How to Start a New Apparel Manufacturing Business?

. 7 min read
How to Start a New Apparel Manufacturing Business?

With about 1.38 billion people and counting, India is a massive market for apparel and garment manufacturing. In 2020, the overall apparel industry of India touched the one trillion mark, thus contributing to a major portion of India's GDP. According to the figures, the demand for garments made in India is not limited to national borders. As other countries/regions have a high demand for garments made in India, India exports approximately 25% of its garments abroad. Despite the fierce competition in the clothing industry in India, the fragmentation of the industry has allowed newcomers to emerge.

The Apparel manufacturing business has various niches under it like a garment manufacturing business, swimwear manufacturing, business wear manufacturing, and many more, so select a specific niche, keeping in mind the demand for the product and the investment you can make into the business.

Why Should You Start an Apparel Manufacturing Business?

The following are the essential reasons for considering starting an apparel manufacturing company, especially in India:

  • The garment industry in India touched the trillion mark recently, clearly stating that demand for ready-made garments and apparel is continuously increasing in India.
  • Compared with previous years, the standard of living in India has improved, so people demand high-quality and fashionable ready-made garments.
  • Clothes are one of the most basic needs of anyone, and with the ever-increasing population of India, the demand for readymade apparel is expected to grow.
  • As a manufacturer, you can target anyone from the population like boys, girls, older audiences, men, etc. So, there are a lot of options and niches to choose from under the garment manufacturing business.

Although the apparel manufacturing business is a fast-growing business, it requires multiple approvals and licenses to start this business. Certain manufacturing machines are required to produce high-quality apparel, and businesses that want to manufacture apparel must follow a specific manufacturing process. This article highlights all the important information and required formalities on 'how to start a clothing manufacturing business.’

How To Start a Garment Manufacturing Unit?

The foremost question that any aspiring garment manufacturer would have in mind is 'how to start a garment factory.’ Starting an apparel business in India requires forming a business plan that should include preliminary market research, certain regulatory approvals, and the special manufacturing machines needed to produce high-quality clothes. The following are the steps needed to start a garment manufacturing business in India:

1. Preliminary research

The garment industry in India is so huge that comprehensive primary research is required to select a specific garment niche and prepare a business plan. It is almost impossible to start a manufacturing business without prior research. Good background research can help the business grab opportunities and detect threats in advance. Preliminary research of garment manufacturing business should include demand for various garments in India, best region to start manufacturing unit, various approvals required to start manufacturing unit, cost of establishing a garment manufacturing business, a list of local garment wholesalers, the capital investment required, and a complete strategy on how to start manufacturing clothes. This background research will help in the future planning of your garment manufacturing business.

2. Determine the brand name and other details

The next step in starting a garment manufacturing unit is to determine the brand name, logo, and quality of raw materials used in the manufacturing unit. Finalise the quality of raw materials, keeping in mind the capital investment and quality used by other garment manufacturers.

3. Find an appropriate location for the manufacturing unit

A garment manufacturing unit requires big space, so look for a spacious location available at a reasonable cost. Also, keep other factors like easy accessibility, availability of raw materials, and mode of transportation in mind while selecting a location for the manufacturing business.

4. Required permissions and approvals

Starting a garment manufacturing business requires various approvals from the state government. These approvals vary in every state, so consult a legal advisor before starting the manufacturing unit. However, the general licenses required to start an apparel manufacturing business include goods and services tax registration, trademark registration, trade licenses, NOC from various government authorities like pollution departments, tax registration, etc.

5. Machines required to make ready-made garments

The type of machine depends on the quality of the apparel manufacturing. The main machines needed to make garments are block printing machines, cloth cutters for cutting clothes in uniform size, sewing machines, machines for the die-cutting process, and manual presses. These machines are required for faster production of apparel and garments in the manufacturing unit, and they also reduce the requirement of hiring excess labour.

6. Various other steps

Apart from the steps mentioned above, various steps depending upon the nature and size of the apparel manufacturing unit like distribution channels, marketing strategies for the business, employee hiring methods, etc.

Now that we know how to start a cloth manufacturing business, let us talk about other important information related to the garment manufacturing business, such as the various raw materials required to manufacture clothes, marketing strategies to sell more, etc.

Raw Materials Required for an Apparel Manufacturing Unit

We have already covered how to start a clothing factory along with various factors that contribute to the success of the manufacturing unit. The most important factor of all is choosing the best quality raw materials, so here is the list of various raw materials required to start a garment manufacturing business:

  • High-quality fabric material to produce garments
  • Stitching machines and material
  • Packaging material to safely transport garments
  • Various inks to put designs on the fabric and for block printing purposes
  • Trims
  • Accessories that will be stitched to the garments

Marketing And Sales Strategies For Garment Manufacturing Business

You need to develop strategies to attract the attention of potential customers and encourage them to buy garments from your unit. A good marketing strategy should convince buyers that your garments and apparels are better than competitors. Select the marketing and sales promotion strategy keeping in mind your business objectives. Following are some marketing techniques that apparel manufacturers usually use:

  • Personal selling: The garment manufacturing units that have just entered the market should choose this marketing method, requiring them to sell directly to distributors, wholesalers, retailers, etc.
  • Sales promotion: This is one of the best promotion methods that hire salespeople to sell apparel and provide customers with special offers to make quick purchases.
  • Advertising: This is an expensive but very effective promotion method because it can widely promote its objectives and products.

These are the basic steps to start a cloth manufacturing unit. Depending on the state government and the size of the unit, additional approvals, permissions and permits may be required. Before starting a garment manufacturing unit, it is recommended to conduct thorough pre-licensing related research to protect yourself from legal pitfalls. Try to establish long-term relationships with wholesalers, retailers, etc., to obtain regular orders.

Also read:

1) Best Tips for Customer Retention for a Small Business
2) Tips to Understand Your Market while Starting a Small Business
3) Tips for Businesses to Overcome the Covid Blues - Revival Tips for Businesses
4) What are the keys to success when operating a small scale business?

5) OkCredit: All you need to know about OkCredit & how it works.

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FAQs

Q. What is the minimum amount of capital investment required to start a small apparel manufacturing business in India?

Ans. Unless it is expected to spread the business in India, opening a garment manufacturing unit does not require a lot of capital. A small manufacturing unit needs a capital investment of about 10 to 15 lakhs. This number increases according to the distribution channels opted and the size of the unit.

Q. What is the average financial performance of a garment manufacturing business?

Ans. A garment manufacturing unit established in a good area, investing about 20 lakhs can easily earn around 60 lakhs per year. Considering the average expenditure incurred by a garment manufacturing business, this business can easily profit approximately 15 lakhs per year.

Q. How to start manufacturing clothes with no money?

Ans. Although it is difficult to start a clothing production line without money, e-commerce and various online platforms have made it possible to start small online stores with minimal investment. The best way to start garment production without money is the direct shipping method and on-demand printing to reduce inventory.

Q. What are the various types of garments manufactured by garment manufacturing businesses?

Ans. Following are the various types of garments that are manufactured by garment manufacturing units:

  • Swimwear
  • Business wear
  • Ready-made garments
  • Traditional garments
  • And formal wear, etc.

Select a specific niche and type that your manufacturing business will manufacture.