Do you want to start an Agarbatti-making business? Find here in this article a business plan guide on how to start an incense stick-making business on a small scale with low capital.
Agarbatti business is one of the most profitable traditional small-scale businesses in Asian countries, especially in India. The name Agarbatti is the Hindi Indian synonym for incense sticks. People use burn Agarbatti for religious occasions and also for aromatherapy, meditation, and yoga. Agarbatti is a consumer product that the demand is found throughout the year and it increases on festive days.
The scope and production of the Agarbatti-making business are based on individual investment capability. One can start this manufacturing business as home-based and can also on a small scale.
Here are the 8 Steps to Start Agarbatti Making Business
Here are some important steps to follow to start a profitable Agarbatti manufacturing business:
1. Understand the Market
It is advised that before starting any manufacturing business, it is mandatory to know more about the demand and trends of the local market. Do market research and collect information regarding the market volume, who are your competitors, pricing, etc. This will help you in exploring the gaps existing in the industry and plan accordingly.
2. Create a Business Plan
In starting Agarbatti making business it is important to craft a business plan. Among the various quality products, decide which type of Agarbatti you will be making. Accordingly, you will need to select machines.
It is recommended to have a business plan in hand before initiating the venture. calculate the startup budget with a fixed capital investment like machinery, plant, etc., and working capital investment including manpower, raw materials, promotional cost, etc.
Determine your business objective and marketing strategy. Creating a detailed business plan will also help you in arranging finance for your venture.
3. Name Your Business
A properly chosen business name goes a long way toward the success of any venture. Craft a catchy memorable name for your Agarbatti company that customers can recall whenever they need to buy incense sticks.
4. Make your Agarbatti Manufacturing Business Legal
Determine the legal pattern of the firm and register your business accordingly. You need to determine what business structure your Agarbatti making business will operate.
If you are planning to start a business in India, some popular business structures are proprietorship, partnership, LLP, and Private Limited Company.
Also, check the licenses and permits required to start manufacturing and market Agarbatti items with the local authority. In India, licenses like Factory License, Trade License, Pollution Certificate, and GST Registration is a must to start the Agarbatti manufacturing business.
5. Selecting Agarbatti Making Machine
As per your business plan select the machinery. Two different types of machines are normally used for Agarbatti making. One is semi-automatic and another is fully automatic.
Normally semi-automatic Agarbatti making machines give an output of 30-35 kg and automatic Agarbatti making machines give an output of 65-70 kg per day. Normally you will be making 150 – 180 sticks per minute out of those machines.
As per your desired length, output and quality choose the right one. Selecting the right machines for your Agarbatti making business is crucial to get success in the business.
6. Raw Material For Agarbatti Making Business
The major raw materials for Agarbatti are bamboo sticks and different powders. Other materials are Charcoal dust, Jigat Powder, Nargis Powder, Wood Incense Powder, Joss Powder, and several essential oils. According to the fragrance, you need to select the right formula.
Pay attention to the packaging. A fragrance lock packaging system is important in Agarbatti making. A decent cardboard box will be needed for packing. You can source the raw material from any wholesale shop or from reliable suppliers.
List of basic raw materials required to make Agarbatti Sticks are the following:
- Bamboo sticks
- Aromatic chemicals
- Essential oils (Sandalwood)
- Gelatin papers
- Jigat Powder
- Joss Powder
- White chips
- Packing materials
- Nargis Powder
7. Cost of Starting Agarbatti Manufacturing Business
The cost will largely depend on the production output. However, on a small scale, one can start the business in India, with an investment as low as Rs. 5 Lacs to Rs. 10 Lacs with a semi-automatic machine. For a larger format with an automatic machine, it can be Rs 50 Lacs to Rs. 1 Crore.
8. Have a Marketing Plan
Talk to local distributors and create a distribution network. To be successful in the Agarbatti business, setting up an effective distribution network is extremely critical. Talk to local retailers and distributors and promote your product.
There is a big market for Agarbatti in the Asian and middle east markets. Do some research and find out what kind of Agarbattis are preferred in those targeted countries. Create a website so that customers can contact you from far-off places.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their business. Our aim is to educate the entrepreneur on the various stages of entrepreneurship.