How To Start Herbal Medicine Business? - A Stepwise Guide

How To Start Herbal Medicine Business? - A Stepwise Guide
How to Start Herbal Medicine Business

In recent years, there has been a considerable growth in the sales of herbs or herbal medicinal products and starting a herbal business comes with many prospects. Many people especially from the top developed countries are recognising the benefits of herbal medicine and are switching from the conventional pharmacy.

Starting a herbal business is profitable but you need a good business model. To start this type of business, you need to have prior knowledge of traditional medicine like be a herbalist, or a Herbal medicine degree.

The owner must do deep research and create a detailed business model for the product, the price, the promotion, and distribution. Planning and research on different aspects are some of the key factors for a successful business because there is a lot of competition in the market. Here in this post, we will discuss briefly how to start a herbal medicine business and excel in this business.

How to Start A Herbal Medicine Business
Step 1: Naming Your Herbal Business
Step 2: Know Your Herbs
Step 3: Plan Your Herbal Business
Step 4: Form A Legal Entity for Your Herbal Business
Step 5: Open a Business Bank Account for your Herbal Business
Step 6: Marketing of Herbal Medicine
Step 7: Getting Permits And Licenses for Herbal Business
Step 8: How To Promote Your Herbal Business


How to become a successful online herbalist

How to Start A Herbal Medicine Business

Here are steps to start a herbal medicine business in India.

Step 1: Naming Your Herbal Business

Planning and researching the name of the business is very crucial. Naming a company can be challenging and time-consuming as it requires a lot of research. Your company name is an important part of your company’s identity. Once you understand what you want your company then start thinking about a particular name that describes your industry also think about words that describe your competitors.

Using similar names to your competitors makes it very difficult to differentiate your company from the others. Which is why the owner must identify the current trends and avoid following them by choosing a unique name that defines their company.

Step 2: Know Your Herbs

Herbal plants
Herbal Plants

Before starting into a herbal products business, you should have a basic knowledge of herbal remedies and their applications. You must recognise and have knowledge about each herb that you are using. And ensure that your products are both safe to use and effective. You have to decide which herbs you want to grow in your herbal medicine garden.

Its always a good idea to focus on a select few when you’re growing for the market rather than offering a huge selection. Being a herbalist, one must only use organic fertilizers, as they help plants grow healthier. The owner must have knowledge on the herbal medicine uses, and identify the herbal medicine plants to expand the product range.

Here is the list of herbal medicine plant that's common :

  • Chamomile
  • Echinacea
  • Feverfew
  • Garlic
  • Ginger
  • Gingko
  • Ginseng
  • Goldenseal
  • Milk thistle
  • Saint John's wort
  • Saw palmetto
  • Valerian

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Step 3: Plan Your Herbal Business

Global herbal medicine market revenue, by product
Global Herbal Medicine Market Revenue, By Product


A clear herbal medicine business plan is essential for a successful entrepreneur. The cost must be planned according to the herbal medicine business model. One way you can reduce the cost is by purchase the medicinal herbs through a wholesaler and by then reselling these herbs online.

If you decide to open a permanent store to sell medicinal herbs, it will require a person to have access to much more capital. The largest expense for the people who decide to grow their medicinal herbs is the land. Depending on your herbal medicine business and the land size, you will have to pay monthly for rent, utilities, seeds, inventory, and labour.

Target Audience

A herb business can have many different kinds of clients or customers. Customers who opt for herbal medicine might be interested in living a naturally healthy lifestyle, some might want it for their physical ailments, while some might already have experience with herbal medicine.  

Charge of Customers

The cost you decide to charge your customers solely depends on your product’s quality, uniqueness, and where you choose to sell. Business owners that sell unique products have much more flexibility in setting their prices. The herbal medicine shop business usually has flexible prices for the medicine, while if the owner is starting a herbal medicine business online then they can set fixed prices for the products.


Medicinal herbs businesses that re-sell bulk herbs typically charge 30% or more over their costs. Businesses that grow medicinal herbs can also plant culinary herbs to diversify their customer base. All owners of medicinal herbs businesses can create various different type of  “value-added” products.


When it comes to strength as a company, it will depend on the portfolio of products and the wide range of herbal medicines and teas for different ailments that can meet the needs of a wide range of consumers. The herbal medicine in India is booming as many people prefer organic medicines, especially during the Covid 19 Pandemic.

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The most common business structure types are the sole proprietorship, partnership, limited liability company(LLC). Establishing a legal business entity such as an LLC or corporation will protect you from being held personally liable if your medicinal herbs business is issued.

Step 5: Open a Business Bank Account for your Herbal Business

Opening a separate bank account for the business is essential for personal asset protection. The herbal medicine business owner can then get a credit card for their business account so the personal and business expense is separate. Have a business bank account also makes it easier for accounting and tax filing. Besides that, it also helps in understanding the financial performance of your herbal business.

Step 6: Marketing of Herbal Medicine

Herbal medicines can be sold in various dosage and different forms such as tablets, extracts, dried plants, capsules, products among others. The global herbal the medical market is segmented based on the type of the medicinal product, its application, and geography. According to a research, Global Herbal Medicine Market is expected to register a CAGR of 5.88% to reach USD 1,29,689.3 Million by 2023. According to a 2015 report by National Center for Biotechnology Information, around 70% to 80% of people globally rely on herbal sources for their treatment.

  • Marketing via email was one of the first digital advertising methods, but it’s still one of the most effective.
  • Pay close attention to federal, state, and local regulations. The herbal medicine industry has been subject to many investigations regarding product marketing and benefits.
  • Partner with local health-related businesses. Producers will have the most credibility in their communities.
  • Establish a product website.

Step 7: Getting Permits And Licenses for Herbal Business

To manufacture any type of Ayurvedic or Herbal products in India, you will need a license from AYUSH (The Ministry of Ayurveda, Yoga, Naturopathy, Unani, Siddha, and Homoeopathy) and not from FSSAI. Below are 3 types of manufacturing licenses issued by AYUSH :

  • Complete Manufacturing License - This is a full-fledged manufacturing license. This license is a must, if you decide to market, manufacture your own product, or set up your own manufacturing unit. To get this licence, you will have to fulfil all the requirement that is stated by the state authority of AYUSH.
  • Loan License - This is a manufacturing license which allows you to loan a manufacturing unit of a third party manufacturer to make your herbal products. This way you can reduce the cost of owning a manufacturing unit.
  • Contract/ Third party manufacturing - This license will allow you to use the manufacturing license of a third-party manufacturer to manufacture the product. This way you can only market your products. With this license you don't have to own any manufacturing unit and don't have to get any license.

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Step 8: How To Promote Your Herbal Business

Product Knowledge

When we speak of herbs, it is very important to have a basic knowledge of what you are going to sell. It is of utmost importance to know each herb that is going to be a part of your business plan.

Knowing Your Market

Creating your herbal product and putting it on your website is not enough to grow your business. You need to identify the ones you are making your product for. Your products need to solve the problems of the target audience. Presenting your product to the wrong group of people will only hold back your business from growing.

Guiding And Communicating

Herbal products are needed by consumers when their concerns are related to health. You will stand a better chance of selling your products if you can guide them about the products and their uses. This will instantaneously earn the much-needed trust of your customer which is always a positive aspect in marketing your business.

Affordable Pricing

You need to keep in mind that the products you are selling don’t suffer from the issue of overpricing. The urge to keep the products under-priced is helpful for any business owners, you have to vary much care about that you have not faced any losses.

Branding Via App

Having an app for your business not only creates a digital marketing channel but also stand out from the competitors.

Offers Coupons And Discounts

This is a great way to attract the first batch of customers and lift your business from the ground when you are just a beginner. Offering too much will increase the consumer's unhealthy expectations. So make the marketing plan with great efficiencies.

Active On Social Media

Advertising via social media costs very little and offers other benefits as well. In this way, consumers get involved in the process of marketing your herbal business. You must regularly update your social profiles and the posting of content that are engaging and interesting.

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How to start herbal products business in India?

Things to consider before starting a herbal product business:-

  1. Market Research
  2. Know your herbs
  3. Licensing & Registration
  4. Location Targeting
  5. Marketing

How do I get Ayush license?

The Procedure to Obtain Licence for herbal products in India:-

  • Visiting the Website
  • Review of Documents
  • Approval by the Commissioner
  • Obtaining the License

What is Ayush certification?

Quality Council of India has been engaged for voluntary certification of quality of Ayurveda Siddha Unani (ASU) products. AYUSH Standard and AYUSH Premium Marks are awarded for products moving in the domestic and international market respectively.

How does a medicinal herbs business make money?

Medicinal herbs business owners make money by selling herbs.

What are the expenses for a medicinal herbs business?

Depending on your business, you will have to pay monthly for rent, utilities, seeds, inventory, and labour.

What are some skills and experiences that will help you build a successful medicinal herbs business?

The owner of the medicinal herbs company needs to have an understanding of the proper use of medicinal herbs or must be a herbalist. If not the owner can get a herbal medicine degree or join an online herbal medicine courses.

What is the growth potential for a medicinal herbs business in India?

With the ongoing Covid 19 Pandemic, there has been a massive growth of natural products and healthier alternatives to more common medical issues in India.

How to make herbal medicine?

To make herbal medicine, the herbalist must have knowledge of types of herbal medicine.

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