Starting a new business has always been an attractive idea to most, with 43% of Americans planning to start their own businesses this year, according to the Census Bureau’s Business Formation Statistics. However, turning your idea into a successful business venture can be a challenge, especially if you don’t know where to start. Luckily, there are some ventures that are easier to get into than most, and they are proving to be quite profitable.
One of these ventures is the home fragrance and aromatherapy business, which has a low-cost entry and is in high demand – 80% of US households use scented candles and the home fragrance industry is expected to reach $2.99 billion by 2028. Thus, if you want to have another stream of income, or if you are naturally interested in aromatherapy and think that you can turn your interest into something more profitable, starting a home fragrance business might just be for you. You don’t have to worry if you don’t know where or how to start, as the steps outlined below can definitely help.
Making Your Own Scents
One of the key tenets of business is to sell what you know. As such, if you are new to home fragrances or aromatherapy, you’ll need to know what you are getting yourself into. This means getting an idea about how fragrances work, what top notes, heart notes, and base notes are, and what scents work best when combined together. Taking a perfumery class can help to give you the knowledge that you need for this business, and it can also help you innovate if you wish to make a signature blend of scents.
It would also be best if you study which scents could impact moods and emotions the most. Studies have shown that certain scents can have positive effects on the way we feel, so knowing how to use and mix these scents can help to produce the desired effects and make your business more legitimate. Understanding these concepts will not only give you a concrete idea about the business that you are building, but moving forward, this will help you effectively sell your products since you know just how to explain them to your customers.
Of course, one way to effectively study home fragrances and aromatherapy is to make your own candle or essential oil. This should not be as intimidating or difficult as it may first seem, and it’s not even very costly. For example, to make your own essential oil, you would only need a crockpot with a lid, distilled water, and at least three to four cups of fresh plant material (the one that you want to use for your scent). Meanwhile, there are also candle making starter kits on the market, which typically costs around $50, and one kit should be enough to get you started.
Conducting a Market Research
Once you’ve gotten the hang of making your own home fragrances, your next step in building your business is to develop your strategy. Developing your business strategy is a particularly important step as the entire first phase of your business will rely on this. When it comes to home fragrance or aromatherapy, as with every business, the first thing that you need to do is to conduct a market research. The importance of conducting market research cannot be understated. According to CB Insights, 35% of businesses fail due to lack of demand for their products or services. Meanwhile, 20% of start-ups fold because they failed to study their competition. These could both be avoided through a diligently done market research.
When conducting your market research, it is important to ask relevant questions. Since you are conducting a market research for your home fragrance business, some questions that you should ask, based on the US Small Business Administration’s guide, are the following: Is there a demand for home fragrance products in the area where you aim to set up your business? How many people would be interested in home fragrance products? Where do your potential customers live, and where can your business reach? How many other home fragrance businesses are there in your area? How much do potential customers pay for these alternatives? Asking these basic questions should give you an idea about how well your home fragrance business will do as you roll it out.
Getting Started
Your market research is not an end in itself, but a means for you to develop a perfect strategy for your home fragrance business. Thus, it follows that after conducting a market research, you should then develop a business plan. As much as possible, be thorough when it comes to drafting your business plan, outlining your objectives, your operating plan, products and pricing, your financials, and your marketing strategy. Just as market research is important, your business plan is also a critical aspect of your home fragrance business, seeing as 82% of businesses fail due to cash flow problems. It can be that these businesses did not start with a viable operational budget, or they did not take critical operational costs such as inventories into consideration when they started out. Developing a detailed business plan should help you proceed with your business safely.
An important aspect of your plan should be the identification of the key cost drivers of your home fragrance business. This way, you will have a general idea of how much your initial capital could be. Most businesses dealing with aromatherapy or home fragrance typically report that their start-up costs at around $10,000 to $30,000. This initial capital should cover the production and packaging costs, including your essential oils, bottles and containers, labels, packaging, and business cards. There are other items that can affect your capital, such as if you are planning to invest on a dedicated workspace for your business. However, since you are just starting out, it would be good to keep costs low by utilizing a dedicated space in your own home first.
Turning Your Business into a Legal Entity
Once you are ready to get your home business running, your next step would be to turn it into a legal entity. This step will ensure that you can legally operate within your area. In turn, securing this step will help you avoid any possible problems with the government as well as avoid potential business risks in the future. For example, if you do not register your business, you become personally responsible for everything, especially in instances when lawsuits are involved. This is much more common than you would think, as 43% of small business owners have been threatened with or involved in a civil lawsuit.
Registering your business will also establish your reputation as a legitimate business, thus making it easier for you to find and build trust among your suppliers, as well as potential employees and customers. Finally, you would need to register your business in order to open a business bank account and apply for business loans. Some of the steps that you need to take when turning your business into a legal entity are to secure a seller’s permit since aromatherapy and home fragrance products such as diffusers and gourmet candles are taxable. You would also need a business license and federal tax ID, and if you decide to hire employees, you need to have a federal tax ID number and a state employer number, too. These are the basic requirements that you would need to accomplish, but other considerations may also vary depending on the state where you live.
Investing in Creative Packaging
Another important aspect of your business that you should focus on is your packaging. A creative packaging will help you stand out in the ever competitive home fragrance industry. Aside from helping your business stand out, a unique and creative packaging will help you boost sales, as a survey shows that 72% of consumers admit that their decision to purchase a product was influenced by its packaging. As such, it is important for you to keep track of packaging trends in order to make sure that you attract customers, too.
What kind of packaging should you consider for your home fragrance business? These days, sustainability is one of the most important considerations when planning how to package your home fragrance products as 42% of consumers do want sustainable packaging. Paper or cardboard packaging can be a good option for home fragrance products as 71% of consumers do prefer that over other packaging materials, such as plastic. You can even boost your sales through your packaging, as 74% of consumers are willing to pay a higher amount for products that are contained in sustainable and environment friendly packaging.
Create Your Business Website
One of the advantages of starting a business these days is that it has become infinitely easier to do so, especially since online selling is slowly becoming the norm. This year alone, there are 266.7 million online shoppers in the US, a 1.4% increase from the previous year, and conducting your business online gives you access to this pool of potential customers. It may be tempting to simply use social media as a way to tap potential customers online, but that will not exactly help you boost your business. Having your own website is a good way to build your business online, especially since 47% of consumers tend to visit a company’s website before making a purchase.
Fortunately, setting up a website for your home fragrance business is easy to do. There are various free platforms you can use to set up your website, such as WordPress and Wix. These platforms also have ready templates that you can use for your website. You can also review trends to know what customers want in a website. For example, data shows that 62% of consumers want a business’s contact information to be easily located on your website. You can also include your home fragrance’s story, highlighting its positive traits, as 31% of consumers consider the “About Us” page as a critical element of a website. Make sure, too, that your website is easily navigable, and that the purchasing process is streamlined. This means that once your customer visits your website, they should have an easy time from the time they choose a product to buy to the time that they pay.
Finding the Right Spaces
Finding the right space where you can sell your home fragrance products may seem tricky at first, but it does not have to be. After all, selling things online has become the norm now, making it easier for small business owners to have a wider reach for their products. It was mentioned earlier that having a good website is essential for your home fragrance business. Once you have that, one option for you to explore when advertising your business is using Google Ads, which is a pay-per-click platform that allows your website to be visible on Google’s search results page. Another advantage of using Google Ads is that it allows you to focus on local markets, which is particularly important given that 72% of consumers who perform a local search visit a store within five miles from their current location.
Meanwhile, if you do not have a physical store yet but you want to meet your customers personally, one possible space for you to explore is the farmer’s market. Selling candles in your local farmer’s market is a good way to also meet other business owners, which can widen your network. As well, due to the pandemic, more and more consumers are turning to farmer’s markets instead of retail stores when doing their shopping. In a 2020 survey, more than 50% of respondents said they would be shopping at farmer’s markets more. Having a physical stall in farmers’ market is an ideal halfway in between having your own store and operating entirely online. If you do not want to have a long-term stall in a farmer’s market, you can also try selling at crafts fairs and festivals near your home, as these are more temporary but they also give you the opportunity to directly interact with your customers.
Just like with any venture, starting your own home fragrance business will require time, effort, and persistence. This list might look intimidating, but putting them into practice should be easier since you already know what to do. Besides, the home fragrance industry is booming, so you’ll soon find your efforts rewarded.
