How to Make Money from Lavender Oil Extraction

How to make money from Lavender oil extraction.
How to make money from Lavender oil extraction.

How to make money from Lavender oil extraction

The demand for essential oils is increasing day by day.  People tend to use essential oils for various purposes like for skin, fragrance, muscle pains, and mostly for health issues. Essential oils are highly concentrated, fragrant, and natural constituents found in plants. The most used lavender oil from centuries is produced from a lavender plant. The flowers and buds are used to extract the lavender essential oil from the plant. The essence of the lavender is used as a purifying, calming, and botanical ingredient.  The name itself is derived from a Latin word which means “to wash”. As this oil has beautiful fragrance properties, it is often used in bath soaps and laundry. Lavender is used in cosmetics, soaps, and in medicines as in the form of oils, gels, lotions, shampoos, conditioners, sprays, etc. This created an opportunity for the entrepreneurs to start a business of extracting lavender oil. Before setting up their business, one must understand the process and make a clear picture of his business plan. Now, let us get into the details of the lavender oil extraction business to make huge money.

Ideas to start and make money from lavender oil extraction business

Things to remember before starting lavender oil extraction business

  • The extraction of commercial essential oils totally depends upon the market strategies and financial management. Firstly one must concentrate on manufacturing, production, distribution, and sales.
  • Identify the local demand and do some research regarding the market of the lavender essential oil.
  • Meet entrepreneurs and make a note of important points.
  • Expertise people in the field can advise better about cost and marketing ideas.
  • Register the business and obtain required permits and licenses as per state laws.
  • Establish plant and machinery; carefully calculate the production output and quantity.
  • Calculate the breakeven point and return on investment.

Create a business plan for lavender oil extraction

Before setting up the business one must make a detailed analysis of the cost. The cost is required for investment which includes capital expenditure, transportation, labor considerations, etc. examine the geographical area and do some research in nearby grocery stores, health centers, parlors, etc. make a detailed analysis and include day to day activities.

Legal formalities for extraction of the lavender oil business

The small scale business of extraction of lavender oil can be started as a form of a sole proprietorship. This form of business organization doesn’t require more formalities. The registration is optional and a business license is mandatory to obtain. To extend the business one can register their business legally as a form of Company or Limited Liability Corporation (LLC). The Company can be registered as per provisions of Companies Act, 2013. The application should be sent to Register of Companies ROC with the required documents. The ROC will verify the documents and incorporate the Company with its name. After registering the business apply for the licenses required as per state laws. It is mandatory to obtain a business license from local authorities. If the oil is manufactured for cosmetics and drugs then license as per the Cosmetics and Drugs regulation Act and Rules must be obtained. The property must be insured to prevent damage or loss.

The extraction process of lavender oil

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Dried Lavender Plants.
Dried Lavender Plants.

The common process of extraction of lavender oil is by steam distillation. Steam distillation is considered a common process for the extraction of essential oils from the plant materials. The freshly cut lavender or dried one is loaded in large volume vessel. The vessel is filled and packed with airtight covers. The distillation process starts and once fire heats up the water in the giant vessels the steam produces. Steam passes through the vessel and vaporizes the essential oil. The vaporized plant compounds pass through the condensation flask which is called a condenser. The two pipes are present in the condenser, one is hot water to exit and the other is cold water to enter the condenser. The cold water passes and vapor gets cooled. By condensation, the vapor turns into liquid form. The liquid and by-product are passed from the condenser is collected into a vessel, called a separator. The essential oil floats on the top of the water, which is separated by a process called decantation. The resultant oil is a highly concentrated liquid that contains aroma and therapeutic properties. The oil must be 100% pure and no chemicals added in its manufacturing.

The equipment and machinery for lavender oil extraction

The below-mentioned plant and machinery must be established in the selected location. The plant and machinery for the extraction of lavender oil can be owned or rented based on cost.

  • An evaporate vessel
  • Florentine flask
  • Condenser
  • Cooling tower
  • Pump (cooling water)
  • Pump (condensation)

The cost to start a lavender oil extraction business in India

The cost to start lavender oil extraction business may vary from small scale to large scale. If operating costs can be managed the investment for the business can be reduced accordingly. The cost to start this business ranges from Rs. 24,00,000 to Rs. 28,00,000 includes capital expenditure and variable expenditure.

  • Plant and machinery – Rs. 5,00,000 to Rs. 5,20,000
  • Installation and taxes – Rs. 40,000 to Rs. 60,000
  • Premises – Rs. 1,00,000 to Rs. 2,00,000
  • Registration and licenses – Rs. 1,00,000 to Rs. 1,70,000
  • Water and electricity – Rs. 60,000 to Rs. 80,000
  • Manpower – Rs. 70,000 to Rs. 1,00,000
  • Raw material (plant material)- 2,00,000 to Rs. 3,00,000
  • Any other miscellaneous expenses- Rs. 60,000 to Rs. 1,00,000.

Marketing strategies for lavender essential oil

The lavender essential oil is used in Aromapathy and treats many medical conditions. The market for lavender oil is already established. So, one no need to put effort to start from scratch. People love to use essential oils rather than any medical treatments. So if one wanted to increase their sales, firstly they have to establish the brand name. The brand name is most important for any product. This brand can be advertised and promoted in various fields. The advertisements can be done in local newspapers, TVs. Online promotions can efficiently increase sales within a short period of time. There are many modes of promoting the brand online. Social media is a good source like Facebook, Twitter, Instagram can help to reach clients easily. The clients will increase if one is manufacturing the quality of branded oil. The price also impacts the market. There are many brands available in the market. So, one should estimate the price which is reasonable and should not impact the other brands.

Uses of lavender essential oil

The lavender has many properties where it is used in hair care, skin care for beautiful looks. Many more uses of lavender essential oil are listed below:

Due to properties such as antioxidant and anti-inflammatory effects this oil is used in a skincare routine. The anti-aging, scars, and any other infections can be treated by this oil. The regular lotions or gels can be added with few drops of lavender oil to use them on skin. But before applying it on the skin do a patch test and then apply, because it may cause allergy on the skin if it is not suitable. The market is increasing due to these uses. The lavender oil is used in soaps, lotions, gels for skin care. A study proved that lavender oil can treat hair loss. Hair loss is considered a major problem in both women and men. These essential oils treated their problems and stood as a solution for them. It can be added to the routine hair masks and applied to hair. The hair growth can be stimulated and thickness can be observed in a couple of weeks. For this property in the oil, it is been used in shampoos and conditioners. They come up with fragrance like scented conditioners or shampoos. Most commonly the lavender oil is used to treat anxiety, insomnia, depression, and stress due to its fragrance and aroma.

Growing conditions of a lavender plant

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Lavender Field.
Lavender Field.

The quality of the essential oil depends upon the growing conditions of the lavender plant.  Lavender is grown in alkaline soil with a good drainage facility. These plants are grown under sunlight with good air circulation. They can adjust to the environmental conditions but need to take care for a while.

How to use lavender essential oil

The essential oils are recommended not to use directly on skin and scalp. It is mandatory to consult a health professional before using them. The best usage of the oils is by mixing it with some carrier oils. The oil must be blend with some other oils like almond oil, coconut oil or olive oil, etc. Before using those for health medications try to consult a doctor. The diluted essential oil is recommended and perfectly safe.

The price of lavender essential oil

There are many brands available in the market. The prices range changes from different brands. Many buy it online to choose more options. Basically the brand depends upon factors such as quality, price, etc. The price of 100ml lavender essential costs approximately Rs. 700/- to Rs. 750/-

The conclusion to make money from lavender oil extraction business

Lavender oil can be a safe and effective product to use for hair and skin. This created opportunities for entrepreneurs to start the extraction of lavender oil. For many years this remedy is followed by adding it with creams and lotions. So, it is profitable to implement extracting lavender oil business and incur profits. If one does not compromise in the quality it is easy to be successful in this business. we wish good luck to make money from the extraction of lavender oil. If you want to save input costs, you can go for commercial Lavender Cultivation.

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