Do you want to start a bottle water company and you want to know the cost? If YES, here is an estimated cost breakdown to build and open a bottle water plant. One of the reasons why entrepreneurs back down from starting the business of their choice is the financial implications needed to start the business.
One good thing about starting a bottled water production business is that you have the options of starting it on a small scale servicing a small community, or on a medium or large scale with a wide range of distribution networks that cuts across different cities and states in the country. You can also plan for alternative sources of funding in case you do not have adequate capital.
Estimated Cost Breakdown to Open a Bottled Water Production Company
Basically, starting a standard bottled water production company is indeed a capital intensive business. This is so because the amount required to set – up a bottled water production plant is not a piecemeal. The bulk of the start – up capital will be sent on leasing or acquiring a facility and also in purchasing water purifying machines, bottling, and packaging equipment.
Aside from that, you are not expected to spend much except for purchase and servicing of distribution trucks, paying of your employees and utility bills. This is the key areas where you will spend your start – up capital;
- The Total Fee for Registering the Business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $1,300.
- Marketing promotion expenses for the grand opening the Bottled Water Production Company in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580.
- Cost for hiring Business Consultant – $2,500.
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- Cost for payment of rent for 12 month at $1.76 per square feet in the total amount of $105,600.
- Cost for construction of a standard bottled water production plant – $100,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
- The cost for Start-up inventory (raw materials, bottles and packaging materials et al) – $80,000
- Storage hardware (bins, rack, shelves, food case) – $3,720
- The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
- Cost for water purifying, bottling and packaging equipment – $100,000
- Cost for store equipment (cash register, security, ventilation, signage) – $13,750
- Cost of purchase of distribution vans – $100,000
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, Fax Machines, tables and chairs et al) – $4,000.
- The cost of Launching a Website – $600
- The cost for your opening party – $10,000
- Miscellaneous – $10,000
Going by the report from the research and feasibility studies, you will need about $500,000 U.S. Dollars to set up a small scale bottle water production company in the United States of America.
You will need over $1.5 Million U.S. dollars to successfully set – up a medium scale bottle water company in the United States. If you are considering starting a large bottle water production company with several distribution networks servicing several cities, then you should look towards budgeting well over $5 million United States dollars.
Let’s take a look at some of the tools and equipment you would need, the general market prices of these equipment’s and other factors that determine the cost of setting up a bottle water plant-:
Factors That Determine How Much It Will Cost to Build and Open a Water Bottling Plant
1. Business Plan
A detailed business plan is the most important tool that you would need to start your business. It would give you a clear idea of what you want to achieve and just how much capital and skills you need to achieve this.
A bottle water business plan would cost you anywhere from $0 if you write it yourself, to $1,000 if you are hiring a professional to perform a full scale feasibility study, market research and business plan writing. However, it is advisable for you to choose the most cost effective means to avoid incurring excessive expenses.
2. Registration of business
You would also need to register your Business Name, obtain a bottled water production business license and maybe incorporate your company. Amounts needed to do this varies country by country and you may also need to pay a lawyer to handle the business registration on your behalf but a good sum to budget for this expense is $1,000.
3. Registration with health regulatory agencies
For those in the united states of America, the FDA is the government agency that is responsible for giving out licenses for food and water related businesses. Again, you can budget between $1,000 and $2,000 for this expense.
Depending on how much financial resource at your disposal, you may decide to build your own bottled water factory or rent out a space but if you decide to rent, you must ensure that the facility is neat and conducive and not shared with any residential building. Depending on your country, any amount between $1,000 and $5,000 would be sufficient to cover this cost.
5. Water supply
You would need a good source of water supply. This is also dependent on the type of water you plan to be producing. If you choose to produce spring water, then you would need to locate your production facility very close to a natural spring and look for a way to transfer the water from the spring to be water bottling plant to be bottled immediately at source.
For other types of water, you may need to dig a borehole, a well or use a public water source. A good amount to set aside for this expense is $2,500. Again, this is dependent on your country and your specific needs.
6. Water bottling plant
You can import an automatic water bottling plant from China for between ,000 and ,000. This would be used to package the water without stress.
7. Generating set/power supply
You may also need an alternative source of power to guarantee access to water supply especially if you are setting up in a developing country where power supply is not constant. You should also consider cheaper sources of power like solar or wind energy to save energy costs in the long run.
8. Water treatment plant
You would also need to figure out how to make the water cleaner and safe for drinking without giving it a bad taste or excessively stripping it of its natural minerals. A water treatment plant would cost you about $1,000- $10,000 to set up, depending on size and functions.
9. Mineral injection facility
Since some water treatment processes strip water of its natural minerals, most bottled water companies look for a means of injecting the minerals back into the water artificially. Again, this may cost you about a thousand dollars.
10. Automatic bottle washers
To ensure that your water is produced under clean and highly hygienic conditions, it is advisable for you to invest in automatic bottle washers which would be used to clean the bottles prior to packaging water in them in order to get rid of chemicals and all forms of impurities.
You would also need to spend some money on labels for your bottles. You can get someone to make the labels for you easily. You should budget about $100-$300 for the first batch, depending on how many bottles you want to roll out.
12. Distribution trucks
Another very important asset that you would need is a truck for distributing your products. You can buy a fairly used truck if you cannot afford a new one but make sure it is branded with your company name and logo and is kept clean ad covered at all times.
You would also need some consumable items like bottles, caps, wrapping sheets, P.E films and packaging supplies.
14. Marketing and promotional materials
Of course, you would need to promote your brand so it is important that you add up costs of advertising your water brand, costs of printing flyers and business cards and costs of other promotional materials and activities.
You would definitely need to staff to successfully run your business. You would need machine operators, people to pack and upload produced water, clerical staff, maintenance officers, drivers and marketers.
16. A website
Getting a website for your bottled water production business is not a bad idea either. It would help you to increase awareness for your products and also make your customers have access to you and learn why your own brand of bottled water is the best option for them.
Financing your Bottled Water Plant
It is often said that money is the blood of any business. No doubt raising start – up capital is perhaps one of the major concerns for entrepreneurs; it can be challenging raising capital to launch a business idea. Your idea must be workable and promising for you to secure finance from financial institutions or from angel investors.
The first thing to put in place before sourcing for start – up capital for your business is to draft a detailed business plan. With a good business plan, you can easily convince investors to invest in your business. The truth is that no bank can give you a loan if you don’t have a good and workable business plan.
Besides, investors will not take you seriously if you don’t have a business plan on ground before launching out to source for start – up capital. There are several options when it comes to raising money to finance a start – up business. Some of the options are;
- Raising money from personal savings and sale of personal stocks
- Raising money from investors and business partners
- Applying for loan from the bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Sourcing for soft loans from family members and friends.