How Do I Start My Own Herbal Business?
The global herbal medicine market size was estimated to be approximately $83 billion in 2019 and is expected to grow to a whopping $550 billion by 2030. With the growing popularity and demand of herbal products, as well as the ever-increasing awareness of the effectiveness of herbal remedies, many certified herbalists and those who dabble in herbalism alike are wondering how to turn their passion into a full-blown business. While there are endless avenues to create a successful business, there are several first steps that you should take before launching your own herbal business. This blog will cover these steps and answer your question: “How do I start my own herbal business?”
5 Steps to Start Your Own Herbal Business
Like starting any business, starting your own herbal business requires taking steps to ensure that you have a good idea of not only what you want your business to look like, but also an understanding of the industry you are entering, its specific rules and regulations, and how you can make your products stand out from competing businesses. The following steps give you an idea of what you can and should do to create a successful and flourishing herbal company.
Step 1: Create a Business Plan
Before starting your herbal business, it is crucial to create a business plan. Your business plan is the foundation of your herbal company and provides a roadmap for how to structure, operate and grow your business. Good business plans should include an executive summary or description of your business, products and services you are planning on offering, an analysis of your competitive environment, marketing strategies, financial planning, and a budget. Click here to learn more about what your business plan should include. In the meantime, some questions you should start asking yourself include:
- What is your business name?
- Are you going to make your own products or will you pursue a wholesale/white-label/private-label relationship? What kind of products will you make, wholesale, or white-label?
- If making your own products, what equipment and materials do you need?
- Where will you sell your products? At a storefront? Online? At farmer’s markets?
- What can you do to make your products stand out from your competitors’?
- How will you advertise your products?
- What is your budget?
Step 2: Get Business Certified
In order to sell your herbal products in a retail or online setting, you must do several things to create an officially recognized business, such as:
- Form a legal entity.
- Will your business be a sole proprietorship, partnership, limited liability corporation (LLC) or a corporation?
- Register your business for taxes and receive a sales tax license so you can sell your products.
- Apply for necessary licenses and permits.
- If you decide to make your own products, you must receive a manufacturing license.
- If you want your herbal business to include the manufacturing and selling of hemp or cannabis products, you must receive a hemp or cannabis license.
- Open a bank account for your business.
Not only is necessary to comple this step before selling your herbal products, but it is also important to make sure that you have a good understanding of the rules and regulations of the herbal medicine industry.
Step 3: Know the Legalities
When entering the herbal medicine industry, there are some regulations that you must consider. In 1994, the Dietary Supplement Health and Education Act (DSHEA) was passed to provide the Food and Drug Administration (FDA) authority to govern all manufacturing and dispensing of dietary supplements, including herbal products. Under DSHEA, those who manufacture dietary supplements and herbal products are required to comply with current Good Manufacturing Practices (cGMP)—practices that assure proper design, monitoring and control of manufacturing processes and facilities to ensure the safety and quality of products that are being sold to consumers. Note that the key word here is comply, meaning that your herbal business is responsible for determining that the dietary supplements it manufactures or distributes are safe and that any representations or claims made about them are substantiated by adequate evidence to show that they are not false or misleading. This ultimately means that manufacturers or distributors of herbal products do not need to get their products approved FDA.
Those who do want their herbal products to be approved by the FDA, however, must be cGMP certified. For many start-up businesses, becoming cGMP certified is a big undertaking, as it requires a lot of time, money and expertise to follow these manufacturing practices. That being said, many herbal companies are compliant with the manufacturing practices, but never become certified, and that is completely acceptable! One caveat of not becoming certified, however, is that you must make it clear that your herbal products are not approved by the FDA. Other requirements you should know before selling your herbal products are the labeling requirements. Click here to read more about the rules and regulations enacted by the FDA on herbal products. Click here to learn more about what cGMPs entail and how you can comply or become certified.
Step 4: Create Your Formulations
While being a certified herbalist, or having one on the team, definitely helps to create awesome herbal products, it is not a requirement to start your own herbal business. In this day and age, it is extremely easy to become self-taught in a wide array of occupations and interests, including herbalism. If you don’t have any experience working with herbs, there are many online resources and books you can refer to when making your herbal products. Not only are you able to easily learn about different herbs and their medicinal properties, you can also find endless recipes and formulations that you can follow to a T, or personalize them to make your own. At Vera Herbals, we are always experimenting with different combinations of herbs, carrier oils, essential oils and figuring out the best extraction methods to maintain the integrity of the herbs. Whether you are looking to learn more about different herbs and what they are used for, or need some help with your first formulations, some of the best herbal medicine books for beginning herbalists are:
- Medicinal Herbs: A Beginner’s Guide by Rosemary Gladstar
- The Modern Herbal Dispensatory: A Medicine Making Guide by Thomas Easley and Steven Horne
- Encyclopedia of Herbal Medicine by Andrew Chevallier
- Alchemy of Herbs by Rosalee De La Foret
Step 5: Do Things Differently!
As with any business, it is important to stand out from your competitors. Maybe this means following sustainable business practices, using herbs that are less common, using extraction methods that are lesser known, or advertising your products in a unique way. For example, one thing that Vera Herbals does differently is we use a unique extraction process called Spagyrics—an ancient alchemy that incorporates modern day science and understanding. For Vera Herbals, using this extraction process not only makes us stand out from other companies selling herbal products, but it also allows us to showcase our passion and mission to make products that serve as medicine for the people.
While it is absolutely necessary to execute the steps listed above to start your own herbal business, there are easier, more cost-effective options to consider. Rather than make your own herbal products, and therefore deal with the necessary legalities—both of which can require a tremendous amount of time, money, knowledge, and other resources—you could consider pursuing either a wholesale, white-label or private-label relationship with an already established herbal manufacturer. Not only can one of these options save you a significant amount of resources and stress, but it can also allow you to add top quality, trustworthy, and effective products to your product line from the get-go. Click here to learn more about what to look for in a white-label or private-label partner, and how Vera Herbals can help you kick-off your own herbal business.