Garments Business in India

From the young to old, it is important for everyone about how they look? In the world of fashion, the garments business has created a huge flutter not only in the domestic market but also in the international markets. It is regarded as the most ancient and one of the most profitable businesses in the world. Along with the fondness for quality food, an affinity for the brand of garments has now also become an essential part of a lifestyle where people contribute a significant sum of their income. Fashion trends are rapidly changing. Therefore, we are always in a dilemma on what to buy and what not to buy.  No matter whether you are a niche player or a large branded player, you will be able to make money. 

You can become a millionaire in the garment business if you are doing your market research well and approaching the right model for it. Let us discuss these models in detail:

Models of Garments Business 

For a budding entrepreneur, there are different garment business models available. But it is better to pick one niche and later build on it with forwarding or backward integration, as they scale up:

Fabric Manufacturing

Making the fabric from the scratch is generally capital intensive and demands a good infrastructure. It involves processes like weaving or knitting followed by dying which will actually demand enormous capital, infrastructure, and manpower requirements.

Fabric Trading

For making clothes, various types of fabrics are purchased by the garment makers. But depending on the order of the garment, the purchase varies in type and quantity. Therefore, most garment makers are likely to buy from a fabric trader who aggregates demand for garment makers

Important note:

For those who are planning to start a fabric trading business, it is a must to have good connections with fabric manufacturers and access to working capital funds.

Fashion Designers & Garment Making

Fashion designers and garment makers creativity comes into consideration once the fabric is manufactured and is ready to be stitched and turned into garments.

Those who are willing to start a fashion designing business must have strong fashion knowledge and skills. Those who want to make garments must be efficient enough to execute orders for garments based on the requirement of the client or designer.

Fashion & Garment Retailing

This is the last, but not the least stage in the garment business. In this stage, garments are made available to clients at various locations and through various channels for purchasing. This process is online through online stores, offline in a physical shop, or both.  

Those who are inclined to start a garment retailing business get options to choose between online or offline retailing. Online retailing comprises of various aspects like building a website, marketing through SEO, and software development for better optimization. Whereas Offline retailing would involve infrastructure maintenance, marketing, and promotional activities.

How to do market research?

Before going to start a business, it is essential to conduct market research. Through this process, the entrepreneur is able to first find out the product or service demand that he/she might be dealing with. Other things such as area and location for the business must also be considered. 

Location of the Business

For offline garment retailing, the store location plays a pivotal role in determining the success of the business. An entrepreneur must have the skills to identify the optimum location to achieve maximum reach among the targeted audience. There are many aspects that need to consider while selecting a location for a garment business:

  • Level of visibility from the road
  • Ability to market 
  • Power availability
  • How easily the shop is accessible
  • Ample Space for product display
  • Product Storage capacity and capability
  • Parking area for shoppers

How to start Garments Business?

After confirming the business location, you can follow the below-mentioned steps and checklist to quickly launch your garment business:

  • Business Registrations (1 to 7 Days)

For commencing a garment business, firstly, a business name should be chalked out, something that is creative and catchy enough to grab the attention of the buyer. Then check for the business name availability.  

The most popular kinds of entities for garment businesses include Pvt limited company and Limited Liability Partnership. Moreover, LLP registration is suitable for small businesses or individual fashion designers who will not have a combined annual turnover of greater than Rs.40 lakhs. For businesses crossing this range, a private limited company would be the best choice of business entity.

  • Bank Account Opening (1 to 5 Days) 

As soon as the business is established, the certificate of establishment and PAN would be issued. These two documents can then be used to open a bank account for the business.

  • Trademark Registration (2 to 3 Days)

Once a bank account is opened for the company, the business is incorporated. Then, all you are supposed to do is register the Logo/emblem for the name of the business and the brand. Trademark registration protects your garment business from falling under any illegal infringement proceedings. To obtain this trademark, you have to file an online application and get the trademark registration for all brands related to the business in the name of the entity rather than in your personal name.

  • Rental Agreement (1 to 7 Days)

Get a lease agreement done with the landlord, as soon as the business is incorporated as an LLP or company. It is better if the agreement is done through the LLP or Company to ensure the venture has limited liability protection and is easily transferable.

  • GST Registration (1 to 3 Days)

Make sure to get a GST registration and GSTIN in the name of the business, before making any purchases for interior, stocks, or raw material. The GSTIN can help you avail of GST input tax credit and therefore help you to reduce your tax liability.

  • Other Registrations

Post completion of the initial activities, other registration, and license that would be required for a garment business can be obtained. Following are the registrations and licenses that would be required in the long-term:

  • EPF Registration – When the employee count crosses 20
  • Fire license
  • Shops and Establishment Act license or Trade License

What can be the Source of Investment?

Mostly, own savings are preferred by the entrepreneurs for making the initial investment in the business. But in case there is a shortage in capital amount then they ask their friends and family members for the investment. Also, entrepreneurs can approach local banks to apply for a business loan if they have a track record or collateral property.

In addition, it is mandated for any entrepreneur to make sure that he has enough initial capital amount to make a rental deposit, interior decorations, create shelves, clothes hangers, counters, signage, point-of-sale system, cash registers, office equipment, hanging stand fixtures, computer, shopping bags, and leasehold improvements. If in any case, the funding is not enough before starting, the project would be incomplete and could lead to loss without generating any revenue.

If you are seeking a reliable company that can help you in the procedure of company incorporation and GST registration, trademark registration to make your path of garments business establishment easy and clear then here is the right place for you. Visit our website: LegalRaahi.