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  1. #1

    Default What is the normal amount to spend in R and D?

    Just asking this so I can "do the normal thing" and feel "normal" about it. I am afraid to order the materials for my new perfume. It's been a while since I marketed a perfume. 114 ingredients in the formula, and another 60-70 alternate candidates in the palette to consider. Lots of naturals, maybe half, so of course I won't feel right unless I evaluate 3-4 varieties of the naturals (abs vs EO vs CO2, etc).

    So I'm looking at maybe a few thousand dollars just to do the R&D and get a sample together? I haven't yet added it all up.

    Is this normal? What is a reasonable amount to spend in this stage? What do you budget for? Is there a typical job? What is the normal number of ingredients, in a perfume and to get for R&D.

    I already have someone interested in helping me market this, and he made me a reasonable income last time. So I doubt it will be a complete bust. I have confidence I can make it be good. But I'm just afraid to drop so much money. Being almost paralyzed by fear is very poor business.

    What I'm looking for is some sense of what is normal.
    Last edited by DrSmellThis; 11th May 2014 at 08:44 AM.

  2. #2

    Default Re: What is the normal amount to spend in R and D?

    I can't name any figures regarding this special undertaking. But from my entrepreneurial experience I can say: whenever you need to make an investment to realise a project, don't limit yourself by financial worries. Especially since you are confident about it. Restriction (that is perceived as restriction) on the pecuniary side will also restrict and undermine your creativity.
    Or you approach it from another ankle and see how much you can get out of a limited range of material. Say, how gorgeous can a fragrance be only made of 50 ingredients or so. Then it's more a challenge than a constraint.
    Our greatest evils flow from ourselves. Jean-Jacques Rousseau

  3. #3

    Default Re: What is the normal amount to spend in R and D?

    Really, I do think that some simplification could be brought, as part of what Graphite says. I'd pick some keys, whether the parameter is choice of several materials, direction, or budget - - pick those keys first, spend your time and money there, first. The rest isn't so necessary to have every single variation possible to make choices... Surely you will have to pick some of those options...

    But simplification and prioritization would bring focus for you, and bring some costs down.

    HOWEVER>>> I can't emphasize strongly enough the importance of "Play".

    Play must be allowed so that you find things that you didn't expect. And have FUN!

    :-)

    PK
    Paul Kiler
    PK Perfumes
    http://www.PKPERFUMES.com
    Gold Medal for "Best Aroma"; Los Angeles Artisan Fragrance Salon

  4. #4

    Default Re: What is the normal amount to spend in R and D?

    Having read this I would say under no circumstances at all do you spend what you do not have, only spend what you can afford to comfortably write off. Thinking big is great, playing big is entirely different so honestly I would urge small steps. It's so easy to say to anyone go for it, spend your money, aim for the stars....because its not their money. Small steps DrSmellThis, at a pace that is right, comfortable and enjoyable for you.

  5. #5

    Default Re: What is the normal amount to spend in R and D?

    Quote Originally Posted by HermitageOils View Post
    ... Small steps DrSmellThis, at a pace that is right, comfortable and enjoyable for you.
    Sound advice.

    I didn't understand it that way DrSmellThis is about to spend money he doesn't have. Which I would never recommend.

    I remember when I had to travel more frequently and wanted to buy a nice and handy suitcase. I talked with a friend about the pros and cons of different models and was unsure which one to take. He said: choose the one that brings you the most joy.
    Still I stick to this rule and it hardly always means spending more money. It's more like a compass that leads me in the right direction; the one that suits me best.
    Our greatest evils flow from ourselves. Jean-Jacques Rousseau

  6. #6

    Default Re: What is the normal amount to spend in R and D?

    It seems to depend where you are in the world. Thinking small does not necessarily mean economy.

    I have a great amount of empathy with this OP. I was in a similar boat fairly recently. The necessary production costs just paralysed the project entirely.

    Here is my UK tale of a nice small project. I designed a range of eight scents for our local garden centre to sell in a small set of minis. The set was to be marketed at the existing customers who already attended their gift shop, so a fairly simple range to match their eight gardens on display. I was very pleased with my perfume designs and had confidence that they would be a good thing to sell. The centre were very pleased and they wanted them there.

    We were probably talking about no more than 20 boxed sets of mini perfumes to begin with, just to test the reception of them. These would probably have retailed at under 20 for this tiny set because it is a small garden centre in a small village. Thus the project began and I was as happy as Larry. I intended to make them up myself, box them, and take them there. They would then sell them and everyone was to be happy. Not so…

    Even after all the hard but delightful work with R&D……

    The EU regs meant that for every perfume, it costs to get the ingredients checked by a professional body. It seems in this country perfumers are not trusted to obey the rules without being checked. The aspect of being checked is fine, but being charged for it is another. So there we have a starting cost for this particular eight perfumes project of a few thousand before we even begin with actual production.

    Then there are the ingredients, the bottles, labels and the packaging. Basic lowest order quantities from various companies meant that the costs were in the region of another quite a few more thousands for these things. All basic, nothing too fancy.

    I decided to get an external quote to ensure that if for any reason this project took off, then there was the basic structure in place because I am an artisan and only able to make a limited number. The company involved needed to keep a certain quite large stock of the base for each perfume and also to charge for each.

    The total costs ended up being in the region of tens of thousands++ depending on ingredients before even beginning the project and not for that many to be made. We didn't want to sell huge quantities, so the production costs were never going to be realised let alone break even. Unless I was really missing something. It appeared that an artisan has huge costs here in the UK before any production can take place.

    This garden centre was only going to sell a few a week, at best. It just isn't economic to make perfume for them at all unless I ignore all the EU rules and make them myself. I would dearly love to do that, but here this is not allowed, unless it is a private deal. Selling artisan perfumes in a shop is seemingly not allowed without these rules and associated costs. Project aborted rather sadly. I cannot see a way through. It seems that in other countries either the perfumers do not have these rules, or they have, and are fearfully rich and don't care.

    I saw an article in a newspaper recently saying the UK were lagging behind the rest of the world in entrepreneurs……. any clues as to why????

  7. #7

    Default Re: What is the normal amount to spend in R and D?

    Won't this project take a coue of months to complete? You could prioritize and work incrementally by ordering more things each time.. And maybe always add some wild cards to each order to keep yourself inspired..

    Or use Kickstarter

  8. #8

    Default Re: What is the normal amount to spend in R and D?

    Loving the level of nitty gritty thoughts in this thread. Nothing worth doing is easy to do. Priorities.

  9. #9

    Default Re: What is the normal amount to spend in R and D?

    Too right…. However many better ideas are spawned of difficulties.

  10. #10

    Default Re: What is the normal amount to spend in R and D?

    Hello Mumsy,
    I have read your posts with great interest over the past few years, I am a big fan of yours, learned a lot from your informative posts and have much respect for you.
    Reading your comments I have a suggestion if I may. You are extremely creative and I wonder if you have ever considered offering your lilac materials and tinctures for sale - in biggish quantities? I believe you would have a market for such materials. If the numbers worked I for one would love to buy from you for Hermitage and assure you the spend and long term potential of such an account would be far greater than a garden centre as nice as it may be. Adam

  11. #11

    Default Re: What is the normal amount to spend in R and D?

    A very entertaining thought......

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