How to Start a Dietary Supplement Company

Saturday, December 6, 2014

How to Start a Dietary Supplement Company

Dietary Supplement | Small Business Ideas

A dietary supplement is intended to provide nutrients that may otherwise not be consumed in sufficient quantities.

Supplements as generally understood include vitamins, minerals, fiber, fatty acids, or amino acids, among other substances. U.S. authorities define dietary supplements as foods, while elsewhere they may be classified as drugs or other products.

There are more than 50,000 dietary supplements available. More than half of the U.S. adult population (53% - 55%) consume dietary supplements with most common ones being multivitamins.

These products are not intended to prevent or treat any disease and in some circumstances are dangerous, according to the U.S. National Institutes of Health. For those who fail to consume a balanced diet, the agency says that certain supplements "may have value.

Dietary supplement sales exceeded $26 billion in 2009, according to the "Nutrition Business Journal." Concerns about health care and aging have led to increased sales in nutritional supplements, making it a viable business to start. Starting a dietary supplement company requires planning every aspect of your business from the types of supplements you want to sell to the market you want to sell them to.

Things You'll Need

Website Shopping cart application for all but the third option for sales

Types of dietary supplements:

There are many types of dietary supplements-

Vitamins

Vitamin is an organic compound required by an organism as a vital nutrient in limited amounts. An organic chemical compound (or related set of compounds) is called a vitamin when it cannot be synthesized in sufficient quantities by an organism, and must be obtained from the diet. Thus, the term is conditional both on the circumstances and on the particular organism. For example, ascorbic acid (vitamin C) is a vitamin for humans, but not for most other animals. Supplementation is important for the treatment of certain health problems but there is little evidence of benefit when used by those who are otherwise healthy.

Dietary element

Dietary elements, commonly called "dietary minerals" or "minerals", are the chemical elements required by living organisms, other than the four elements carbon, hydrogen,nitrogen, and oxygen present in common organic molecules. The term "dietary mineral" is archaic, as the substances it refers are chemical elements rather than actual minerals.

Herbal medicine

Herbal medicine is the use of plants for medicinal purposes. Plants have been the basis for medical treatments through much of human history, and such traditional medicine is still widely practiced today. Modern medicine recognizes herbalism as a form of alternative medicine, as the practice of herbalism is not strictly based on evidence gathered using the scientific method. Modern medicine, does, however, make use of many plant-derived compounds as the basis for evidence-tested pharmaceutical drugs, and phytotherapy works to apply modern standards of effectiveness testing to herbs and medicines that are derived from natural sources. The scope of herbal medicine is sometimes extended to include fungal and bee products, as well as minerals, shells and certain animal parts.

Amino acids and proteins

Amino acids are biologically important organic compounds composed of amine (-NH2) and carboxylic acid (-COOH) functional groups, along with a side-chain specific to each amino acid. The key elements of an amino acid are carbon, hydrogen, oxygen, and nitrogen, though other elements are found in the side-chains of certain amino acids.

Amino acids can be divided into three categories: essential amino acids, non-essential amino acids, and conditional amino acids. Essential amino acids cannot be made by the body, and must be supplied by food. Non-essential amino acids are made by the body from essential amino acids or in the normal breakdown of proteins. Conditional amino acids are usually not essential, except in times of illness, stress, or for someone challenged with a lifelong medical condition.

Essential fatty acids

Essential fatty acids, or EFAs, are fatty acids that humans and other animals must ingest because the body requires them for good health but cannot synthesize them. The term "essential fatty acid" refers to fatty acids required for biological processes but does not include the fats that only act as fuel.

Bodybuilding supplement

Bodybuilding supplements are dietary supplements commonly used by those involved in bodybuilding and athletics. Bodybuilding supplements may be used to replace meals, enhance weight gain, promote weight loss or improve athletic performance. Among the most widely used are vitamin supplements, protein, branched-chain amino acids (BCAA),glutamine, essential fatty acids, meal replacement products, creatine, weight loss products and testosterone boosters. Supplements are sold either as single ingredient preparations or in the form of "stacks" - proprietary blends of various supplements marketed as offering synergistic advantages. While many bodybuilding supplements are also consumed by the general public their salience and frequency of use may differ when used specifically by bodybuilders.

Instructions:

How To Get Started With Your Own Dietary Supplement Company

Write a business plan. The plan needs to outline all aspects of your dietary supplement company. Describe the uniqueness of your diet supplements and business strategy. Outline how you'll finance your supplement business as well as income projections.
Gather funding. You can fund your business start-up using money you already have or use your business plan to apply for a business loan through your local bank. Other potential sources of start-up funding include loans through your state or local small business development office or from dietary and nutritional industry associations.
Obtain needed permits and licenses. Contact your city or county business office to apply for a business license. Submit a doing-business-as statement with the county clerk's office if your dietary supplement company name is different from your given name. If your state charges sales tax, apply for a sales tax permit from your state's taxation or comptroller's office.
Apply for a merchant account with your local bank or a merchant account company so you can accept credit and debit card payments.
Decide if you want to supply products that are hand selected by you, inventory them yourself, have them drop-shipped by another company, or simply list affiliate links to products. Each of these methods has their own pros and cons.
Decide what types of dietary supplements you want to sell. Options include vitamins, diet and weight loss supplements and life-enhancing supplements such as those that help mental acuity, improve mood or prevent joint problems. Also decide if you want to sell pills, liquid or bar supplements and if you want them to be herbal or organic.
Decide where you will store inventory. If you only have a few dietary supplement products in your online store, you can store them in your home. Keep them in a dry, climate controlled area. The temperature you normally keep your house at is fine for most supplements. Do not store them in a garage or shed that does not have proper air temperature control and may be subject to condensation.
Find and contract with a supplement manufacturer or wholesale supplier. You can find companies through resources such as the ThomasNet or National Association of Wholesaler-Distributors.
A popular method of retailing online is making use of the various drop-shipping companies available to re-sellers. Choose a company that has a variety of dietary supplement products available and sign up with them as a seller. Develop a webpage listing all the products as if you had them on hand yourself. You are responsible for the sales and receipt of money from your customers, not the drop shipper, so make sure your shopping cart area is as secure as it would be for individual inventory and sales. When your customer orders a product and pays you for it, you pay the drop shipper, who sends out the product as if it came from you. This saves you on storage and shipping costs because you do not have to pay to have items shipped to you and then ship them out to the customer too.
The last form of online sales site for dietary supplement is an affiliate sales site. There are a variety of affiliate "warehouse" sites that host many products from a variety of companies, or you can choose individual products and see if the company that sells them offers affiliate profits. Select products from one or a variety of affiliate companies and place product descriptions and links to the affiliate on your own site. That is all you have to do. You are not responsible for keeping a shopping cart working, as visitors to your site will be taken to the affiliate page to make their purchase. You get a predetermined portion of the sales made from links on your site. This form of sales pays the least of the three options because there is little work on your part and no responsibility to the consumer beyond providing the link to click and marketing your website.Get traffic to your website by marketing and advertising through banner ads, forum and email links, articles and blog posts that you create with links to your sales page and any other method you find to effectively advertise your products. Regardless of which of the above methods you decide to employ for your product sales, if you do not have the customers coming to your website you won't make money. So the most important aspect of your dietary supplement company will be how effectively you market your website.
Establish your sales and distribution model. Viable options for dietary supplement sales and distribution include mail-order, e-commerce, direct sales, storefront or a combination of any of the above. Storefronts require renting space and equipment, which is more expensive than mail-order and e-commerce methods. If you choose mail-order or e-commerce, purchase packaging and labels to ship the supplements to customers.

Tips and Warnings:

Check your state and federal regulations regarding dietary supplement sales to insure you're complying with the laws.

Reference

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Easy Tips and Ideas to Start Business

Although anyone can start a business, many people fail because of a bad product or improper research. If you want to start your own business, you can improve your chances for success before you even begin. In order to make your business successful, start strong and make sure that your idea will hold out for the long haul.

Have a Good Product

Ensure that you plan to sell something useful. Although you may think that your product is important or special, that doesn't mean the general public will agree. Ask friends, family and strangers what they think of your product. If they don't seem that interested, ask them why. With their suggestions, you can either improve the product or scrap the idea completely. According to Brad Sugars of Entrepreneur magazine, most small businesses fail because they sold a product that didn't have an adequate market. This also applies to small businesses that provide a service. A lawn-care business might be useful for part of the year in a northern state, but it is in-demand year-round in the south. Consider whether people will actually want to use your service and get constructive advice from those not afraid to give their opinion.

Research Local Businesses

Research local companies before starting up your own business. This will not only give you an idea of the amount of competition you will have, but it will also help you price your product or service. If you're looking to start a wedding photography business, you may find during your research that the market is over-saturated in your area. If not over-saturated, you should contact each business and ask them for a price list. Alter your prices so you can stay competitive with the competition in town. Researching similar local businesses will also help you decide where to locate your business location. Try not to start up a store or office close to another business of your type. If your small business is located away from similar business types, this will cause locals to choose you over businesses that are farther away from where they live.

Get Professional Advice

You may know someone who has started their own successful business. Ask him for advice and listen to his stories of how he started his company. You may gain useful advice on the good and bad ways to start a business. Local entrepreneurs can also introduce you to local product providers or advertisers that you may not have met without their help. Accept any advice with open arms, especially if the advice is coming from someone successful in the area.

How to Calculate Business Start Up Costs

Starting a business in no easy endeavor. It takes a great deal of research, perseverance and hard work. While sweat equity will make your small business more successful, you will most likely need real capital to get the business started. Before you start raising capital and/or investing your own funds, the first thing you need to do is determine the total start-up costs.

Step 1

Determine your costs of sales. For most small businesses this means inventory, the cost of raw materials, manufacturing equipment, shipping, packaging, and warehousing. However, not all businesses sell products. In this case, the cost of sales is primarily the direct labor involved in making the sale. For example, to open a small shoe business entails purchasing enough inventory ($10,000) to stock the store.

Step 2

Determine professional fees. Planning your business structure, i.e., limited liability corporation or general partnership, means hiring an attorney. There may also be the need to pay an attorney for help with establishing trademarks, copyrights, and patents. In this scenario, that puts total professional fees at an estimated $20,000.

Step 3

Determine technology costs. Technology can greatly reduce the cost of labor for small business if used effectively. Most small businesses require computers, printers, cell phones, website development, Internet access, software applications, information security, data storage, and outsourced information technology (IT) consulting. If the cost of technology is $10,000 to start, add an additional $5,000 a year for maintenance (hint: maintenance is not included in start-up costs).

Step 4

Determine administrative costs. This varies with business types and may include items such as business insurance, office supplies, product packaging, parking, rent, express shipping, desks, chairs, fax machines, phones, or anything else necessary to operate the business daily. A good estimate for start-up administrative costs would be $5,000 for the first six months.

Step 5

Determine initial sales and marketing costs. Now that you have your product, you need to let folks know about it. Sales and marketing costs generally include marketing materials for presentations, printing stationery, business cards, advertising, trade show events, and public relations. These initial sales and marketing costs can add up to $3,000.

Step 6

Determine the wages and benefits needed to secure a staff. This includes employee salaries, benefits, workers compensation, and payroll taxes. Let's put the cost of wages and benefits estimated at $20,000 for the first three months of business.

Step 7

Add all costs associated with starting the business for a total. Be sure to only include business start-up costs that will be incurred in the first three to six months of operations. For this example, the calculation is: $10,000 + $20,000 + $10,000 + $5,000 + $3,000 + $20,000 = $68,000.

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Saturday, December 6, 2014