Why T-shirts?

So some of you have just read my previous blog entry and are wondering to yourselves, “Why in the world would Erica want to get into the T-shirt printing business?” There are several reasons, detailed below:

1) My biggest concern about my personal finances right now is making sure I don’t have all my eggs in one basket. To that end, I put aside some money this year to invest. (I also have an IRA that is slowly gaining funds, but for obvious reasons, cannot rely on that in a pinch.) In case Simpli goes under at some point (which is about 0.000001% likely, but still possible in some really far-out scenarios), I want to have some money stockpiled somewhere else (preferably in another business or two) so I can survive. I invested in a friend’s business earlier this year, and the T-shirt business is my second investment of 2005.

2) As far as investments are concerned, I can’t argue with $3000 for 50% of a business in which many companies legitimately make several million dollars a year. Okay, so I don’t expect our T-shirt business to be a multi-billion dollar business, but I figure if I can make enough to pay my rent ($1550/month), I’ll be doing pretty well.

3) I don’t want to take too much of a salary from Simpli at this point. Every dollar I don’t take for personal needs is a dollar that can be reinvested in Simpli to make it even more profitable. Plus, Simpli benefits from getting spiffy T-shirts at cost. (Guess what we’ll be giving away as freebies to new customers? Anyone care to guess?) 😉

4) Regarding FK’s comment “saturated/unprofitable” regarding the T-shirt industry (I swear I’m not picking on you, FK, as others have the same question on their mind.) I have two points to make about this: 1) That’s what everyone says about web hosting, too, and Simpli has been a great success there; and 2) we will have a steady customer base of frats and sororities if nothing else. I also plan to target non-profits, as well as print up some T-shirts of my own that I’ve already sketched out. Once we hire labor to do the work instead of doing it ourselves, it will become quite a profitable business. Most companies’ margins are well over 50%. Right now, we’re doing it ourselves to learn it. Soon, we’ll hire someone else to do it for $8-$10 an hour. Then it’ll be a much easier task.

It’s worth noting that the T-shirt business is certainly not an expansion or add-on to Simpli. It’s a wholly separate business, and will have a different corporation name (Twisted Tees is the working name until we file paperwork), different bank accounts, etc. I’ve talked previously about splitting Simpli into two divisions and will add separate blog entries for those two companies once I’m ready to post them on here. 🙂 Twisted Tees is, right now, a weekend/side project for some extra money that could turn into some fairly nice recurring income. We shall see!