How to Start a Footwear Business in India?
Footwear are trending these days, gone are the days when shoes served only their practical purposes. Today, shoes are worn as an accessory not just by women but men too. There are a variety of shoes available for different occasions, from a wedding to a sports event to a job interview, the list goes on. Since the demand for footwear exists and can continue to rise, starting a shoe business sounds like a good deal. Decide your niche area, whether you want to sell fancy/ party wear shoes or formal shoes, will the target audience be men or women or both, etc. Through this article, we’ll give you an insight into what important points you should consider before starting your footwear business and how you can start a footwear business in India.
Things You Need to Keep in Mind Before Starting a Footwear Business
Online or offline footwear business:
Online business: The biggest advantage of opening an online business is that there are no rental, electricity, or construction and maintenance expenses involved. An online business can be run from your home itself; all you need is a website, and you’re good to go. Your website should be user-friendly and should look neat. Good social media marketing is needed for the success of an online footwear business.
Offline business: The offline footwear business operates in the retail market. Therefore, the first thing you’ll need would be a shop, from where you can sell your products to the customer. This shop should be at least 150 - 200 sq. ft. in area.
Define your target audience:
Defining the target audience helps you to invest your time, money, and energy in the right direction. You cannot be everyone’s favourite, thus, offer your products or services to those that you think would appreciate it. Having said that, as a business owner, you must decide who you want to sell your products to; whether the footwear is to be made specifically for kids, adults, middle-aged people, or for the elderly. You can also categorise your audience according to their sex, income, or any other criterion as per your plan. Hence, instead of beating around the bush, try to keep your plan simple and realistic.
Source of funding:
There are various sources of funding available in the form of business loans, Government grants, friends and family assistance, or your savings. Depending upon your financial health, decide the source of funding you would prefer for starting your business.
Identify your competitors:
Carry out the market research and examine the business model of your competitors. A footwear business is not a new concept, which means that there will be plenty of domestic as well as global rivals. Therefore, it’s important to decide who you want to compete with. If you are manufacturing the shoes for masses, i.e., where people from the lower-income group can also afford to buy that footwear, in that case, your direct competition would be the local retailers.
However, if you want to create a brand and offer your products to higher income groups of the society, you’ll be facing excessive competition from global as well as domestic brands.
Next step would be to visit the rival retail stores to observe their customer base, as these customers will be your target audience. List down the strengthens and weaknesses of these stores, and look for opportunities and threats. Do a SWOT analysis. (SWOT stands for the strengths, weaknesses, opportunities, and threats of your organisation)
Marketplace:
After you’ve researched and worked upon the above-mentioned points, the last thing you need to keep in mind is the location. A location can either make or break your businesses prospects, so think wisely while making location-related decisions. It is advisable to set up your shop near any busy street, such as a supermarket. You can also open your store next to any IT park or any working area, where the crowd is easily visible.
After preparing a blueprint of your business strategy and availing the funding required to start the shoe business, the next step is to get your business registered. Let’s look at how one can register their retail business in India.
Shop Act-License:
This is one of the most vital legal requirements for starting any business, as you can sell your product with this license. This license is also known as Ghumasta or Gumasta license in other parts of India. The registration process for this license can be completed by filling up the Shop-act Form as per the Shop Act of the state where you’ll be setting up your business in and by submitting the following documents -
Application letter to the municipal corporation of your state.
Documents, such as identity proof (PAN, Aadhar, etc.), address proof (electricity bill), proof of the property/ establishment (shop picture) are needed.
Authority letter for business.
Form – A.
GST number:
Every wholesaler and retailer has a GST number. To obtain a GST number, you’ll be required to show a Shop license. Reach out to a CA, who can help you in generating a GST number or you can simply visit www.gst.gov.in. Click on new registration, and a form will appear. Fill the required information in the form. Please note that the location column should include the name of the state where you want to do your business. Next, you’ll be asked to verify the OTP, which will be sent to your mobile number or email address. After completion of this process, a temporary reference number (TRN) will be generated (remember to copy-paste the TRN on your clipboard). Further, you’ll be required to fill in your just generated TRN. Click on proceed and verify the OTP once again.
A dashboard will appear after finishing the process. Your application form and expiry date of the application form will be shown on that dashboard. Fill the accurate information in that application form, and after verifying your e-signature, your application will be submitted successfully.
Current account:
Current account is an account used by business owners. Just like a savings account is used to promote savings and investments, the current account is used to promote businesses. It is a deposit account, which can be opened with any bank to manage your business transactions. The difference between a current and savings account is that you don’t get interest in the former. A minimum balance is required to be maintained under the current account (like, SBI has a minimum requirement of INR 10, 000).
The best part is that unlike a savings account, where there is a set limit for day to day transactions, you can perform unlimited transactions per day under the current account if you are making payments through cheques or online payments. The facility of online banking and overdraft facility up to a pre set limit is available.
Marketing the business:
Once you’ve completed all the legal processes and are now ready to operate your business, the next crucial step is marketing! As already mentioned before, in the footwear business, you are going to face a lot of competition, since it doesn’t fall under a unique business category. Therefore, to get your business going, you’ll need to market your footwear.
The best option would be to opt for digital marketing; upload pictures of your product on Instagram, Facebook, Pinterest, etc., to promote your business. These advertising methods are cost-effective compared to traditional marketing techniques. Set up a footwear page on Instagram, hire some micro-influencers to create a brand image and there you go!
Before starting any business, it’s important to have a well-planned strategy ready so that you can create your services and products according to your target audience as well as choose the best source of the available funding. Starting a business is not rocket science, however, making it capable of growing and creating goodwill is not easy. The competition is extremely high, and those with a proper plan and robust strategy are likely to thrive
