Starting a small leather business in Sri Lanka can be a lucrative venture for foreign entrepreneurs. The country is blessed with several natural resources. Thus, it attracts foreign investment from all over. High economic growth has been achieved by the country. As such, the government now has made it easier than ever to set up your business in Sri Lanka.
One of the popular industries within the fashion and apparel industry is that of leather. With the rise of consumption in Sri Lanka, more consumers now can afford to buy leather products such as footwear and accessories. Moreover, Sri Lanka exports several leather goods such as footwear and accessories. In addition to this, the industry also has a fair domestic demand well.
Are you interested in starting a leather business in Sri Lanka? You will be pleased to know it is a popular business venture. But before starting the process. you may have to ask yourself a few questions first. These are as follows:
What legal structure is your business going to take?
In Sri Lanka, the most common legal structures for businesses to take are the following:
- The limited liability company and
- The sole proprietorship/partnership
The legal entity you take should depend on the scale of your business. Small businesses generally take the sole proprietorship/partnership. On the other hand, medium to large scale enterprises take the structure of a limited liability company.
Who is going to be your target audience?
Whenever starting a new business, it is always best to identify your key consumer base. This is especially important as you will also design your line of products according to this. For example, if you choose to produce high end leather goods, you will probably cater to an older, more mature audience. Conversely, if you produce midrange leather goods you will have a wider range of consumers.
How are you going to source your materials?
Next, in order stock your business, you will need to source your leather. Generally leather business owners import their leather goods as Sri Lanka does not have large scale production of leather. However, with recent advances, there are now 14 tanneries in the country that you may choose to source your leather from.
Some leather businesses will also have to source rubber for certain parts of their products. As Sri Lanka naturally produces rubber, this will not be a heavy burden on the COP.
Deciding whether to source your leather locally or internationally will play a large role in your cost of production. In addition, this will also alter your startup costs.
What is your competition?
When beginning a business in leather, your main competitors will be other leather businesses offering similar products. To compete with them, you will need to establish your own brand identity. Focus on what would set your products apart from theirs. For example, maybe you can focus on a certain aesthetic or a certain type of crafting style.
The other source of competition you will have is from businesses dealing with artificial leather. This is especially so as concerns about animal cruelty in the leather industry rise. To counter this, focus on building a brand reputation of have both quality and consciousness. Moreover, you can choose to source your leather from approved tanneries. As such, you may disclose this information to the consumer.
How are you going to advertise your business?
Possibly one of the most important steps to take for your business is to build a brand reputation.
Once you have drafted a business plan with the previous questions in mind, you may move on to registering your business. Business registrations in Sri Lanka fall under the Registrar of Companies. And for smaller businesses, you may visit the Divisional Secretariat Office in your location. If you are not based in Sri Lanka, you may register online here.
Setting up your leather business in Sri Lanka
Registering a small leather business in Sri Lanka is relatively easy and requires minimal formalities. To register you will have to do the following:
File an application either online or in the Divisional Secretariat Office closest to you.
This will need the following documents:
- A filled in application form.
- An application from the Grama Niladharee to request for a report for the registration of your business name.
Once you obtain the report specified, you may submit it, along with the application form to the Divisional secretary. You will also have to pay all relevant registration fees at this point.
After you obtain your certificate of registration, you will have to display at your place of business.
So now that you have both a business plan AND an official certificate of registration, what is the next step?
Simply put, it is to promote your business. Using an appropriate marketing campaign, you can appeal to your target audience.