How to Start an Herbal Business

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Medicinal herbs are ancient healing tools with important modern applications. The cost and toxicity of many modern pharmaceutical drugs have made herbal remedies an appealing option for some modern consumers. To start an herbal business, you should have knowledge of herbal remedies and applications, although sales of most medicinal herbs are not regulated by state authorities. Despite the lack of specific oversight, it is wise to know state and federal rules regarding specific claims about the effectiveness of herbal medicines. You also should know enough about the herbs you sell to steer customers toward appropriate choices.

Write a business plan for your herbal business. Outline your specific focus, such as whether you will cultivate medicinal herbs and sell them wholesale to wellness centers and naturopaths, or whether you will operate a retail store selling herbal products directly to consumers. Provide a marketing plan with concrete details about how you will reach customers interested in herbs and natural health, such as working cooperatively with holistic health practitioners. Attach financial information for your herbal business, including a balance sheet detailing your personal resources. Also include projections showing how much it will cost to buy the herbs and supplies necessary to start your business, and how much you will have to sell in order to break even and earn a profit. Provide specific information about profit margins for growing herbs and crafting herbal products.

Contact your city and state revenue departments and get the licenses necessary to run an herbal business. If you will be hiring employees for your herbal business, contact your state's unemployment insurance and industrial insurance divisions. Call the IRS and register as an employer to receive an employer identification number.

Follow FDA labelling requirements for herbal products, designating them as food supplements rather than medicines. Learn the specific language protocols for legally making claims about the uses and effectiveness of herbal products. Learn which herbs the FDA considers unsafe, such as ephedra, and do not sell them.

Set up a space for your herbal business. If you will be growing herbs, lease or buy a plot of land, as well as fertilizer and seeds. If you will be retailing herbs, lease a storefront in a part of town frequented by your target market, such as an affluent area with yoga studios and natural food stores. Outfit your retail location with shelves for inventory, books and accessories such as mortar and pestle sets. Purchase jars, scoops and labels for bulk herbs, as well as packages of herbs and tinctures, or liquid herbal preparations.

Market your herbal business by advertising in venues that appeal to your target market, such as local holistic health periodicals and food co-op newsletters. Set up booths at local wellness events. Network with naturopaths and other holistic health practitioners who recommend herbal products to their clients. Build an attractive, informative website describing your products and services. Include ecommerce capabilities to reach customers outside your immediate geographic area.