Defining a Business Plan for a Textile Industry
The client, a medium sized yarn manufacturing company had planned to set up a B2B E-Hub for the Spinning Industry. Besides yarns, the B2B E-Hub focussed on other areas such as machinery, spare parts, dyes/ chemicals etc used for manufacturingthe yarn. The top management requested UCto assist in the development of a business plan for this venture.
To develop the business plan of the company, UC approached the following steps in two phases:
- Phase 1 (3 weeks) -A detailed study of the textile industry through Interviews/ Discussions with key personnel related to this business or any partners, etc. Background research using the internet, industry reports and other publications was also done
- After an in-depth study of the textiles industry, it was decided that it was too late for the development of a new B2B E-Hub since the space was crowded with 13 B2B E-hubs
However, the client was keen on a B2B E-Hub. Thus UC recommended the client to invest/buyout an existing E-Hub, provided that the space was financially viable
- Phase 2 - Determined the financial viability of a B2B E-Hub talk to existing portals on prospects of acquisition
- E-Hub was found to breakeven after a period of four years
The client received an in-depth financial analysis of the B2B E-Hub. It was determined that a B2B E-Hub in the textile space is not viable since the profits after the fourth year did not justify the investment that would be made.