How to Start a Garment Business (a Production Unit)

Have you ever thought of starting a garment business? Starting a garment factory is not a bad idea. There are many fields for starting a business. I am from the garment industry and I can guide you starting the garment business.

If you are interested in starting a garment manufacturing business, go ahead and read this article till the end. Through this article, I will help you out with guides and steps you need to follow starting a garment factory.

When I am talking about how to start a garment factory, it means starting a garment manufacturing plant. It may be a small-scale garment manufacturing unit, FOB manufacturing, CMT manufacturing unit, or subcontracting work for making garments.

Starting garment business

Major steps involved in starting a garment business (garment unit)

  1. Research work on readymade garment business and understand the business process and supply chain
  2. Study the market opportunities
  3. Preparing a project report for the business set-up
  4. Learn about garment manufacturing
  5. Product selection and product category selection
  6. Factory building and factory space
  7. Projected monthly production volume
  8. Estimating Man, machine and material required for making garments
  9. Raising fund through business set-up loan or finding an investor
  10. Customer development 
  11. Set-up the factory
Few pointers for preparing your business plan and starting a garment business are listed in the below sections.

1. Do research on readymade garment business

The readymade garment industry is huge. The garment manufacturing process is a complex one as well. At the initial stage, you should explore the garment business in a wider prospect. Study the whole apparel supply chain. When you will be doing research work find the answer to these questions.
  • How garments are made in the readymade garment industry? 
  • What kind of supplies are required for making garments?
  • How to sell garments 
  • Where to sell your products 
  • How to find customers for the domestic market and export market 
  • Where you will get the workforce for your production plant
  • How much fund is required for setting up your business

Read the FAQs on business set-up asked by many aspirants.

After understanding the apparel business supply chain, you might be interested in other kinds of garment business rather than setting up a manufacturing factory.

To decide what kind of business you should start you are comfortable with, read the manufacturing process, its critical points and benefits over other kinds of garment businesses. Go through some success stories in the manufacturing field.

2. Study the opportunities in the garment business

Study on the business scope in garment manufacturing. I would say the garment manufacturing business is for all those want to do it. Provided you are making quality products and you can sell your garments at a competitive price. The demand for clothing items will be there always, and the purchasing power of the consumers is growing year after year.

Consumers are spending more money on their clothes. They look for trendy and fashionable clothes – which need to be created in every season. With the trendy clothing requirement, the requirement of staple clothes is also there.

You can set-up making completely a new product range. In two years ago many entrepreneurs started their apparel brands and apparel manufacturing in leisure wear (athleisure) and Yoga wear. Also, many entrepreneurs started their business based on organic cotton. You can think of a similar kind of products for your business.

If you want to explore the international market –

The USA, European buyers and high street retailers source their clothing from developing countries including South Asian countries. So, an opportunity is there for you too for starting the export garment manufacturing business. Starting a garment factory involve similar steps for any kind business whether you are intended for domestic manufacturing or export garment manufacturing.

3. Learn about the garment manufacturing industry

If you are a newcomer before you start working on your business plan and preparing project report, explore and learn basic things about garment manufacturing. I mean acquire knowledge about the garment industry. Internet is a good help for exploring the garment industry. But if you don’t know what you should know then internet information can’t help you much. For that, a book on garment manufacturing will be helpful.

Let say, you like to start a Jeans manufacturing factory. So, gather information related denim fabrics, machines required for jean production, fabric suppliers and jean manufacturing process flow and latest jean finishing/washing process. If you are interested in a shirt manufacturing business, look into the process flow of the shirt manufacturing, raw materials requirement and machines to purchase for a shirt factory.

In my blog Online Clothing Study, you will get a lot of information about the garment business process, manufacturing practices, process management and resource requirement.

Project report preparation

After your research work and business opportunity study, when you get confidence in setting up a garment business, prepare one comprehensive project report. A project report must cover the following points 4. to points 8. I have published one project report on setting up Kidswear manufacturing business.  You can refer to this project report for preparing your business project.

4. Selection of garment products and product range

There are many product categories in the clothing line. You should not think of making all kind of products existing in the world. Choose a couple of products for your business. For selecting the right products, do research on a couple of things like - current trends, hot selling products, basic products ranges, staple products.

Make a list of products you like to manufacture. And concentrate on the selected product range to start your dream business.

Let’s say you will be making knits T-shirt and Polo Shirts, or you will be making only leggings and ladies knitted tops. Or you might be thinking of starting a jeans manufacturing unit. Whatever your choice is, you need to finalize it and do your further work based on the selected product.

As you will be manufacturing garment for others, product designing is not necessary for this business. On the other hand, if someone wants to start own label (clothing brand) and a design house with the manufacturing set-up, you need to work on product designing at the initial stage.

5. Find a place for the garment factory

Without factory space, you can’t set up your factory. So, the next step is finding a place and building space for the factory. If you have your own building space, you can utilize that space else take building space on lease or rent. In case, you have own land or ready vacant building, you don’t need to spend money on building a factory or paying lease amount.

One important note – it would be better if you can set up your factory in the industrial zone. By setting up the garment factory in the industrial zone you will get many benefits of sourcing daily supplies. Also, you will get workers and stitching operators easily in the industrial zone.

If you look at the current garment manufacturing industry in India and other Asian countries, there are industrial zones and hubs where small garment businesses are growing up. If you have an opportunity for setting up a factory within such garment business hubs, go for that. You might be already knowing about some garment manufacturing hubs we have in India like Tirupur, Ludhiana, Noida, Delhi, Gurgaon, Bangalore, Kolkata.

6. Estimation of garment production requirement monthly

As you have drawn an outline for the product categories, now you need to plan the daily production volume. I mean, how many garments for the selected products you want to make daily basis. You can say its production will be done based on customer demand (sales forecast). Plan your monthly production requirement accordingly. Let’s say, you want to make 5,000 units of shirt every month in your production plant.

According to your production requirement, you need to purchase a number of machines, arrange manpower, set up factory space/shed for machine and departments and need to set up other equipment. If you are not sure about the monthly production volume, that can be derived from your machine numbers you will purchase. I mean first purchase machine as per your investment plan. Then you can derive monthly production volume for machine resource.

7. Estimation of manpower, machines and material requirement

Prepare a detailed project report covering the requirement of man, variety of machine and list of materials for the products you will be manufacturing. Machine requirement preparation involves understanding different types of machines required for making the desired product and product group. Then estimating number sewing machine, non-sewing machines and equipment required for making the monthly target production volume.

Material requirement calculation involves preparing a list of raw materials (fabrics, trims. accessories) and the volume of each material need to be procured.

Then estimate manpower requirement for directs labours, administrative staffs, supervisors and department heads. For example,

For these requirement estimations, take guidance from an expert.

8. Estimate the investment requirement

Prepare a project report covering the steps 5, 6, and 7.  Once your project report is ready, calculate the factory set-up budget. This is also called a financial report.

To calculate investment amount, include cost of machines and equipment, raw material cost for one cycle of production, workers’ wages and staffs’ salary for 3 months, pre-operative expenses, implementation cost, cost of the space (or rent), include overheads like electricity, print and stationary, expenses on marketing and advertising etc.

The best way of preparing the financial estimation to hire an expert for preparing the project report and investment requirement for the planned project.

Sewing machines are available at the various price range. Depending on your investment capability, you can go for the machine brands that meet your requirement.

9. Raise money for the Project

After preparing the financial report, you will get an idea of how much money you need for setting up the garment factory and running the factory.

Divide the fund requirement into two categories - Initial capital investment amount and factory running cost. Raise fund accordingly. For raising money, you can take business start-up loan from a bank under Govt. scheme. Another way of getting a fund is doing a partnership with someone who likes to invest in your business.

10. Customer development

When you got the idea of setting up the garment manufacturing business, you should start thinking of customers from day one. When you are preparing the business project report and gather information, side by side contact with potential customers, retailers and wholesalers for selling your products. If you are planning doing export orders, contact apparel buying agents and buyers.

Take part in buyer and supplier meet wherever possible. In such events, you will get a chance to meet with many buyers (customers) and you show your designs.

11. Set-up the garment factory

After preparing the project plan and budget estimation, once you are ready with the sufficient fund, start setting up your production plant (factory).

You can follow the below step for setting up a garment production factory.

i. Register your business. It is mandatory for registering your business for many reasons. Register your business and get all applicable business licenses from authorized Govt. body.

ii. Open a current account, PAN and GST registration. These are part of the business start.

iii. Complete the factory shed. After taking a building on rent, complete the building infrastructure. Depending on the floor layout (single floor factory or multi-storied building) you need to look at social compliance for building.

iv. Take Govt. approval for your factory, NOC from the local authority.

v. Prepare a project implementation schedule, so that you can complete your factory set-up on time. This would reduce your pre-operative expenses.

vi. Hire a few key staff before installing machines - The key staff will be utilized in setting up the factory, purchasing machines, finding material suppliers, setting up departments. 

vii. Purchase machines and equipment: As per your project report, purchase machines and equipment from a reliable supplier. Collect machine price quote from few machine supplier. Also, note there and many sewing machine brands.

Here is the list of common sewing machines and other non-sewing machines required for making garments from fabric.

viii. Install machines in the stitching department and set up the other department for processing the garments. For setting up a production line you need furniture, trolleys, centre table, working tables.

ix. Set up different department, office and production line. Complete office infrastructure like an electrical connection for machines. You can set up a sampling room, CAD room, showroom and conference room other than office and production department. How many departments to be set-up depends on the business size.

x. Hire employees and workers - To initiate work hire team members and workers to run your factory. For hiring workforce, you can take help from a manpower supplying agent. Hire HODs for each department.

xi. Training of the workers - Hire employees having work experience in the garment manufacturing field. If training on the job is required, arrange for that.

xii. Set up SOPs for different processes and activities - Setting up standard operating procedures for each process is important for running the business. Each department must be given their job responsibilities.

xiii. Develop garment samples and show it to your prospects - Initially, you can start making garment samples for the designs that will be making. Also by making the garment samples as many as you can, would be helpful for displaying sample in the showroom.

xiv. Get orders (bulk order) - Once you have customer, you will get bulk orders. Be ready for making the bulk orders.

xv. Source raw material (fabric, trim and accessories) - After getting an order, prepare material requirement sheet and procure all the raw materials and accessories.

xvi. Start manufacturing the order: Once the factory is ready for bulk production, bring orders and start manufacturing. You should have some orders in advance so that you can start production as soon as the plant is ready for production.

Conclusion

Many among us at some point in our professional career, we dream of starting a business. It is true that business can give you more earning and status than a day job. But business is not for all. It required a lot of patience, confidence, and dedication.

In business, you need to sell the products that you make. For selling garments you need to do product promotion and active marketing. Serious marketing is necessary.

You need to find various channels for selling your products. The traditional way of selling goods through wholesalers and opening your own store is fine. But you might also think of growing your business in the future.

Nowadays e-commerce business is growing fast in India. The e-commerce sites are open to all for selling their products online. Flipkart, Shop clues, Amazon.in, shop101.com and many other online shopping portals can be used for selling your goods. To know more visit their guidelines.

Another option is building your own e-commerce site and selling your designs online.

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About Prasanta Sarkar

Prasanta Sarkar is the editor and founder of OnlineClothingStudy blog. He is a Textile Engineer and a Master in Fashion Technology from NIFT, New Delhi. He has authored 5+ books in garment manufacturing technology field. Learn more about him and connect with him on Facebook and LinkedIn
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Online Clothing Study: How to Start a Garment Business (a Production Unit)
How to Start a Garment Business (a Production Unit)
Things you need to know in starting a garment business. Small-scale garment production unit set-up guide.
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Online Clothing Study
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