How to Start a Profitable Garment Manufacturing Business

The ready-made garment manufacturing business in today’s world is a multi-billion dollar industry. As a result, the garment manufacturing industry holds immense potential for entrepreneurs looking to enter the world of textile and apparel industry. However, it must be mentioned that establishing a successful garment manufacturing business involves a wide range of factors. It includes creativity, efficiency, and quality together to create clothing that meets market demand. In this comprehensive guide, we will walk you through the process of launching a garment manufacturing business.

12 Steps to Start a Garment Manufacturing Company

1. Select Items For Garment Manufacturing Business

Before actually starting a garment-making business, it is essential to understand the demand and buying trends of the local market. Talk to local buyers and sellers and find out the gaps that can be explored.

Broadly three major categories of products are included in the garment manufacturing business. 1. Woven Garment, 2. Knit Garment and 3. Sweater Garment or woolen garment. Every category has a wide range of products for men, women, or kids. In the woven garment, products are shirts and trousers of formal or casual styles. In Knit garments, products are T-shirts, Polo, etc.

Suggested Read: How to do Market Research

2. Create a Business Plan 

It is important to do elaborate market research prior to and craft a business plan accordingly. Firstly, you need to select the specific product category that you will be making. Narrow your product profile as much as possible. Understand the industry and identify the key factors that are influential in garment-oriented business. Estimate the production requirement and accordingly calculate the fixed capital investment including machinery and workspace cost.

It is advisable to have a detailed project report in hand before initiating the business. Determine your target audience and marketing strategy. Identify and assess your competitors and find out how you will compete with them. Crafting a business plan will help you in arranging the finance and also you will get confidence whether your business is feasible or not.

3. Company Registration and Licenses 

Deciding on the proper business structure under which you are going to operate your business is an important decision to make. Based on your resources you can opt for a business structure like proprietorship, limited liability company, one-person company, private limited company, etc.

Read: How to Register a Company/ Startup in India

A number of licensing and registration regulations are required in the garment manufacturing business. Firstly, you need to register your business. The legal formalities in this business may differ according to your business location. In starting a garment manufacturing business in India, you will need to obtain a trade license from the local authority, a factory license, EPF, ESI, and a fire license.

At present, GST registration is a must. Check this article to learn more about applying for GST registration online. It is recommended to talk to an attorney about the necessity of a specific license in your area.

4. Select a Location

It is critical to find a location for your garment manufacturing unit that is not far from the immediate market. It will not only help you in reducing logistic costs but also sell your items in the local market. Furthermore, choose a location with adequate space for production, storage, and administrative functions.

5. Machinery For Garment Manufacturing

You will need to determine the manufacturing machinery according to your product. There are apparel printing machines, fabric printing machines, t-shirt printing machines, different sewing machines, double-needle bar knitting machines, knit braiding machines, etc. According to your plan select the specific machinery. Check the warranty period and on-site training before furnishing the final order.

Read: Best Small Manufacturing Business Ideas

6. Learn Basic Garment Manufacturing  Process

The first step is to create patterns for each garment’s size and style. Nest is to hire skilled seamstresses and tailors to ensure precise sewing and assembly. It is mandatory to implement rigorous quality checks to maintain consistent product quality.

The basic garment manufacturing steps are given below:

Design/sketch → pattern design → sample making → pattern production → grading → marker making → spreading → cutting → sewing / assembling → inspection → pressing/finishing → final inspection → packing → despatch

7. Raw Materials For Garment Manufacturing

Different types of quality textiles and fabrics are the major raw materials used for garment manufacturing. You will need to procure trims and accessories like buttons, and zippers as per your requirements. Try to establish relationships with reliable fabric suppliers who provide quality materials.

Ensure the quality of the raw material that you are purchasing. Talk to the vendors and purchase the material from reliable suppliers at the right price.

Read: Top GST Software for Small Businesses

8. Create a Sourcing Plan

Garment manufacturing includes the operations of purchasing fabrics and materials from a textile producer, cutting and sewing them to make clothing materials, and then selling them. In establishing a successful garment manufacturing business, you will need to be careful in choosing products, purchasing equipment, establishing your company as a brand, and marketing your products. The better your designs are and the newer your concepts are, the brighter your chances to flourish.

9. Cost of Starting Garment Manufacturing Business

The investment required to start a garment factory depends on the scale of production. However, a production area of 600 Sq. ft and an investment of around 20 lacs is a bare minimum to start a small-scale garment manufacturing unit.

10. Arrange Funds

If you are short on budget, it is essential to arrange funds from banks and lending institutions. Do remember to keep your business plan document ready if you are pitching for funds from investors. This is because all types of investors will ask for your plan document before investing in your company. Also, apply for a credit card to meet small-time business expenses.

11. Hire Manpower

Garment manufacturing is manpower involved business. The most important position is the designer. He or she actually performs the most crucial role in making the venture successful. Hire skilled and experienced manpower only for senior positions.

12. Promote Your Garment Manufacturing Business

Apparel sales are driven by economic conditions, demographic trends, and pricing. The apparel industry is mature and it exists in a dynamic and competitive environment. A brand name is a powerful tool in the promotion of the garment business. Established brand names build consumer loyalty, which translates into repeat business. Choose a memorable, related to your garment name for your business. Establish a wide strong distribution channel network

Creating a website is a must nowadays. Creating an online store along with your website will provide you with an added advantage. Concentrate on creating an online presence. Also, register your business with online B2B directory portals. Public relations activity and press releases are important in the garment manufacturing business.

Frequently Asked Questions

Is the Garment Manufacturing Business Profitable?

As per this report, the global textile market size was valued at USD 1,695.13 billion in 2022. It is expected to grow at a compound annual growth rate (CAGR) of 7.6% in terms of revenue from 2023 to 2030. Hence we easily conclude that the garment business is a profitable industry. However, the success will largely depend on various factors, including market demand, cost management, product quality, and business strategies.

Do I need a background in fashion to start a garment manufacturing business?

Having a background in the fashion industry will surely have certain advantages. However, anyone can start a garment manufacturing business by partnering with experienced designers and pattern makers.

How do I identify the right fabric suppliers?

Research suppliers, ask for samples, and consider factors like quality, pricing, and reliability.

How can I maintain product quality during production?

You must implement strict quality control measures at each stage of production to catch and rectify any issues.

How do I determine garment pricing?

It is essential to consider production costs, overhead expenses, market demand, and competitor pricing to set a competitive yet profitable price.

Is it important to have an online presence for a garment manufacturing business?

Yes, having a website and engaging on social media platforms can help showcase your products, connect with customers, and generate sales.