, and possibly even your freedom.
posted by davidmsc at 1:38 PM on July 30, 2004

Thank you all for your suggestions. It is amazing how fast fanciful dreams can turn into the harsh realities of accounting. But I am pretty dedicated to this idea, and I am glad to have this stuff in my head at this early stage.
posted by shotsy at 4:08 PM on July 30, 2004

I'm late to post but... yeah, get an accountant. I use this guy--perhaps he can recommend someone local to you or help you via email.

Also, check out the competition. Threadless.com is the first site that comes to mind (I've bought from them) and Tshirthell.com and unamerican.com are others (never bought from either).

Advertising: yeah, mefi textads are good. Best results I ever got from textads was through the mirror project (mirrorproject.com) but I don't think they do ads anymore. (Most sites gave me a 1% click thru whereas MP gave me 8-15%.)

Another suggestion: come up with a kickass name. You have no idea how many people will check out a URL just to see what the fuck is there. (Over the years I've owned victoryshag.com, makeoutbench.com, elephantshoe.com, fetching.com and many others. Rarely do I ever say the url of any of my sites without people wanting to know what's there.) If you have a good or interesting url, people will click on your text ad for that reason alone. I would also recommend ads in indie print mags like Punk Planet (punkplanet.com). They're cheap and, in my experience, effective.

Books I'd recommend: The Tipping Point and Unleashing the Ideavirus. I'm not a fan of Guerilla Marketing, mentioned above, or any of the books by that author.
posted by dobbs at 11:16 PM on July 30, 2004