Top 5 Mistakes That Can Lead Custom Clothing Manufacturers to Ruin
The Bangladesh clothing manufacturing industry has seen a lot of ups and downs over the past few years. Ever since the Rana Plaza collapse, factories have restructured themselves to be more accountable to their buyers and attain a certain level of compliance.
However, in the process a lot of factories have had to shut down because they were not able to be profitable whilst be compliant.
Starting a clothing manufacturing business is not rocket science but there are some crucial mistakes that a great number of entrepreneurs tend to make before they launch. Whether you’re a customer clothing manufacturer or you cater only to one single retailer, these mistakes can cost one a lot both before and during the initial stages of their business.
To make things simpler, here’s top 5 mistakes that businessmen should avoid steer when starting their own textile/clothing manufacturing business.
Underestimating the Need to Plan and Starting Small
It is needless to say that, planning and organization plays a vital role when commencing a brand new business. This is usually considered as the foundation of any business which is why an in-depth analysis and research of your desired industry should do all the spadework for you.
When it comes to the textile and apparel manufacturing business, you have a wide range of options to choose from. You could be a woven or a knit factory. You can be a spinning mill making the thread or be one of many private label clothing manufacturers in Bangladesh. This usually sends a businessman off-track if it’s not carefully selected at the beginning of a recently developed entrepreneurship.
Hence, it is a good idea to first decide exactly what kind of textile and/or clothing you want to manufacture in your factory.
Besides, a business without planning is like a rudderless ship. You are more likely to get lost in the midst of the industry if you do not have a clear understanding about it.
There is also the matter of starting too big. At first, you think you can get away with being profitable by taking large orders from clothing lines. But, this is where your knowledge and research could fail you. Small productions help you to refine your manufacturing skills and experience.
This doesn’t necessarily mean that your company will stay that way. A little progress each day can give you great results. Start small, and each day work to increase and expand your production capabilities.
Through the process of planning and starting small, you want to ensure that the following KPIs are maintained:
Perfect Order Fulfilment
Exactly how precisely you are able to fulfil a customer’s order. That means whether the order reached the customer on time, with the optimal quality, no product damage, and even all documentations are met.
Percentage of Repeat Orders
The number of repeat orders received from customers, as a ratio of the total orders received.
Percentage of Repeat Orders = (Repeat Orders/Total Orders)*100
A manufacturer must take baby steps in the initial stages of his business since there is no room for mistakes. To refrain yourself from taking risks, you can rent premises or machineries rather than buying it immediately.
Picking the Wrong People
Most entrepreneurs tend to think that they can handle their business all alone and this is where they get stuck. To work out a business successfully, you’re going to need help at some point. The right way to do it is to avoid choosing the wrong people to aid you.
The most important part of a clothing manufacturing business is the factory. So, make certain that your team running the factory is entirely loyal to you and will support you through the ups and downs that your future business might provide you with.
You want to hire people who know how to manage large groups of workers engaged in labor intensive work. You want to also keep an eye out for people who have attention to detail and have experience in the technical side of manufacturing industries.
Use these following KPIs as benchmarks for knowing how your people are functioning:
Measures the efficiency of a particular team member
Efficiency (%) = (Total minute produced by an operator/Total minute attended by him)*100
Daily productivity of the labor force per day
Labor productivity per day hours = (Total production in a day/total labor)*100
If you have little or no idea about this, it is best to take advices from the people who are already in the business and knows the ins and outs of it. However, be careful! Heed the advice of only the ones whom you trust. Relying on the wrong person can force your company to go downhill.
Having the right business partner (if you’re not going for sole proprietorship) is the key to success. Choose someone who has great experience and knowledge when it comes to textile. In addition to that, make sure that your partner can guide you through the challenges of the industry and gives as much effort as you do for your business.
Not Having Enough Capital
To start a successful business, it is essential to have enough capital that will help to run it. A perfect balance between your financial states is what you should opt for. This is what most businessmen fail to do.
Lack of experience can prove to be difficult for many aspects when it comes to starting a business. Detailed budgeting can make the difference between an excellent idea and a ruinous one. This also includes the estimation of your fixed costs along with the variable ones.
Therefore, it is safe to determine a realistic budget within the range of your capability. Having too little capital can cause your business to decline too soon. Without having the necessary equipment that you should have bought as assets in the first place for example, can cause you to lose customers and not properly respond to the demand of your customers
The key here is not to start your business hastily but to slowly build it up to a great one. If you don’t have enough to start your business right now, that is completely fine! Wait until you have the right amount that matches your budgets. There are quite a lot of ways to raise money-
- Ask relatives to invest some money
- Find professional investors
- Do a side job that’ll help you earn money for the business
- Get a loan from bank
Keep an eye out for these KPIs:
Return on Investment
ROI = (Net Income/Money Invested)*100
The proportion of your entire revenue that is profits
Profit Margin = (Net Income/Sales)*100
Not Focusing on the Factory and Machineries
As mentioned above, one of the most important thing in a textile manufacturing entrepreneurship is the factory.
As a supplier, it is your duty to assure your customers good quality products and a well-equipped factory usually acts as a lure for wholesale clothing suppliers, private label clothing lines, and other kinds of fashion retailers.
It is a no-brainer that your factory must have adequate water and electricity supply. A factory with a good location, preferably on the industrial side should give you a few advantages. Besides, look forward to having energy-saving plants and machineries. Not only do they cut down a huge portion of your fixed costs but also help to run your factory efficiently!
Keeping track of the daily work that is being performed by your factory is a fundamental task. Most businessmen aren’t too keen on fault-finding and maintenance of their plants and machineries in the early stages of business.
It is obvious that your workers know more about the machineries than you do. If the operators do find trouble using these, fixing them immediately not only decreases production costs but also prevents product quality from deteriorating without wasting valuable time.
The KPIs to look out for:
Overall electricity bill
Overall utilities bill
Electricity consumption per machine
Utilities consumption per production line
Taking No Account of Quality Control
In my opinion, quality control is one of the major issues in the textile and clothing manufacturing industry these days. Quality issues can’t be totally erased but an aspiring businessman must try to reduce it to such a point so that it doesn’t affect the viability of his business.
A great way to do this is by putting top notch quality assurance capabilities . If you’re low on budget, you might use laborers or opt for developed technologies to get rid of defected products. You can also hire an entire team to manage this aspect. Aside from satisfying your customers, this is something that can guarantee you a blooming business.
Given below are some common defects found in garments these days-
- Skipped stitches
- Dye marks
- Untrimmed threads
- Open seams
- Missing buttons
In addition to that, manufacturers must follow tech-packs provided by the customers in due manner.
However, don’t let the defected pieces go to waste. You can either fix them in appropriate ways or sell them to vendors as scrap material.
KPIs to look out for:
Rework Production Ratio
The percentage of product rework required to deliver an accurate order.
The number of repeat orders received from customers, as a ratio of the total orders received.
Return of Defective Product
The percentage of defective products returned by customers.
Percentage of Approved Samples
The total number of samples approved to samples sent out
Starting your own business requires a lot of time, patience and hard work. By avoiding these 5 common mistakes, you can give yourself the best possible opportunity to become triumphant in the textile manufacturing industry.
If you’re trying to find a Bangladesh clothing factory to source from and want to finally start production, read more in our apparel sourcing checklist. We breakdown the important things you need to tick off during the process of sending in your enquiry, until receiving the actual goods at your destination.