How to start garment business

A business for the creatively inclined, a new clothing line is the perfect option if one has a strong design ethic, artistic expertise and passion for creating a brand. A clothing line may indicate a host of different things such as designing and producing one’s own brand, marketing various designers’ brand under one umbrella or marketing an established brand’s clothing line. However in all three cases, the following steps would be essential to ensure that the clothing line is initiated and maintained smoothly.

Business Plan

A business plan would involve understanding the costs for the initial 5 years, source of funding, competition in the market and drafting a plan to expand the business in the short and long term. Projections with respect to sales would be essential for a business plan as well as the branding strategy.

Target Market

Finding a target customer/ niche area to specialise in is essential to determine the scope in the market. Some options for specialisation could be teen clothing, maternity wear, formal women’s or men’s wear, new born infants, plus size clothing etc. The target market needs to be determined after choosing a niche.

Demographics, buying habits etc. need to be considered while zeroing in on a target. Additionally, material and texture also needs to be considered in sync with the traditions of the target customers and climate of the place. This would help assess demand in the market and ensure the feasibility of operations in the scale that is chosen.

Business Model

A business model would determine the mode of operation. The clothes can either be designed and produced individually or wholesale, or only to retailers/ select outlets. Incase of own line, the option of either having an online store or a traditional brick and mortar store needs to be explored.

Licenses and Permits

The permits and licences specific to the area of operation needs to be secured. The business needs to be registered as a Private Limited Company or a Limited Liability Partnership incase of a partnership between 2 or more individuals. Since the business would involve the sale of products, it is essential that they obtain the VAT-TIN registration from the State Sales Tax Department. Once the business is registered, the VAT-TIN registration can be obtained within a period of 5-10 days. Payment of VAT is mandator incase the turnover exceeds 5 lakh Rupees.

Any person or undertaking liable to pay Central Excise must obtain a Central Excise Registration. The Central Excise Registration number is a fifteen digit number in which the 1st ten digits are the PAN Number, the next two digits correspond with the applicant status and the last three digits denote the number of premises. Please note if your turnover doesn’t exceed 1.5 cr then not required.

Incase the business would involve setting up an establishment/ shop, the the shop and establishment act licence would be required to be obtained from the respective state government. The local Department of Labor officer in the respective state would grant the above mentioned licence.

Contacts

A comprehensive list of merchandisers, boutique owners, distributors, media heads, customers needs to be compiled focusing on the area of operation. This list would be referred to while sending invitations to the exhibitions shows, press releases and even sample books.

Exhibition

Once the look book has been developed detailing the pieces from the collection, a line sheet containing photos of each piece as well as the pricing, material details and size information is to be compiled. This would help conduct an exhibition/ show wherein people from the contact list would be invited as well as general public if need be. This would enable the brand to gain publicity and eventually traction in the form of increased sales.

Portfolio for Marketing

Along the lines of the look book, select pieces of the line could be compiled solely for marketing purposes. This portfolio would be devoid of details such as prices/ sizes as it is solely to attract customers to the line. This portfolio needs to be uploaded on the website and advertised for maximum visibility.

Press Releases and Promotion

Press releases to the buyers, editors and boutiques owners/ potential customers as well as print, television and online media is essential for the promotion of the brand and to update customers regularly. A freelance writer or publicist could assist with the writing and formatting of the press release. An e-commerce platform can help with the promotion of the brand and even industry networks such as apparel associations can help gain the much needed traction in the initial years of running the business.⁠⁠⁠⁠

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