How To Start A Fashion Business

The domestic fashion industry in India is growing backed by strong consumer demand for fashionable clothing through online portals, mall stores and small boutiques. The fashion or clothing stores which used to be unorganized with small businesses is now becoming more organized with the rise of large fashion retail chains. However, the demand still exists for small fashion boutiques due to the availability of certain lines of garment or styles. In this article, we look at the procedure for starting a fashion business in India.

Fashion Industry in India

The Indian fashion industry is one of the largest in the world as it provides clothing - a basic necessity for more than 1.2 billion people. The present domestic textile industry is estimated at US$ 33 billion and unstitched garments comprise US$ 8 billion. Textiles and clothing account for a phenomenal 14% of total industrial production.

Fashion Business Models

A fashion business can be set up under various models. The aspirations, experience and expertise of the promoters must be taken into consideration while deciding on the business model. The following are well-known fashion-related businesses:

Fashion Designing
- Fashion designers design clothes that aesthetically fitting a client or an audience. Fashion designers are usually hired for creating dresses for special occasions.
- Stylists, on the other hand, are that advice about the kind of garment to be worn in different situations.
Fashion Boutique
- Fashion boutiques are small clothing stores selling a unique line of clothing from one or more fashion designers. Fashion boutiques typically cater to a niche audience, while a large clothing retail chain would cater to a wider audience.
Online Fashion Retail
- Ecommerce is booming in India and consumers are becoming used to the idea of buying clothes online. The success of websites like Myntra, Jabong and YepMe are testaments to the success of online fashion retailers. Like fashion boutique thriving amongst the growth of large clothing retail chains, there still exists plenty of opportunity for nice online fashion retail websites.
- In addition to setting up a proprietary website, fashion entrepreneurs can also sell clothing through online portals like Flipkart, Snapdeal, Amazon India, PayTM and more. Know more from the following articles:

Setting up the Business

To start a fashion business, a business entity would have to be the first setup and a bank account must be opened in the name of the business (optional). A person can start a fashion business as a Proprietorship or Partnership or as a Limited Liability Partnership ( LLP) or Company.

Proprietorship is ideal for those starting a fashion designing or stylist business as a part-time job, wherein the annual sales turnover is not going to be more than Rs.10 lakhs in a year. For those wishing to set up a full-fledged fashion business or fashion boutique, an LLP or Private Limited Company would be ideal - as it allows the businesses to more easily scale, take on partners and get capital easily.

Loan or Equity Capital for Fashion Business

The seed capital for almost all businesses come from the promoters, family and friends. Similarly, most of the fashion businesses are funded by the promoters. However, if a significant amount of capital is required for setting up a clothing store then a bank loan can be obtained. Banks can provide term loan for any interior work to be done for the fashion boutique along with working capital financing to fund part of the stocks.

Private equity funding or angel funding is possible for those fashion businesses that can show fast growth, disruption or use of technology as an enabler. Some of the most famous fashion ventures that are private equity funded in India are Myntra, Jabong, Zivame and Yepme.

Tax Registrations

Those involved in the fashion business not selling clothing, i.e., stylists and fashion designers need not obtain GST registration. Those selling clothing in India would, however, require GST registration from the local sales tax office.

To know more about starting a fashion business in India, get in touch with an IndiaFilings Advisor.

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Frequently Asked Questions

Common questions about Starting a Fashion Business in India: Key Steps & Models.

The article outlines three main types of fashion businesses one can start in India: fashion designing, where designers create clothes for clients or specific occasions; fashion boutiques, which are small stores selling unique lines of clothing from one or more designers; and online fashion retail, where entrepreneurs can sell clothes through their own e-commerce website or popular online portals like Flipkart, Snapdeal, Amazon India, and PayTM.

According to the article, the domestic fashion industry in India is growing, backed by strong consumer demand for fashionable clothing through online portals, mall stores, and small boutiques. The Indian fashion industry is one of the largest in the world, providing clothing for over 1.2 billion people. The present domestic textile industry is estimated at US$ 33 billion, with unstitched garments comprising US$ 8 billion.

The article mentions that a person can start a fashion business as a Proprietorship, Partnership, Limited Liability Partnership (LLP), or Private Limited Company. The choice of business structure depends on factors like the scale of the business, the need for external funding, and the potential for growth and expansion.

The article suggests that most fashion businesses are initially funded by the promoters, their family, and friends. However, for those requiring significant capital, options like bank loans, private equity funding, and angel funding are available. Banks can provide term loans for interior work and working capital financing for fashion boutiques.

According to the article, those involved in the fashion business but not selling clothing, such as stylists and fashion designers, do not need to obtain GST registration. However, those selling clothing in India would require GST registration from the local sales tax office.

The article states that in addition to setting up a proprietary website, fashion entrepreneurs can also sell clothing through online portals like Flipkart, Snapdeal, Amazon India, and PayTM. This can help them leverage the existing customer base and infrastructure of these popular e-commerce platforms.

The article suggests that the aspirations, experience, and expertise of the promoters must be taken into consideration while deciding on the business model for a fashion business. Different models, such as fashion designing, fashion boutiques, and online fashion retail, cater to different target audiences and require varying levels of investment and expertise.

The article highlights that the Indian fashion industry is one of the largest in the world, providing clothing – a basic necessity – for more than 1.2 billion people. Textiles and clothing account for a phenomenal 14% of total industrial production in India, emphasizing the industry's importance to the country's economy.

Yes, the article mentions that fashion boutiques typically cater to a niche audience, while large clothing retail chains would cater to a wider audience. This suggests that fashion businesses in India can choose to focus on a specific niche or target market based on their offerings and positioning.

The article states that for those wishing to set up a full-fledged fashion business or fashion boutique, an LLP (Limited Liability Partnership) or Private Limited Company would be ideal. These business structures allow for easier scaling, taking on partners, and obtaining capital more easily, compared to a Proprietorship or Partnership.