How to Start a Small Business in Textile

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In 2018, the global textile market was worth over $925.3 billion. This ever-growing industry offers a wealth of opportunities for entrepreneurs. Depending on your budget and goals, you can start a small textile business that sells upholstery materials, exotic fabrics, carpets and rugs, apparel fabrics and everything in between. From the pricing to market research to customer service, every detail matters: So make sure you are prepared to take this challenge.

TL;DR (Too Long; Didn't Read)

The first step in starting a small business in textile is to research the industry. Find out what fabrics are in high demand, who your competitors are and what customers expect. Next, write a business plan that describes your vision.

Research the Industry

The first step in starting a small textile business is to research the industry. Textiles are always in high demand, so the competition can be tough. You need to know what types of fabrics bring in the highest revenue, and you need to identify your target audience and your competition. It is also important to stay on top of the latest industry trends and identify any challenges that may arise in the near future.

Did you know that the global production volume of textile fabrics increased from 51,440 million metric tons in 2000 to 98,500 million metric tons in 2017? Did you know that cotton was the most widely used raw material in 2018? Meanwhile silk, wool and other natural fabrics have the highest revenue growth. Research the different types of fabrics and materials, learn about their properties and choose your niche accordingly.

Analyze your competition, too. As a small business owner, you will compete against local and national textile companies. If you decide to sell and market your products online, you will also face competition from top industry players with popular brand names and big advertising budgets. Some of these companies are located in India, China, Vietnam and other countries with low production prices, which gives them a competitive advantage.

Choose Your Niche

As a small textile business, you can specialize in one type of fabric or provide your clients with various options. Check the industry trends to see what is in high demand. Also, consider your audience and its needs. Brainstorm textile business ideas and decide what types of fabrics you are going to sell.

Organic cotton, for example, is popular among sustainable brands. As the number of customers seeking natural, chemical-free fiber clothing and home products increases, so does the demand for this material. In fact, organic cotton production increased 10% from 2016 to 2017, according to the Organic Trade Association. More than half of manufacturers operate in India.

Assess Your Options

Depending on your goals, you can specialize in natural fibers like silk, linen or wool or synthetic fibers such as rayon, nylon, polyester and lycra. Each type of fabric has unique characteristics and uses. Polyurethane laminate, for instance, is breathable and waterproof, making it ideal for outdoor apparel, raincoats and sportswear.

Tightly woven fabrics are used in the manufacturing of jackets, ski wear, tents, hats, protective clothing and other waterproof products. Cotton, portobello canvas, woven canvas and chenille are known as ticking fabrics and make a great choice for bedding, cushion covers and other home products. These materials are strong, durable, easy to clean and resistant to wear and tear. Additionally, they feel comfortable on the skin.

A small textile business that specializes in ticking fabrics can team up with local home designers and companies that manufacture home products. Over time, it can expand its services and start selling sewing machines and supplies, yarns, patterns and more.

Draft a Business Plan

Next, write a business plan for your textile company. This document will guide your efforts and define your goals. It might even help you secure funding by showing investors that your business idea is worth their attention. Ideally, it should include:

  • Executive summary: A brief overview of your textile business plan.

  • Company description: A brief history of your business and information about its legal structure, products, services and goals.

  • Products and services: Describe your product or service, its role in the market and how it benefits customers. Include hard facts, statistics and other insights that back up your statements.

  • Market analysis: Provide detailed information about your industry and target audience as well as a compelling evaluation of your competitors.

  • Execution: Describe how you will bring your vision to life and accomplish your business goals. Include a sales and marketing plan and determine how you will measure the success of your business. Be specific about the costs involved, the number of employees, the operations cycle and other relevant details.

  • Management team: Provide a compelling description of the company's founders and key decision makers, their background and their role.

  • Financial plan: Estimate your expenses and potential income. Determine how much money you will need to launch your small textile business, purchase equipment, hire employees, market your products, expand your operations and so on.

Of course, there are many other aspects that you should cover in a business plan. Also, you must constantly update this document as your needs change. Your business plan can have anywhere between 20 and 100 pages. What matters most is to cover all the key aspects that will contribute to the company's success.

What to Include in Your Textile Business Plan

To put it simply, this document should illustrate your business idea and the strategies required to implement it. It also needs to describe your products or services, what makes them stand out and how they benefit customers. Highlight their strengths and weaknesses, identify potential threats and challenges and describe the markets you will pursue. Also, provide a compelling analysis of your target market, your competitors and the industry as a whole.

Your business plan also needs to include a financial forecast. Determine how you are going to secure funding and reach out to potential investors if necessary. Consider all the costs involved, from rent and transportation to licensing fees, signage, inventory, technology, web hosting and advertising. Remember that you will need business insurance too.

Another important aspect is who will supply the raw materials you need. Include a list of textile suppliers, distributors and local artisans in your business plan.

Legalize Your Business

Now that you have a plan, take the steps needed to legalize your company. First of all, brainstorm textile business names and choose one that reflects your brand identity. Check local and state databases online to see whether or not it is already in use. If your preferred business name is available, register it with the secretary of state.

Next, decide on a business structure. You can opt for a limited liability company, a partnership, a sole proprietorship or a corporation. As your business grows, you may change its legal structure. If you are not sure what to choose, consult an attorney. Apply for an employer identification number (EIN) on the IRS website. Without this unique identifier, you will not be able to open a bank account, pay taxes and obtain business licenses.

Once this step is completed, try to find out what permits and licenses are required for starting a textile business. The rules vary among states, but they are not as strict as those applying to other industries (such as the alcohol or food industry). You will most likely need a seller's license or a general business license, signage permits, building permits and/or zoning permits. Check with the local licensing authority to stay on the safe side.

Promote Your Small Textile Business

Your marketing strategy will depend largely on your target audience. A company that sells directly to customers will advertise its products differently than one appealing to other businesses. In both cases, it is important to set up a website and build an online presence. Also, seek ways to advertise your small textile business in the local community.

Think of your website as a virtual portfolio or business card. Use it to describe your brand, showcase your products and share updates. Set up an online gallery featuring the different types of fabrics in your inventory, their properties and their potential uses. Consider starting a blog and write about each fabric. This will help you increase website traffic and build trust with consumers.

Advertise your business in the local media. Place ads in newspapers, send out press releases and distribute flyers. Offer volume discounts for large orders to increase sales. Another option is to reward loyal customers with exclusive deals and free samples.

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About the Author

Andra Picincu is a digital marketing consultant with over 10 years of experience. She works closely with small businesses and large organizations alike to help them grow and increase brand awareness. She holds a BA in Marketing and International Business and a BA in Psychology. Over the past decade, she has turned her passion for marketing and writing into a successful business with an international audience. Current and former clients include The HOTH, Bisnode Sverige, Nutracelle, CLICK - The Coffee Lover's Protein Drink, InstaCuppa, Marketgoo, GoHarvey, Internet Brands, and more. In her daily life, Ms. Picincu provides digital marketing consulting and copywriting services. Her goal is to help businesses understand and reach their target audience in new, creative ways.