Agarbatti Making Business Plan – How Can I Start My Agarbatti Business?

Agarbatti Making Business Plan: The agarbatti, or incense sticks, making business is one of the most profitable small-scale businesses that has started to boom in recent years. Agarbattis are used not only for traditional purposes, but they are also used in various other places for different purposes, such as aromatherapy, spas, resorts, mosquito repellents, and much more. According to the news sources, agarbattis are widely used in Asian countries and more than 90 countries use them. And India is the only country that manufactures agarbattis, or incense sticks, which means there are ample opportunities to grow in this business.

So you are planning to start with an agarbatti business plan, then look no further. Please read this page to understand how to start the agarbatti business, its project cost, machinery required, raw material list and possibly other things related to the incense sticks business. Scroll down to find out more.

Starting an Agarbatti Making Business Plan

Agarbatti making business plans are quite profitable since they are used in various places for different purposes. So, if you have decided to start the agarbatti making business plan, then here is a detailed step-by-step procedure that covers everything from raw materials, business loans, financing options, and many other things.

How to Start an Agarbatti Manufacturing Business?

Here are the seven detailed steps that will help you start the agarbatti manufacturing business without any difficulty.

1. Creating a Business Plan for Agarbatti Manufacturing

It is extremely important for one to write down the business plan before executing it. Knowing your business plan will help you understand the nature of the business you will carry out and the cost required to start the business. Knowing the cost will help you decide if you need to borrow money from the bank, government subsidies, business loans, term loans, or working capital loans from various financial institutions.

So when you are creating a business plan, make sure to include the following components in it:

• The business’s characteristics, or nature of the business
• Total budget
• Working capital investment
• Equipment, machinery, and the costs associated with them
• Raw materials and finished goods that are required
• A workforce or employees are needed.
• Strategies for Marketing and Advertising
• Loan details (if applicable)
• Work Area or Warehouse to start with business

Make sure you determine the business objective, what kind of incense sticks you will be manufacturing, and how you will promote them.

2. Registering your Agarbatti Manufacturing Business

Now that you have a clear picture of your agarbatti making business, the next step is to execute your business plan. And the first step towards the execution of your business plan is to register your agarbatti manufacturing business. This registration process is extremely important to make your business legal. The owner of the business must register his/her business, which determines the business structure on which the agarbatti manufacturing business will be functioning and operated.

Any individual can register their incense stick making business plan with RoC (Registrar of Companies) under Section 609 of the Company Act as:

• A private limited company
• Public limited company
• Sole proprietorship
• Partnership firm
• Limited liability partnership

3. Submit License Applications

Once you are done with the registration process, you should apply for the necessary license to start the business. The licenses required for starting an agarbatti business will vary from state to state. Thus, it is extremely important for business owners to know the rules and regulations stated by their state government to obtain the license to start with the agarbatti making process. One will have to obtain the following licenses to start with the incense stick manufacturing process:

1. Company Registration Process: The first and foremost step is to register your company with the Registrar of Companies.
2. ESI Registration: If your business involves more than 10 employees, then you will require ESI (Employee State Insurance) registration.
3. EPF Registration: If your agarbatti-making business includes more than 20 employees, then you will have to register under EPF (Employee Provident Fund).
4. GST Registration: GST registration is a must for all business owners since obtaining the GST number is a mandatory step for manufacturing goods and services.
5. Factory License: If you are planning to set up a commercial, large-scale business manufacturing unit, then obtaining a factory license is a must.
6. Pollution Certificate: A pollution certificate is one of the most important certificates that need to be obtained from “The State Pollution Control Board”. When you apply for this certification, the officers will conduct a site survey of your business setup. If they are satisfied with your setup, they will provide you with a licence for the same. This is the mandatory certificate that one must have to start a business.
7. SSI Registration: Even if your business does not fall under the purview of the SSI Registration, obtaining Small Scale Industries recognition is a must.
8. Trade License: The trade license registration process and its validity vary from state to state. All traders and business owners must obtain a trade license in India to conduct any kind of trade.

4. Capital Investment Arrangements

To start the agarbatti business, one can start with a low-to-medium investment and limited raw materials. Thus, the initial investment that one will need to have to start the agarbatti business will range between 10 lakhs and 40 lakhs. And one needs to arrange the capital investment as per their budget. Along with the capital investment, the business owners will require at least 8 to 10 employees in their business, which includes accountants, production managers, semi-skilled labourers, delivery boys, and clerks as per their business scale.

5. Purchasing of Machinery and Equipment

The machinery that is used to make agarbatti will cost somewhere around 1 lakh to 5 lakh rupees. This cost is applicable to the machines that are used in the initial stage of business. Depending on the production, you might need more machinery, which will cost around 10 lakhs to 20 lakhs. Since agarbatti manufacturing machines are very large in size, you will need more space or factory sheds to store and operate the agarbatti making machines. Also, make sure to set this machine up away from the residential areas to avoid complaints regarding pollution.

6. Purchasing Raw Materials Needed for Agarbatti Production

Agarbattis are made from various raw materials that are required to make the agarbattis. These raw materials can be bought from various agarbatti manufacturing units, raw materials suppliers, wholesale markets, and a few other places. However, the main component in making the agarbatti is sticks. These sticks are usually manufactured and imported from various parts of the country. However, if you have stick-making machines, you can manufacture the sticks at your own warehouse.

Some of the raw materials which are required to make the agarbattis are as follows:

• Aromatic chemicals
• Bamboo sticks
• Color powder, which includes Charcol, Crude, Jikit, and Nargis powder, is another ingredient.
• Essential oils (Sandalwood)
• Gelatin papers
• Gigatu packing materials
• Perfumes
• Sawdust
• White chips

7. Selling your Agarbattis

Once you are done with making the agarbattis, you should start selling them to see a profit in your business. Choose holy places such as temples, churches, yoga or meditation centres to sell your agarbattis. Furthermore, you can also sell the agarbattis in various grocery shops, retail stores, and wholesalers. Exporting agarbattis will also help you to fetch more money since there is a huge demand for agarbatti in Asian countries. People who are well versed with digital sales can also sell agarbattis on various e-commerce platforms and online websites.

About Agarbatti Making Business in India

The Indian agarbatti industry is one of the most vibrant cottage businesses in the country, employing over 20 lakh people. In the financial year 2018-19, the Indian agarbatti industry generated a stunning income of close to Rs. 1000 crore by exporting its goods to countries all over the world. “The Agarbatti export industry in India has grown at a 15 percent compound annual growth rate (CAGR) and is predicted to reach Rs. 12,000 crore in the next five years. Meanwhile, with the support of states like Uttar Pradesh, West Bengal, Maharashtra, Tamil Nadu, and Karnataka, India’s domestic industry’s demand for agarbattis has increased to Rs 7,000 crore, “sourced Economic Times.”