Avoiding Pitfalls: A Guide for Indian Handloom Start-ups in Financial and Business Planning


In our previous blog, we discussed about the common mistakes made by Indian handloom start-ups in procurement process. If you missed it, you can catch up by following the link provided at the end of this post. Today, we shift our focus to the financial and business planning aspects, shedding light on prevalent errors and offering potential solutions for aspiring entrepreneurs.

The Retail difficulty:

When embarking on the journey of starting an Indian handloom business, many individuals or groups tend to commence small, often with a retail-focused approach. The allure of a homegrown brand provides a sense of comfort, akin to testing the waters. Unfortunately, a significant number overlook critical aspects such as formal business incorporation, tax registration, maintaining a dedicated business account, and establishing sales channels. Operating primarily through social media platforms like Facebook and Instagram, they initially rely on friends and family as customers, only to find their customer base exhausted after a few months or years, leading to eventual closure.

The B2C Tunnel Vision:

Founders of handloom start-ups often limit their vision to business-to-consumer (B2C) models, seldom considering opportunities beyond traditional Indian handloom attire. The fixation on sarees as the flagship product further narrows their scope, hindering potential growth avenues.

The Untapped B2B Potential:

Amidst the global surge in sustainable fashion, Indian handloom stands as a key player in sustainable textile production. The demand for Indian handloom textiles in the global market is on the rise, making business-to-business (B2B) engagement a golden opportunity for Indian handloom start-ups. Unfortunately, many fail to recognize this potential, limiting their growth.

The Reality of Profitable Retail Brands:

Building a self-sustaining retail brand that generates net profit is a long-term endeavour, often requiring substantial investments in branding, marketing, and sales processes. Bootstrapping start-ups, lacking the necessary funds, face challenges in this competitive landscape. While investors show interest in various start-ups, the Indian handloom and craft sector struggles to attract such funding, leaving founders with limited options such as loans from friends and family or banks.

Solutions for Success:

To navigate the challenges, founders must look beyond social media for market research and consider both B2C and B2B opportunities. B2B can provide a stable financial foundation, while B2C offers great financial margine. With a modest investment, starting a B2B business becomes feasible, allowing for a gradual transition to retail when the time is right.

Furthermore, seeking professional guidance through consultants, financial planners, and marketing experts is crucial. Often, start-up founders neglect the value of external expertise, opting to handle everything alone. Building an in-house team or consulting experts can significantly enhance a start-up’s chances of success.


Starting an Indian handloom business demands a serious and strategic approach. It is not a casual experiment or a mere homegrown endeavour. Just like any other business, it requires careful planning, financial acumen, and a proactive mindset. In the competitive landscape of the handloom industry, recognizing the potential of B2B engagement, avoiding common pitfalls, and seeking professional guidance can set a start-up on the path to sustainable success.

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