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How To Start A Spice Business in 7 Steps

Do you want to start a profitable spice business? Find here a detailed spice business plan sample checklist for your ready reference.

Basically, spice is an essential item in cooking. Additionally, the processed food industry is the largest consumer of spices as well. However, there are a variety of spices available globally. And the prominence depends on the taste of local consumers.

Generally, spice processing and packaging are easier businesses to start. In addition, one can start this business with small startup capital investment and infrastructure. Even, if you have space you can start the business at your home location.

Basically, spice processing and packaging ensure a good return to the entrepreneurs. And apart from the local market, the product has good demand in the export market too.

Here are the 7 Steps to Start Spice Business

1. Select the Spice Types

Broadly, you can offer three different types of products in this business. These are whole spice, spice powder, and spices for the specific recipe. Each and every item has its own consumer demand. The people who prefer using the spices in both ways as whole and paste, definitely prefer the whole spices. On the other hand, some people only prefer spice powder.

Some of the popular and widely used spices are Turmeric, Chilli, Cumin, Coriander, Black Pepper, Cardamom, and Cloves. However, there is another market for the specific blend of spices for specific recipes. The list includes meat masala, chicken masala, sabji masala, garam masala, chana masala etc. Additionally, the demand for organic spices is also increasing nowadays. However, you must initiate the business according to the taste of your target demographics.

Read: Best Food Processing Business Ideas

2. Evaluate the Cost & Investment For Spice Business

According to your business model, you will need to calculate the total investment of your business. Generally, a small-scale operation demands two different types of investment. These are fixed capital costs and working capital costs. Some of the major considerations in fixed capital are the plant, building, machinery, licensing, registrations, etc.

On the other hand, working capital cost includes raw materials, staffing, distribution, marketing, and tax liabilities. If you don’t have your own space, it is advisable to start the business from a rental location. In addition, check if there is any subsidy or grant available from the Govt.

3. Create a Business Plan

Crafting a business plan or project report is a must for this business. Generally, a project report provides you with an important series of information regarding the project incorporation. Additionally, it helps to get finance from investors or banks.

Apart from the investment calculation, you must have a proper marketing plan. You will need to have a clear conception of the distribution, marketing, and sales promotion strategy. Here we have listed the basic steps for starting this business.

4. Registration & Licensing

It is essential to register your business for starting and running a legally compliant spice manufacturing company in India.

Spice is a food item. And food item processing demands several licenses and permissions from the Govt. agencies. However, it hugely depends on the law of the state where you are initiating the business.

In India, you must obtain FSSAI permission for the spice business. It is advisable to talk with a small business consultant about the specific licenses and permissions for the manufacturing operation.

Also, you need to have a GST registration number to run a spice business in India.

Check: Best GST Software in India

5. Machinery

According to the products you want to offer, you will need to procure the right machinery. Some of the major required machines are:

  • Disintegrator
  • Spice grinder
  • Packaging machine
  • Pouch sealing machine
  • Weighing scale

6. Raw Materials for Spice Business

The major required raw materials are different types of unground spices. The list includes turmeric, black pepper red chilies, cumin, coriander, etc. In addition, you will need to procure the pouch as the main packaging consumables. Also, you will need to provide corrugated cartons for bulk packaging.

7. Spice Manufacturing Process

The process of manufacture involves cleaning, drying, pulverizing, sieving, and packaging spices such as chili, pepper, turmeric, coriander, etc. either individually or in combination with other spices. The manufacturing process is very well established and does not involve technicalities.

First of all, clean the unground spices manually to remove impurities like mud and stones. And then wash with water. After drying them in sunlight, they are graded and ground with the help of a grinding machine to convert them into powder form.

If you want to produce a specific mix of spices, then you will need to create the blend. And the final step is the packaging. The storage and proper distribution are important in getting long-term success in the spice business.