Are you about starting an essential oil company? If YES, here is a complete sample essential oil extraction business plan template & feasibility report you can use for FREE.
Okay, so we have considered all the requirements for starting an essential oil extraction business. We also took it further by analyzing and drafting a sample essential oil extraction business marketing plan template backed up by actionable guerrilla marketing ideas for essential oil extraction businesses. So let’s proceed to the business planning section.
The use of essential oil has continued to gain popularity. This popularity can be said to be associated with the health benefits that comes with using essential oils. It is no wonder that the market for essential oils have continued to be on the increase.
So if you are considering starting a business in the united states of America, then one of your options is to start an essential oil extraction business.
The fact that this line of business is not very popular means that you must be willing to undertake thorough feasibility studies and market research. It is indeed a money – spinning business if it is well located and if you are able to create a robust distribution network.
If you are certain that starting an essential oil extraction business is what you truly want to do after you must have conducted your market research and feasibility studies, then the next step to follow is to write a good business plan; a detailed blueprint of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your product.
The truth is that it is one thing to have a fantastic idea cum business plan, but another thing for the business plan to translate to profits, that is why it is important to assemble a team of experts to work with if you want to be successful with your essential oil extraction business.
Please find below a sample essential oil extraction business plan template that will help you successfully write yours within record time.
An essential oil is a concentrated hydrophobic liquid containing explosive compounds from plants. Essential oils are also known as volatile oils, ethereal oils, aetherolea, or simply as the oil of the plant from which they were extracted.
Essential oils are usually extracted by distillation, often by using steam. Other processes include expression, solvent extraction, absolute oil extraction, resin tapping, wax embedding, and cold pressing. They are used in perfumes, cosmetics, soaps and other products, for flavoring food and drink, and for adding scents to incense and household cleaning products.
Essential oils are often used for aromatherapy, a form of substitute medicine in which healing effects are credited to aromatic compounds. Aromatherapy may be useful to induce relaxation, but there is not adequate indication that essential oils can effectively treat any condition.
Research shows that the United States essential oil market size was treasured at USD 3.36 billion in 2015 and it is anticipated to witness a predictable growth rate of 9.0 percent from 2016 to 2024. This industry is a thriving industry and as a matter of fact, there are about 200 different types of essential oils used all over the world annually, and the United States of America plays a main role in total demand.
Going forward, the additional health profits of essential oils are anticipated to trigger their demand in pharmaceutical and medical applications. These oils do not exhibit in any way any recognized side effect unlike other conventional medicines and drugs; this will probably be a significant boosting factor for the market.
The increased usage of fragrances and flavors due to the development of end-use industries in emerging markets is projected to drive the U.S. market.
Major players have established supply partnerships to reduce total production costs. Local manufacturers concentrate on providing advanced varieties of essential oils at reasonable prices and most of the striking essential oils are formed from rare crops and plants which are either difficult to harvest.
Please note that the barriers to entry for the essential oil extraction business are moderate, with the most significant barrier being the ability to raise capital. Capital investments are needed to purchase machinery and equipment and rent facilities.
While the amount of capital needed to enter the industry depends on the scale of operations an entrant is pursuing, even small – scale facilities require significant capital.
Other barriers include securing supply contracts with upstream suppliers of essential oil plants (bark, leaves and resin) such as bitter orange, cinnamon, ginger, lavender, guava, myrrh, pine, bay leaf, frankincense, grapefruit, cedar, jasmine, hyssop, lemon grass and other ingredients used to extract essential oil and other industry goods.
The well-entrenched position of the leading processors in the industry can also represent a barrier to entry for prospective entrants.
Over and beyond, the essential oil extraction business is a profitable industry and it is open for any aspiring entrepreneur that has the capacity to compete with other players for the available market share to come in and establish his or her business.
Sweet Fragrance® Essential Oil Extraction Company, Inc. is a licensed essential oil extraction and packaging company that will be located in between an industrial area and a farming community in Honolulu – Hawaii.
We have been able to secure a long – term lease for a facility in a strategic location with an option of long – term renewal on agreed terms and conditions that is favorable to us. The facility has government approval for the kind of business we want to run and it is easily accessible.
We are in the essential oil extraction business to produce a wide variety of essential oils extracted from different plants such as bitter orange, cinnamon, ginger, lavender, guava, myrrh, pine, bay leaf, frankincense, grapefruit, cedar, jasmine, hyssop, and lemon grass in commercial quantities for retail outlets, cosmetics and fragrance businesses, and massage and body therapy businesses.
We are also in business to make profits and at the same to give our customers value for their money; we want to give people and businesses who patronize our essential oil the opportunity to be part of the success story of Sweet Fragrance® Essential Oil Extraction Company, Inc.
We are aware that there are several essential oil extraction companies scattered around the United States whose products can be found around, which is why we spent time and resources to conduct our feasibility studies and market survey so as to enable us locate the business in an area that will support the growth of the business.
We ensured that our facility is easy to locate and we have mapped out plans to develop a wide distribution network for wholesalers all around Honolulu – Hawaii and the United States of America.
Much more that the extraction of quality essential oil in commercial quantities, our customer care is going to be second to none. We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied when they purchase our product.
We have a CRM software that will enable us manage a one on one relationship with our customers (wholesale distributors) no matter how large they may grow to. We will ensure that we get our customers involved when making some business decisions that will directly or indirectly affect them.
Sweet Fragrance® Essential Oil Extraction Company, Inc. is family business that is owned and financed by Bianca Dawson and her immediate family members.
This Honolulu, Hawaii native graduated from high school in just three years. Formerly, Bianca was Brand Manager at Proctor & Gamble, and also worked at Bain & Company prior to starting Sweet Fragrance® Essential Oil Extraction Company.
She has robust experience that stretch over 13 years and she holds a Bachelor of Science in Biochemistry from the University of California and MBA from the University of Chicago Booth School of Business.
Sweet Fragrance® Essential Oil Extraction Company, Inc. is going to operate a standard essential oil extraction and packaging company whose product will not only be sold in Honolulu – Hawaii but also throughout the United States of America.
We are in the essential oil extraction business to make profits and also to give our customers value for their money. We will be engaged in the extraction and sale of a wide range of essential oil such as;
Our Business Structure
Sweet Fragrance® Essential Oil Extraction Company, Inc. is established with the aim of competing favorably with other leading essential oil brands in the industry. This is why we will put the right structures in place that will support the kind of growth that we have in mind while setting up the business.
We will make sure that we only employ people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders.
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more depending how fast we meet our set target. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;
Chief Executive Officer – CEO (Owner):
Plant Manager
Human Resources and Admin Manager
Essential Oil Extraction Machine Operators
Sales and Marketing Manager
Accountant/Cashier
Client Service Executive
Distribution Truck Drivers
If you live in the United States of America, you will agree that essential oils from South America and the Caribbean can be seen in stores in the United States of America is why we are following the due process of establishing a business so as to compete favorably with them.
We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.
Sweet Fragrance® Essential Oil Extraction Company, Inc. employed the services of an expert HR and Business Analyst with bias in startup business to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.
This is the summary of the SWOT analysis that was conducted for Sweet Fragrance® Essential Oil Extraction Company, Inc.;
Part of what is going to count as our strength is the vast experience of our management team, we have people on board who understand how to grow business from the scratch to becoming a national phenomenon.
So also, our large national distribution network and of course our excellent customer service culture will definitely position our company to compete with other top-flight essential oil extraction companies within and outside the United States of America.
The inability to initially leverage on economies of scale may count against us since we are a new essential oil extraction and packaging company. In addition, we don’t have the financial capacity to engage in the kind of publicity that we intend giving the business.
The opportunities for essential oil extraction companies is enormous. This is due to the fact that there are loads of manufacturing companies across different companies and retailers who rely on the supply of essential oil.
As a result of that, we were able to conduct a thorough market survey and feasibility studies so as to position our business to take advantage of the existing market for essential oil and also to create our own new market. We know that it is going to requires hard work, and we are determined to achieve it.
Some of the major threats that we are likely going to face is economic downturn and unfavorable government policies. It is a fact that economic downturn affects purchasing power. Another threat that may likely confront us is the arrival of a new essential oil extraction and packaging company in same location where ours is located.
No doubt, investors and entrepreneurs are beginning to establish businesses in the essential oil line of business due to the fact that health profits of essential oils trigger their demand in pharmaceutical and medical applications. Good enough, studies show that these oils do not exhibit in any way any recognized side effects unlike other conventional medicines and drugs; this will probably be a significant boosting factor for the market.
Another notable trend in this business is that more players in the food, fragrance and cosmetics, pesticide and other related production industry are beginning to increase their demand for essential oil as part of their raw materials because of the aromatic nature it adds to their product.
As a matter of fact, essential oil is gaining more ground as part of the materials used in the production of perfumes, cosmetics, soaps and other products, for flavoring food and drink, and for adding scents to incense and household cleaning products amongst others.
Lastly, the price of essential oil plant is typically the most reliable driver of industry performance. It is important to state the part of what affect productivity output in this industry is the fact that essential oil farming is vulnerable to unpredictable weather conditions, and the demand for high-quality essential oil in key foreign markets will boost exports.
Essential oil is one of many products that is used all around the globe for different purposes. In essence, our target market can’t be restricted to just a group of people or organization, but all those who reside in our target market locations.
We are in business to engage in the extraction of essential oil and wholesale distribution of essential oil to the following groups of organizations;
Our competitive advantage
There is hardly any business that does not come with its own fair share of competition hence we are prepared to compete favorably with other essential oil extraction companies in Honolulu – Hawaii and throughout the United States.
Top on the list of the competitive advantages that we are bringing to the industry are our business location, robust relationship with essential oil plant farmers, ability to alter goods and services produced in favor of market conditions and appropriate climatic conditions.
Sweet Fragrance® Essential Oil Extraction Company, Inc. is launching a standard essential oil extraction brand that will indeed become the preferred choice for business and households.
Part of what is going to count as competitive advantage for Sweet Fragrance® Essential Oil Extraction Company, Inc. is the vast experience of our management team. So also, our large national distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.
Last of all, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry, meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.
We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.
Sweet Fragrance® Essential Oil Extraction Company, Inc. is established with the aim of maximizing profits in the business and we are going to go all the way to ensure that we do all it takes to sell our oils to a wide range of customers. Sweet Fragrance® Essential Oil Extraction Company, Inc. will generate income by simply selling;
When it comes to essential oil extraction business, if your essential oil is well – packaged and branded and if your production plant is easily accessible, you will always attract customers.
We are well positioned to take on the available market in Honolulu – Hawaii and every city where our essential oil will be sold and we are quite optimistic that we will meet our set target of generating enough income/profits from the first six months of operation and grow the business and our clientele base.
We have been able to examine the essential oil extraction business, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast.
Below are the sales projection for Sweet Fragrance® Essential Oil Extraction Company, Inc., it is based on the location of our business and other factors as it relates to small scale and medium scale essential oil extraction and packaging company startups in the United States;
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same product as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
Prior to choosing a location for Sweet Fragrance® Essential Oil Extraction Company, Inc. we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market in our target market locations.
We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time and also for our essential oil to favorable compete with other leading brands in the United States of America.
We hired experts who have good understanding of the essential oil extraction business to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Honolulu – Hawaii and other cities in the United States of America.
In summary, Sweet Fragrance® Essential Oil Extraction Company, Inc. will adopt the following sales and marketing approach to sell our essential oil;
Notwithstanding the fact that our essential oil extraction plant is a standard one with a wide range of products that can favorably compete with other leading brands, we will still go ahead to intensify publicity for all our products and brand. We are going to explore all available means to promote Sweet Fragrance® Essential Oil Extraction Company, Inc.
Sweet Fragrance® Essential Oil Extraction Company, Inc. has a long – term plan of distributing our essential oil in various locations all around the United States of America which is why we will deliberately build our brand to be well accepted in Honolulu – Hawaii before venturing out.
Here are the platforms we intend leveraging on to promote and advertise Sweet Fragrance® Essential Oil Extraction Company, Inc.;
We are aware of the pricing trend in the essential oil extraction business which is why we have decided to produce various product sizes.
In view of that, our prices will conform to what is obtainable in the industry but we will ensure that within the first 6 to 12 months, our products are sold a little bit below the average prices of various essential oil brands in the United States of America.
We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our essential oil brands.
The payment policy adopted by Sweet Fragrance® Essential Oil Extraction Company, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Sweet Fragrance® Essential Oil Extraction Company, Inc. will make available to her clients;
In view of the above, we have chosen banking platforms that will enable our client make payment for product purchase without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
Starting a standard essential oil extraction and packaging company is indeed a capital-intensive business because the amount required to set up an essential oil extraction plant is relatively on the high side when compared to similar businesses.
The bulk of the startup capital will be spent on leasing or acquiring a facility and also in purchasing essential oil extracting and processing machines. Aside from that, you are expected to purchase distribution trucks, pay your employees and utility bills.
These are the key areas where we will spend our startup capital;
We would need an estimate of $500,000 to successfully set up a standard and world class essential oil extraction plant in Honolulu – Hawaii.
Generating Funds/Startup Capital for Sweet Fragrance® Essential Oil Extraction Company, Inc.
Sweet Fragrance® Essential Oil Extraction Company, Inc. is a family business that is owned and financed by Bianca Dawson and her immediate family members. They do not intend to welcome any external business partners which is why she has decided to restrict the sourcing of the startup capital to 3 major sources.
N.B: We have been able to generate about $200,000 (Personal savings $150,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $300,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
The future of a business lies in the number of loyal customers they have, the capacity and competence of their employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.
One of our major goals of starting Sweet Fragrance® Essential Oil Extraction Company, Inc. is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to supply our well – branded essential oil a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Sweet Fragrance® Essential Oil Extraction Company, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List/Milestone
