Thinking Of Starting A Sewing Business

[Michael W]

With my girlfriend's urging, I've been kicking around the idea of setting up a sewing shop, i.e. a small, stereotypical 'sweat shop' (though I certainly will have proper and humane working conditions!) with maybe eight sewing machines each operated by a Thai girl whose job is to contribute to fulfilling orders from various clothing manufacturers.

My girlfriend has a far amount of experience doing this kind of work, hence she's very confident about the success of the business with her playing a major, perhaps leading role in the nuts and bolts management -- perhaps even running one of the machines as needs be. To her, about the only variable of any concern is simply finding enough sufficiently skilled and hard workers to keep up with the orders. As the one who'll put up all the money for this venture, my concerns are a bit more wide ranging.

Beyond finding skilled workers -- my girlfriend says she has enough contacts both in Bangkok and back in the surrounding area of her Isaan village to be able to recruit a sufficient number -- there's securing orders, renting a shophouse, and furnishing it. It's the furnishing part, specifically with industrial grade sewing machines, that for now has given me the most pause.

For now, I'm only considering second hand machines. And apparently, according to the stitch work, there are different models you need. Some run between 5000 and 7000 baht, with the advanced ones costing 16000. She tells me I'll need two of these, with the other six (if I'm trying to set up an eight girl shop) being the cheaper models.

I've as yet not done any independent research. I've simply gone on what she's told me and together we visited a shop where a friend of her's works and I tried to get as many of my business questions answered as possible, though the language barrier was rather limiting.

From the numbers I ran, this business has the potential to net at least 75k baht a month without a huge amount of hard work, after the initial startup, on my part. I guess my basic question is does going into such a business sound as reasonable as it does to me, or am I in my naivete and general ignorance missing something obvious?

When I let my paranoid and suspicious mind rear its head I immediately assume it must be a scam. Another case of a bunch of semi-literate Lao Isaan taking the stupid farang for everything they can, in this case 80k baht for a bunch of worthless, broken down sewing machines. Of course I have absolutely no good reason to suspect any such thing -- except for my few blocks of experience in Thailand and the horror stories I've read.

The other aspect of this, of course, are the legal issues. I've only at best taken a cursory look, and this was in another context some time before, but I think I understand that I can't own more than 49% of the business, so I'll have to find some sort of, maybe paper, investors or shareholders. And if I want to be at all active in the running, I certainly can't do this on a tourist visa. But in terms of a business visa and work permit I have no idea if an operation on this scale qualifies, and I have no intention of going around the law if I can at all help it. So I guess I should also look into getting a business lawyer.

Anyway, whatya think? Should I take the plunge or not? Thanks.

[roamer]

I know absolutely nothing about the rag trade. Except that it has a high amount of casualties amongst people who do know a lot about it. For that reason I would decline to invest. Ditto, buffalo farming, garden gnome manufacture, etc, etc.

[xbusman]

I have sewing machines in my company as well as purchase manufactured clothing for customers. While its not my primary business, let me share a few observations I made over the last year or two in the rag market.

While there is still plenty of manufacturing, I think this industry is all moving to China, they are killing us in price. When buying the used the machines for my company, I found some big sewing factories completely closed up and in the process of liquidating. My vendors have told me that "all" the business has moved to china since the dropping of import quotas. Many of the big Thai sewing companies have reopened in Malaysia and Indonesia in an effort to compete with China. I still sew specialty goods of lower volume here but every article I handle of non-leather clothing comes out China, Indonesia is best for leather goods.

Because of this, you should have no trouble finding skilled sewing labor and I found thousands of used machines available for sale. Be very careful with the used machines. Like any piece of commercial equipment, the only reason the business gets rid of it is because its way past its useful life. You cant easily see the massive wear inside the machine, often they drop a new drive motor and foot plate on a machine and call it rebuilt but its amazing how completely worn out the interior mechanism is.

Here is a short training course on buying used machines. Get a JUKI and be very careful you dont get a JUKY, JUKKI or JUKEY all chinese knock offs that look identical and are half the price. In fact, check the serial numbers with JUKI as I found copies that knocked off the name as well. Used machines from commercial operations were all real as best I could tell, copies dont live long in commercial service.

Its a tough business, but remember the number one rule of investing in Thailand. Never put more money on the ground here than you are willing to walk away from. So if your willing to smoke 100,000 baht or so, and you think you have a market, have at it.

[Braccobaldo]

...very simply...you can afford to lose some money?????

...if the answer is YES...do your business...

...and if everything will run good..better for you!!!....otherwise mai pen rai!!!

[mbkudu]

Try to specialise in a niche market. Two people I have known in this trade had their niches. One guy manufactured Muslim clothing, such as gowns and head wear. Most of his customers were from the Middle East and Africa. The other guy had a business in Patunam where he manufactured nothing but big, brightly colored 'moo-moo' dresses for big African women. The women would come in and buy hundreds of kilos of dresses and take them to Africa to re-sell. If I was going to do it, I would do nothing but infant clothing. Baby clothes are big business in the the USA right now. I think if you just think, "Ok, I will sew anything and sell it" is a mistake. Find a niche.

[khall64au]

My girlfriend, my girlfriend, my girlfriend! Just give her the money......

[rishi]

Anyway, whatya think? Should I take the plunge or not?  Thanks.

<{POST_SNAPBACK}>

Unless, you actually have the orderbook full for 8 sewing machines from operation day one, you could consider starting by dipping your toes.

Rent the shophouse, but start up with 2-4 machines and checkout whether your GF actually does have the business & management skills she believes she has. Is it really that easy to pull in orders as she believes?

From the numbers I ran, this business has the potential to net at least 75k baht a month without a huge amount of hard work, after the initial startup, on my part. I guess my basic question is does going into such a business sound as reasonable as it does to me, or am I in my naivete and general ignorance missing something obvious?

<{POST_SNAPBACK}>

Well, you know your calculations much better than I do. However, 75 k/month profit sounds rather optimistic for a business of that kind and at that level investmentwise. It doesn't require a tremendeous amount of skills and education to handle a sewing machine and any about average Thai-family would be able to raise that amount of cash - especially if it would pay off within the first couple of months.

I'm sure, if any new girl on the block could make a profit of 75 k/month, there'd be much fewer bars, restaurants, internetcafees, minimarts, etc - they'd all be replaced by sewing businesses.

I have no particular insight in sewing business, but based on my impression of the general, small scale, business "climate", I'd say: if your GF can make 20 k/month net-profit with a business as described in OP - she/you should consider it a quite successfull business - and consider yourself equipped to move on. I might be wrong, but I'd suggest you have your calculations reality-checked.

[LaoPo]

Anyway, whatya think? Should I take the plunge or not?  Thanks.

<{POST_SNAPBACK}>

NO.

Be wise and concentrate of doing trading instead manufacturing. Go to the Chinese Embassy (or just 'Google') and go to Chinese fashion/garment fairs in the south like Guangdong, together with your girlfriend.

You will learn a lot and will save you a lot of money....probably start earning instead.

success!

LaoPo