How to Start a Partnership Producing Clothes

Entering into a partnership increases chances of business success.

Starting a business producing clothing requires capital, hard work and business savvy. Entrepreneurs enter into partnerships with those who have complementary skills. For example, if you are talented and skilled at designing and sewing high-quality clothing you might enter into a partnership with someone experienced in the business side of the clothing industry. By working together you increase your chances of success as producers of clothing.

Instructions

1. Write a contract with your business partner. As the editors at AllBusiness.com put it: "A contract serves as a guide and a memorial of the agreement that must be followed by both parties." Sit down with your business partner and discuss at length who will be responsible for what tasks related to the business. For example, it may be your responsibility to design and sew clothing, and your partner's responsibility to apply to art and design shows to sell the clothing to the public. Print two original copies of your contract; each partner must sign and date both copies. Keep one for yourself and give the other to your partner. Agree to revisit the terms of the contract when either of you feels it is necessary to do so.

2. Include an exit plan in your contract. For instance, if either one of you feels the other is not doing her job, you may dissolve the partnership by splitting the funds and removing one name from the business license. Specify who will keep any supplies purchased, such as material and sewing machines.

3. File for your business name with your partner. Perhaps you choose the name, "Country Clothing." Visit your town or city offices and file a form stating that you are doing business together under the DBA: Country Clothing. DBA stands for "doing business as". Most cities require a fee to run a business. Once you and your partner have a DBA, open a business checking account for the DBA. In an equal partnership, both parties will have check-writing rights.

4. Apply for a resale license from your state using your DBA. A resale license gives you and your partner the right to sell items; you must collect sales tax when selling retail. A resale license also gives you the right to purchase supplies such as cloth and thread to make clothing at wholesale prices and without paying sales tax.

Tips & Warnings

• Get to know your partner well before going into business together. Discuss at length what belongs in the contract before signing. Consult a lawyer to go over your contract before making it final.

References

• AllBusiness.com: How to Write Effective Business Contracts
• Wall Street Journal: How to Start a Business Partnership
• Business.gov: Doing Business As