Start a Garment Business

Garment Business Models

Entrepreneurs can adopt various garment business models. When starting a garment business, it is recommended that entrepreneurs pick one of these areas and then build forward or backward integration as they grow:

Fabric Manufacturing: The garment manufacturing industry is typically capital intensive and requires good infrastructure. Weaving and knitting are the first steps in garment manufacturing, followed by dyeing. Capital, infrastructure, and workforce are all needed for each of these processes.

Fabric Trading: Garment makers purchase different kinds of fabric for making clothes. Depending on the order, the type of fabric and quantity may vary. Therefore, most garment makers would purchase fabric from a fabric trader who aggregates garment makers' demands. Access to working capital funds and good connections with fabric manufacturers is essential for starting a fabric trading business.

Fashion Designers & Garment Making: Fabric must be stitched and made into garments based on various styles once manufactured. Clothing makers and fashion designers play a major role in this industry. Those wishing to become fashion designers must have strong fashion skills, and those wishing to make clothing must be able to complete orders based on the needs of clients or designers.

Fashion & Garment Retailing: During this stage of the garment business, garments are retailed to clients at various locations and through various channels. A network of stores can be used to sell garments online or offline. You can start a garment retailing business either online or offline. Online retailing has many aspects, such as website development, marketing, SEO, and software development. On the other hand, offline retail involves infrastructure management, marketing, and promotion.

Market Research: Before starting a business, it is essential to conduct market research. The entrepreneur must first determine the demand for the product or service they might be offering in the market research. Other factors must be considered before deciding the business's mode, location, and area.

Location of the Business: Location plays an important role in determining success when it comes to offline garment retailing. An entrepreneur must ensure that the location is accessible and has the right target audience.

The following aspects should be considered when selecting a location for a garment business:

Visibility from the road
Having the ability to advertise
Power is available
Shop access
Display space on the floor
Products for storage
Ample parking for shoppers

The Garment Business Start-Up Checklist

To launch your garment business quickly, follow the steps and checklist below:

Business Registrations: When starting a garment business, the first step is to decide on a business name that is catchy and interesting to hear and to ensure the business name is available. Private limited companies and limited liability partnerships are garment businesses' most popular types of entities. The LLP registration is ideal for small companies or fashion designers with an annual turnover of fewer than ₹40 lakhs. All others should form a private limited company.

Bank Account Opening: The incorporation certificate and PAN will be provided once the business is incorporated. Open a business bank account using the two documents.

Trademark Registration: Once the business has been incorporated, register a trademark for its name, logo, and brand. Obtain trademark registration for all brands related to the business in the entity's name rather than your personal name.

Rental Agreement: After the company or LLP is incorporated, enter into a lease agreement with the landlord. You should agree on an LLP or company to ensure limited liability protection and easy transferability.

GST Registration: You must have a GST registration and GSTIN in the name of your business before making payments for interior works and stock. GST input tax credit can reduce your GST liability if you have a GSTIN before making purchases.

Other Registrations: Other registrations for a garment business can be obtained after commencing operations. In the long run, additional registrations and licenses may be required.

PF Registration – When employees reach 20 years of age
Fire license
Fire license
License under the Shops and Establishment Act or Trade License

Investment Options: Most entrepreneurs must invest from their savings, friends, and family members for their first round of funding. Entrepreneurs can also approach local banks for loans if they have a track record or collateral. The promoter will have more debt or equity funding options as the business scales. Entrepreneurs must ensure they have enough funds to pay for a deposit, interior decorations, shelves, clothes hangers, counters, signage, cash registers, point-of-sale systems, hanging stand fixtures, office equipment, computers, shopping bags, and leasehold improvements. Without such cash, the project would be incomplete and result in losses without any revenue.