How much Investment is required starting Ayurvedic Manufacturing Company?

Ayurvedic manufacturing company is one of the most profitable businesses in current time. Increasing demand of ayurvedic and herbal products is creating new opportunities for existing Ayurvedic manufacturing Companies as well as for new ayurvedic start-ups.

Check out: How to start Ayurvedic Manufacturing Company?

In this article, we will cover up, how much investment you will require to start Ayurvedic manufacturing unit. Figures and estimates could change depend at locality and area where you are going to start your venture.

There are three types of investments required to start Ayurvedic Manufacturing Unit.
  • Fixed Capital Investment
  • Working Capital Investment
  • Investment for Inventory

Fixed Capital Investment:


Fixed capital investment is investment required for fixed assets like land, building, office, machinery, equipments, furnishing etc.

Fixed capital investment depends at many factors like:
  • Area and Location where you want to set up plant
  • Land Cost/Rent
  • Building construction cost/Furnishing in rented premises
  • Machinery and Equipment Cost
  • Other miscellaneous factors
If you have own land and building then fixed capital will be different than if you will start it in rented premises. If you want to purchase a land or building, land cost will vary depend at location and area of that particular land. If you have limited finance then you should start with rented premises.

Fixed Assets includes:
  • Land
  • Building
  • HVAC (Heating, Ventilation and Air Conditioning) System
  • Air lock System
  • Fitting and Furnishing
  • Machinery
  • Laboratory Equipments
  • Electricity Supply fitting
  • Water Supply System
  • Compressed Air Supply
  • Licenses and documentation expenses
  • Other requirements if any

Adding all these investments will produce fixed capital investment.


Working Capital investment:
Working Capital investment is required for liquid assets like salary, wages, paying bills, loan instalments, advertisement & promotion expenses etc. Working capital investment is required till a company/firm start to generate enough profit that is adequate for paying for all liquid assets.

Working capital investment depends at many factors like:
  • Rent of office or factory premises
  • Loan amount if any
  • Minimum wages given at that area to workers
  • Number of workers and staff
  • Salary of technical and educated staff
  • Marketing Budget
  • Cost of electricity, water and other services
  • Other miscellaneous factors
If you start at small level with one or two staff/workers then working capital will be less as compare to when you start at large scale. Area in which you are starting and if rent and other services is less then working capital will also be less in that case.

Liquid Assets includes:
  • Skilled and Technical Staff/Employee Salary
  • Non Skilled worker’s wages
  • Office/Factory rent if any
  • Maintenance expenses
  • Bank loan EMI if any
  • Marketing Budget
  • Monthly Bills
  • Other expenses if any
Working capital will vary every month/day/week. Some time it will be higher and some time it will be lesser depend at working conditions, environment, climate etc.
Estimation of all expenses requires running an organisation will be helpful in calculating working capital.


Investment for Inventory:
This investment is related to working capital investment but we are putting it separate of its major importance for timely delivery of product/services. Inventory investment is required for stocking raw material for manufacturing (i.e. active ingredients, excipients etc), packaging material, bottles etc.

Read related: How to maintain stock register?

Inventory investment depends at factors like:
  • Number of products you want to manufacture
  • Minimum quantity that could be purchased for each item required
  • Cost of each product
  • Other miscellaneous factors
After considering all above facts, you can calculate your inventory required for starting ayurvedic manufacturing company.

For any query and suggestion, mail us at pharmafranchiseehelp@gmail.com

Comments

Contact Form

Name

Email *

Message *

Popular posts from this blog

How to calculate Price to Retailer (PTR) and Price to Stockist (PTS) for an Ayurvedic Medicine Company’s Products?

How to sell Ayurvedic Medicines Online?

How to start Ayurvedic Manufacturing Unit/Company? (Also Covered Unani and Siddha Systems of Medicines)