The Kosai region, Sakichi Toyoda's birthplace, was known for its enshu cotton and had a thriving textile industry. Sakichi's mother was a farmer by day, while working as a weaver by night. It is said that this inspired Sakichi to invent a new loom to make the job of weaving easier.

After Sakichi's invention of the power loom, several loom manufacturers established businesses in the Hamamatsu area of Enshu, including Suzuki Loom Works (now Suzuki Motor Corporation), Suzumasa Shokki (later renamed as Enshu Saisaku; now Enshu Ltd.).

Although the Hamamatsu region near Kosai was becoming a center for the weaving industry, Sakichi chose to move to Nagoya as an acquaintance from his hometown, Sakuzo Nozue, who worked in the ironworking industry, lived there. In 1894, Sakichi visited Nozue and asked him to produce iron parts for his looms. The following year in 1895, Nozue manufactured iron loom components, which were assembled at Sakichi's power loom testing plant. The prototype for the power loom was completed in 1896, and after test operation and improvements was ready for practical use. As mentioned earlier, Sakichi acquired a patent for this invention in 1898.