Entrepreneurship

Entrepreneurship Business Feasibility submitted in partial fulfilment of the

requirements for the degree of Master of Business Administration

By

Nikhil Kumar

2127617

Under the Guidance of

Prof. Padmavathi Koride

School of Business and Management

CHRIST (DEEMED TO BE UNIVERSITY), BANGALORE
JANUARY 2023
Financial Feasibility
A financial feasibility study evaluates Swell Knit viability based on a key component: will
the project or business have enough cash to complete the project and generate a profit. One of
a company's bottom lines is whether it can sustain itself, pay its employees, and, of course,
make a profit. A financial analysis can aid in this evaluation. Consider the following
elements:
Revenues.
Assets
Liabilities
Fund flow
An economic or financial feasibility study is created for businesses that want to know how
much capital they will need to start and complete a project.

Textile recycling is a capital-intensive business and thus a lot of expenses will be incurred
in order to manage it. The different costs include wages, energy, and cost of equipment’s,
transport, rentals and machinery. An effective financial plan with support the startup
capital requirements and the working capital expenses.

According to the estimates, the startup business is expected to maintain a healthy position
in the next five years. The business will be initially financed by a $100,000 five term loan
and a total capital investment of $100,000. The repayment of the loan will be sourced
from the cash flow generated from operations. The projected financial statements have
been prepared based on reasonable estimates and judgements.
Cost Structure:
Since the industry of recycling textiles requires a lot of capital, managing it will cost a lot of
money. The various expenses include salaries, energy costs, equipment costs, transportation
charges, rental costs, and equipment. The startup capital needs and the working capital costs
will be supported by a robust financial plan.
According to forecasts, the fledgling company is anticipated to maintain a strong position
over the following five years. The company's initial funding sources will be a $100,000 five-
year term loan and a $100,000 capital investment. The cash flow produced by operations will
be used to pay back the loan. The company will have incurred machinery costs, salaries,
working capital requirements, etc.
Revenue Streams:
Cost savings attributable to the use of recyclable material flow- When the company buys
waste from the textile industry, it buys at a very low cost. It costs less, and it helps to earn
more profits.
The company's revenues come from selling yarn and clothes to the manufacturing and selling
finished to the retail shopkeepers.
Diversification in circular products and materials.
Government support such as tax holidays or low tax rates.

Challenges and Risks Involved

Consumer behaviour and education

 Poor consumer demand for recycled textile products, which tend to be perceived
as lower quality
 Consumers’ unawareness that textiles should be recycled and how they can be
disposed of in the most responsible manner

Disposal practices, collection and sorting infrastructure and process

 Collectors focus on “re-wearable” textiles, while neglecting streams of waste that

require more costly recovery solutions
 Lack of mainstreamed, up-scaled processes and know-how to collect and sort
textiles by fiber type
 Low availability of infrastructure on local and regional levels

Recycling technologies

 Lack of commercially viable recycling technologies for low-grade textiles fraction

Lack of mainstreamed, up-scaled processes and know-how to separate fiber types
from the mixed blends and composite structures
 Costly recovery process
 The recycling end-market dominated by low quality materials and blends
 Costly logistics and low availability of textile recycling plants on local and
regional level recycling technologies

6.4 Projected Development Cost

Developing a recycling unit would cost around roughly 35- 75 lakhs

The fully automatic machine cost around 24 lakhs and semi-automatic cost around 14-18
lakhs

6.5 Proprietary issues

The recycling textiles is not common so licensing would one of the major proprietary
issues Developing a brand name would be one of other issues since this business is not so
familiar with the consumers. So, to developing a brand image would be helpful in
increasing the customer base

Market Feasibility

The increasing demand for recycled textile is primarily driven by the rising environmental
concerns towards the detrimental impact of waste incineration, heavy industrial
discharges from textile mills, and depletion of raw materials, such as silk, wool, etc.
Furthermore, the growing production of synthetic and polyester fabrics have led to the
high emission levels of greenhouse gases, thereby fuelling the need for recycled fabrics
on a global level. Apart from this, the growing public awareness towards the importance
of recycling old clothes coupled with the increasing number of collection bins for cloth
sorting, have further propelled the market growth. Additionally, various recycling
companies are launching informative initiatives regarding textile recycling along with
introducing door-to-door pickup programs for old garments. Furthermore, these
companies are also adopting innovative strategies for picking up post-consumer clothing
materials by installing attractive cloth bins in public places such as parking spaces, parks,
shopping malls, walkways, and other high visibility locations. In addition to this, several
technological upgradation supported by the rising penetration of automation in the
recycled textile industry have also catalysed the market growth. For instance, Textile for
Textile (T4T), an eco-innovation initiative by the European Commission, has led to the
introduction of near-infrared (NIR)-spectroscopy technology for performing automated
sorting applications in the recycled textile sector. Moreover, the emergence of eco-clothes
that are made up of recycled textiles, plastics, and other organic raw materials have
helped in waste reduction and resulted in minimal landfill space, and low dependency on
virgin resources, such as cotton and wool. All the above-mentioned factors will continue
to fuel the growth of the global textile recycling market in the coming years. Looking
forward, IMARC Group expects the global textile recycling market to continue its strong
growth during the next five years.
Product and services: Recycled yarn.
The garment wastes are collected from garment manufacturing companies and are sanitized.
These garments are processed and turned into yarn. These yarns are then sold in bulk so that
garments can be produced again.
Target groups - The company is attempting to position itself by purchasing clothing from
clothing manufacturers, turning it into yarn, and selling it directly to clothing manufacturers.
The target audience is made up of a very specialized group called garment producers.
Channels:
Strategic alliances for circular business- In this business, we can build strategic alliances with
the seller of waste material, and after replying to the waste, we can sell them back as raw
material for them. It will create a circular business channel between both the company. This
helps companies to build long-term relationships with each other.