Garment business is one of the most profitable businesses in the world. After food, garments and wearables are an essential part of life where people spent a lot of money.
The fashion and trend change every day, which offers excellent scope for both big and small players in the garment industry.
If you are still searching for how to start garment business in India, you will love this post. We will share the checklist for starting a small garment business in India that succeed.
Checklist for Starting A Small Garment Business In India
Choose Garment Business Models
There are various garment business models that you can choose from. It is imperative that choose the business model first and then start building your plan around it.
The following are the business model that you can choose from:
- Fabric Manufacturing: if you wish to start a business in fabric manufacturing, you will require a good amount of capital and excellent infrastructure. The business model includes various processes like weaving, knitting, and dying.
To perform all these processes, there is a requirement of extensive capital, excellent infrastructure, and workforce.
- Garment Designing & Making: after the fabric is manufactured, the next step is to design and stitch, it makes garments of various styles. There is a need for fashion designers and garment makers at this point.
So if you want to get in the garment industry, you can also choose to become a fashion designer or garment maker. For this, you need to have strong fashion skills, and be able to understand and execute the ideas of the client.
- Fabric Trading: all the garment makers require the types of different fabric to manufacture the final product. However, the kind of fabric they require and its quantity depends on the order they get. So, they mostly require a fabric trader who meets their demand.
You can also choose to start a garment trading business. Nevertheless, you need to have good connections with the garment manufacturers for this. Also, you would require adequate working capital as the raw material supplied on credit, and the payment is made after the order is delivered.
- Garment Retail Store: the garments are retailed to the end customers through the retail store. The retail store can be online or offline, or you can sell through your networks as well. If you wish to opt for this business model, you first need to opt between online and offline retail store.
Notably, you can choose for both the options as well, i.e. you can sell online as well as offline. The offline retail store would include good infrastructure, marketing, and promotion. Online promotion would consist of listing yourself on online selling websites, own website development, start a blog, and paid marketing.
Once you have selected the business model, the next step is to register your business with the MCA – Ministry of Corporate Affairs.
Business registration will take somewhere between 1-7 days. First, a business name must be finalised here. And the name must be catchy as well as nice to hear.
You can check the availability of the name on the MCA website. Significantly, most types of garment businesses are Private Limited Company and LLP.
LLP registration is an ideal option for small business owners who have an annual aggregate below Rs. 40 lakhs. Notably, business registration will also make the garment business eligible for various government SME schemes, such as MUDRA loan and CGTMSE.
Bank Account Opening
Once the business is registered, a dedicated bank account should be opened (it will take 1-5 days). The incorporated certificate and PAN card will be provided after business registration which can be used to open a bank account.
A dedicated bank account will help you keep your personal and business finances separate. It is crucial to have separate accounts and not mix the funds when you run a business.
Also, a dedicated bank account will be proved to be helpful in case you need a business loan in future.
A trademark for the business name, its brand, and logo can be registered. The trademark must be registered for the brand-related things, such as the name of the entity and not on a personal name.
If you have created or innovated some new product or business model, you can get its patent registered as well. Notably, if you have registered your business under the MSME, you can avail a subsidy of 50% on patent registration.
If the business place is rented, the company must enter into a lease agreement with the landlords. Entering into the lease agreement on the name of the entity will make the liability limited. Also, it is easily transferable.
Before starting to stock or paying for interior works, it is essential to have a GST number or GSTIN on the name of the entity.
Having a GSTIN number will help in availing all the GST input tax credit and thereby, reduce the tax liability. In addition, also register the other required garment business registrations that are important to commence business-related activities. A few of them can be the following:
- PF (if the number of employees crosses 20)
- Trade license
- Fire license
- Investment options
In addition to all the registrations, the garment business owner can also register his business and products on various aggregator websites and application where all buyers and sellers meet. Through this, he will be able to reach more and more clients and customers.
If you already have a small garment business in India and require additional funds, you can consider availing a small business loan from ZipLoan.
We offer unsecured business loans at easy to meet eligibility criteria and minimal documentation. Our application process is completely online, and we disburse the loan amount in just three days*.