How to Start Agarbatti Making Business [Incense Sticks Business Plan]

Agarbatti completes all Indian festivities. It is an indispensable part of any pooja.

Apart from religious reasons, incense has a considerably measurable demand among aromatherapy users too. The makers of incense can sell this product to spas, resorts and meditation centres, etc.

Because of the vast demand, Agarbatti-making is quite a profitable business. With limited capital and equipment, you can start small, and with the correct marketing strategy, it can grow in no time.

Main investments

Depending upon the scale chosen, you can start an Agarbatti business even from home. The primary investment heads to kickstart this business include:

• Incense sticks raw material
• Incense sticks machine
• People to manage incense sticks production and distribution
• Warehousing
• Sale and Distribution cost
• A Manufacturing Unit

Incense sticks raw material.

Depending upon the quality and the variety, the incense sticks require raw materials such as:

• Sawdust powder/jiggat powder/charcoal powder
• Adhesive gum or joss/tabu etc. made from litsea glutinosa bark
• White chips
• Perfumes – made from essential oils and masala
• Bamboo stick
• Packing material

For a 1000 incense stick pack containing 10,000 sticks, about 27kgs of all ingredients are required. The incense sticks manufacturers may employ about 2-10 people for the manufacturing process depending upon the operations’ scale and budget.

Incense sticks machine and Equipment

• Wooden planks for rolling
• Weighing balance 10kg capacity
• Aluminum trays
• Heat sealing machine
• Sprayer
• Weighing balance platform
• Plastic buckets, jugs, etc.
• Bag stitching machine
• Packing table
• Containers for mixing ingredients

The total materials and equipment cost for making 10,000 incense sticks is approx. 52,000/-

People

• Skilled and unskilled labour
• Office management staff
• Manufacturing unit supervisor
• Delivery boy

You can expect the salary expenses of approx. Rs. 13,500 for hiring and maintaining 2-3 people to carry out manufacturing and management operations of the Agarbatti business.

Steps involved in Establishing Incense Sticks Business/Agarbatti Business

Incense sticks making is a business relatively easy to set up. Its main steps include:

Step 1: Do the Market Research

Market Research involves enquiring about the types and qualities of incense sticks popular in the market. The business size is determined depending upon the type of incense sticks to manufacturing.

Some noteworthy facts related to the Incense market business are:

• India is one of the leading incense manufacturers in the world.
• There is a considerable demand for importing incense too. Countries like the UK, the USA, Nigeria, Egypt, UAE, and Latin America are among the top importers of incense sticks.
• The incense market is diversified into incense sticks, dhoop cones, dhoop sticks, and perfumed dhoop.
• Consumption-wise, India’s following parts contribute to the demand – South Indian Territory – 32-35%, West India – 28-30%, North India – 15-18%, and East India – 17-25%.

Patanjali, Moksh, Cycle, and Mangaldeep are the top brands ruling the incense sticks market.

Step 2: Prepare the business plan.

Once you have understood the market, you prepare a project report or business plan. The purpose of this report is to tell the financiers how you intend to penetrate the market. Whether it is a home-based business or a small scale one, you include information, the production capacity, the costs involved, the capital appreciation planned, etc., in the business plan.

The important activities done in a business plan are:

1. Determining the space and the unit cost.
2. Furnishing machinery requirements details
3. Chalk out the expenditure on raw material, labour wages, utility bills, etc.
4. Stating the profit estimation and the markets focused.

Step 3: How to get finance for Agarbatti business

Agarbatti making machine is not a very expensive item. Also, the expertise required to make it is minimal. You can either start with the cash in hand or may get the whole project financed.

Be prepared to invest in the raw materials without any returns in mind for at least a year. You can calculate and plan all expenses involved by using the project report.

Besides the raw materials, you can consider investing in the machine using your capital since it is quite affordable.

With all these pre-requisites fixed and a humble start, you can plan out your marketing strategy and think of ways to expand the business. Strategising done right can shift your business from home to a dedicated manufacturing unit in a short period.

Step 4: Register and Procure License for your Agarbatti Business

You can become an authorised Agarbatti, making and selling the business when you have registered your establishment. Start by checking the rules and laws of running Agarbatti business in your region. Registration with ROC is a mandatory procedure.

Other requirements to register the Agarbatti manufacturing and distributing business are:

• One needs to procure a trade license and MSME Udyog Adhaar registration. Businesses can apply for it online.
• GST number to file tax
• For a unit with more than ten employees, familiarise yourself with the ESI and PF Act.
• Procure NOC from the city’s pollution control board authorities.

By the time you have planned the registration, you must have acquired land or space for starting a manufacturing unit. So, the next step is to hit on the plan for setting up a manufacturing base.

The business for making Agarbatti requires planning the space depending upon the production output. A small-scale setup may require 1000 sq. ft of space with ample water and electricity supply.

For the humble start, one can have rental space to bring down the cost.

The other activities to do to set up the manufacturing base are:

1. Prepare the floor plan.
2. Design space with a place for machines
3. Plan the location of finished goods storage
4. Design the packaging section and exit gate point too.

Step 5: Adopt an Agarbatti-making process

To start the Agarbatti-making process, finalise the Agarbatti composition. A typical composition looks like this:

a. White chips: 40%

b. Charcoal: 20%

c. Gigatu: 20%

d. Essential oil and other ingredients: 20%

Train the workers on how to make Agarbatti by following these steps:

a. Choose the fragrance type and then blend the ingredients mentioned above in a given proportion.

b. Moist these with little water to make a paste and roll on a plank manually or with incense sticks, making machine

c. Finally, dip the incense sticks into chosen fragrance’s solution and then pack these in moisture-proof wrappers and paper cardboard’s outer covering.

Step 6: Strategise Agarbatti selling plan.

You can adopt one or a combination of the following selling strategies to create a profitable market for your Agarbatti business:

1. Retail Distribution: Reach to the local market’s retailers and sell the product directly to the shops. You can reach the mall shops, shopping centres, and e-sellers like app owners to penetrate the market.

2. Channel distribution: Partner with distributors of the area to start a secondary sale plan and include retailers to create a correct mix.

3. E-commerce: Be a seller on Amazon, or start an e-commerce venture of yours. An e-commerce developer can provide you with the end-to-end support to start one.

Step 7: Plan marketing and advertising activities

Setting a kiosk, door-to-door sample distribution, search engine advertising, and TV advertising are some of the options you can try to adopt wholesome marketing and advertising plan for your Agarbatti making business.

Also read:

1) How to start Kirana Business?
2) How to start Apparel Manufacturing Business?
3) How to start Artificial Jewellery Business?
4) How to start Bakery Shop Business?
5) How to start Dropshipping Business?
6) Matchbox Manufacturers in India

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FAQs

Q. What is the initial capital required for starting a small-scale Agarbatti business?

Ans. Depending upon the scale, you should have a working capital of about 61.3k per month. It includes machines, people, and unit space.

Q. Can the business of making Agarbattis start from home?

Ans. Yes, if you have about 1000 sq. ft of spare space at the house premise, you can start it from home. Ensure that you have the requisite NOC and safety recommendations in place.

Q. How much workforce is required to make 20,000 packets of Agarbatti having 100 incense sticks each?

Ans. It requires 3-5 skilled workers to complete the order of 20,000 packets.

Q. Can we sell Agarbattis online?

Ans. Yes, you can! There are two options available. First, you can become a seller with platforms like Flipkart, Amazon, etc. Second, you can start your brand’s e-shop.

Q. Is the Agarbatti business profitable?

Ans. Yes, it is quite a profitable business. The recent figures reveal that the Indian Incense Sticks industry brought a whooping revenue of about Rs1000 crore only by exports. Further, there is a sizeable local demand that has fetched about Rs. 7000 crore and the CAGR is expected to be 15%.