Are you interested in starting a small scale manufacturing business? Do you want to start a bottled water production company? Do you need a sample bottled water business plan template? Then below is an in-depth guide on how to start a bottled water company.
Bottled water can be defined as drinking water packaged in glass or plastic bottles; and this water can be either distilled water or spring water, or mineral water. Bottled water can come in two forms, which are:
- Carbonated water
- Non carbonated water
The sizes of the bottled water range from small single serving bottles to larger ones. Now establishing a bottled water company is probably one of the best business moves you would make especially if you intend doing business in a populated country. For those who are skeptical about this business, below are some reasons why you should start a water bottling plant.
5 Reasons Why You Should Start a Bottled Water Company
1. Water has an unshaken market demand
Water is always in demand because it is indispensable and everybody needs water to live. That’s the reason why the business is very lucrative.
2. A growing awareness in health consciousness
There is a growing increase in health consciousness now, as people are being watchful of what they eat and drink; so as to avoid ailments such as typhoid, cancer, obesity and also live longer. Thus creating a corresponding need for bottled water; especially bottled mineral water.
3. A growing awareness of the need to protect the environment
In my country Nigeria, one of the fastest selling products is sachet water; otherwise known as pure water. The reason why it is a fast selling product is because sachet water is cheaper especially when compared to bottled water. But I can authoritatively tell you that the era of sachet water may soon come to an end. Why? The reason I say this is because there is currently a proposed plan by the government of Nigeria to ban the production and selling of sachet water, polythene bags and its likes.
The aim of this yet-to-be implemented law is to combat the growing environmental degradation (drainage blockage) caused by these materials, since they are not bio-degradable. Once this proposed law is passed and implemented, there will be a sharp rise in the demand for bottled water. Rather than wait till that time, you can position yourself now to take advantage of any arising opportunity.
4. The profit margin is very high
Water, which is the most important raw material for bottled water production is readily available for free. Once a borehole is drilled and setup, you will have a steady supply of water. Other production materials can either be purchased in the marketplace or outsourced (Bottles and labels).
5. You will create employment for people
The process of producing bottled water is not a task for one person alone. You will have to employ people that will help you with tasks like cleaning the containers, operating the machines, distributing the bottled water, loading the distribution trucks or vans, etc.
How to Start a Bottled Water Production Company – Sample Business Plan Template
Before you can successfully get a bottled water business up and running, you need to find out what is really involved and what it takes to run such a business and this can only be achieved through a market research. Due to the complex nature of setting up a bottling water business, it is advisable you carry out your research alongside a consult or an expert in such field. The result of your research will determine the type of bottled water to produce; your location and your pricing strategy.
Based on your discoveries from the market research you carried out, you can then proceed to write a solid business plan that will contain a detail of how you plan to run your bottled water business. This is important especially when you intend to raise money from investors for the venture. As expected, your business plan should contain an executive summary, financial projections, marketing strategy, operations strategy, management team, legal details and location analysis.
- Cost of starting a bottled water production plant
The cost of starting a bottled water business varies with respect to location; cost of acquiring land and production scale. However, you should be able to get the project off the ground with an estimated $50,000 – $150,000 (N5,000,000 –
N 15,000,000). With respect to raising capital for the project, you can either apply for a bank loan, self finance the business or apply for equipment financing leases.
3. Obtain the necessary license and business permit
Obtaining a bottled water license depends on the country of your location so it is up to you to find out the one applicable in your country. For example, if you are located in the US, you will obtain your license from FDA (US Food and Drug Administration). In a country like Nigeria, you will obtain your license from NAFDAC (National Agency for Food and Drug Administration and Control). Study the rules and regulations for the type of water you will be producing and then go apply for a vendor’s license from your local county administration. Also obtain a permit from your state health department.
4. Find a bottle supplier
It is also important you find a suitable and reliable bottle production company that will supply you the glass or plastic bottles you need. Buy you must make sure that your supply company is a member of the International Bottled Water Association; you should also sign up for a membership with them.
The next step is to secure a building is a hygienic strategic location for your water bottling company. You must ensure you set up a separate area for offices and the production area. When choosing a good location for your water bottling plant, you should consider things such as nearness to marketplace, water availability, road accessibility, steady power supply, etc.
6. Purchase the necessary equipment
When it comes to buying the needed water bottling equipment, you can choose to acquire them on hired purchase or long term lease; especially if you don’t have sufficient. Example of equipment you need include:
- Alternative power supply (Generator set)
- Storage tanks
- Filling machines
- Water treatment machines and filters
- Bottle loaders
- Water sterilizers
- Water dispensers
- Trucks for distribution
7. Hire employees and commence operation
Bottling water is such a complex business that cannot be done by one person alone. You will need to hire and train employees to ensure an effective output and also to ensure the success of your business.
8 Marketing Ideas for a Bottled (Mineral) Water Production Company
- Don’t just take your product to the market, organize a product launch. This will create the initial brand awareness you need
- Be careful in the selection of a product design and package for your bottles
- Choose a memorable name for your bottled water
- Talk to retailers and encourage them to carry your products
- Advertising your product on mass media
- Connect with your potential customers on social media
- Engage in billboard or outdoor advertising. But ensure the billboards are in strategic locations such as highways, commercial areas, etc
- Give away your business cards to as many people as you can; at any given opportunity
6 Challenges of Starting a Bottled (Mineral) Water Company
- Setting up a bottled water plant is capital intensive, as you would need to rent a large space or building for production, purchase heavy machines, etc.
- The cost of maintenance and repairs for the machines you will be using is quite high.
- You will need a few technically inclined employees like a production supervisor, production manager, facility maintenance personnel, machine operators, etc and training these set of individuals for the job role is quite expensive.
- You will also have to deal with poor power supply especially when you are doing business in an under developed or developing country. This will definitely increase your operating expenses as you would have to provide your own power supply using a power generating set.
- Getting the appropriate license is quite a herculean task due to the stringent terms and conditions you must meet. You will also need to maintain a high standard of hygiene as the health officials may bump in at anytime for inspection.
- The water bottling business is sometimes affected by seasonal changes, so you should be prepared to experience a drastic decline in sales especially during the rainy season or winter. This is because people consume less water during this seasons.