Are you interested in starting an agriculture related business? Do you want to become your own boss? If you answered yes to these questions, then you should consider starting an irrigation business in your city.
If you intend starting this type of business, it is advisable to first look at the existing laws and zonal regulations in the country or state you reside in to know what is expected of you. You would need to pay a visit to regulatory bodies in your country to get information on what you need to do before you can legally open your irrigation business.
You can start your irrigation business from a small town in the United States and if you are good at what you do, it won’t be too long before your brand becomes a nationally recognized brand especially if you go into franchising.
Steps to Starting an Irrigation Business
1. Understand the Industry
Irrigation is the process of applying controlled amounts of water to plants at needed intervals. Irrigation helps to grow agricultural crops, maintain landscapes, and revegetate disturbed soils in dry areas and during periods of less than average rainfall.
Irrigation also has other uses in crop production, including frost protection, suppressing weed growth in grain fields and preventing soil consolidation.
Establishments in the Water Supply and Irrigation Systems industry sell water as a public utility to farms, households, businesses and public entities throughout the United States. Water supply and irrigation business has performed well over the decade.
Population growth, as well as occurrence of drought and other hostile weather conditions, have indeed increased demand for water supplied by industry operators.
Going forward, per capita water consumption is projected to decline, as increasing concerns regarding water conservation drive policy aimed at reducing consumption. Nonetheless, while per capita consumption rates are expected to depreciate, cumulative water consumption is projected to expand as the population and economy grow.
The Water Supply and Irrigation Systems industry is a thriving sector of the economy of the United States of America and they generate over $79 billion annually from more than 59,123 registered and licensed water supply and irrigation companies scattered all around the United States of America. The industry is responsible for the employment of over 246,579 people.
Experts project the Water Supply and Irrigation Systems industry to grow at a 5.6 percent annual rate between 2015 and 2022. American Water Works Company Inc. has the lion market share of the available market in the United States of America.
A recent report published by IBISWorld shows that the Water Supply and Irrigation Systems industry has performed well over the past five years.
Despite more efficient use of water, population growth, droughts and other adverse weather conditions have increased demand for water supplied by industry operators. Additionally, economic growth has expanded water demand from downstream commercial and industrial customers.
Higher business activity has increased the amount of water demanded from retailers, restaurants and other commercial customers for provision to their customers and employees. However, industry revenue growth has been curtailed as a result of the COVID-19 (coronavirus) outbreak, causing revenue to decline 5.6% alone and annualized revenue to contract over the five years.
In summary, water supply and irrigation system business is a profitable industry and it is open for any aspiring entrepreneur to come in and establish their business; you can choose to start on a small scale servicing a small farming community or you can choose to start on a large scale with several outlets in different farming communities.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who contract irrigation companies goes beyond commercial crop farmers whose farms are located in drought prone areas without easy access to water. This is so because irrigation systems are also used for cooling livestock, dust suppression, disposal of sewage, and in mining.
So, if you are thinking of opening your own irrigation business then you should make target farming communities where there are perennial drought and difficulty in accessing water. It should include all commercial and small – scale farmers (both livestock and crops) and sewage disposing companies and mining companies.
3. Decide Which Niche to Concentrate On
Interestingly, there are several methods of irrigation or better still, niche ideas. They vary in how the water is supplied to the plants. The goal is to apply the water to the plants as uniformly as possible, so that each plant has the amount of water it needs, not too much nor too little.
In essence, if you are looking towards starting an irrigation company, you may decide to specialize in one or more of the following niche ideas;
- Surface irrigation
- Drip irrigation
- Sprinkler irrigation
- Lawn sprinkler systems
- Subsurface Textile Irrigation (SSTI)
The Level of Competition in the Industry
The competitions that exist in the irrigation line of business goes beyond competitions amongst irrigation systems in your location; you are expected to compete with water supply companies and any other individual farmers that decide to drill their own boreholes. Thus, it will be right to say the competition in the irrigation system is tough.
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure you always have a wide variety of techniques as it relates to irrigations; you can deliver excellent customer care services and you know how to attract and reach out to your target market.
There are several irrigation systems companies scattered all around the United States. So, if you choose to start your own irrigation system in the United States, you will definitely meet stiff competition. Besides, there are larger irrigation brands such as American Water Works Company Inc., Essential Utilities Inc., California Water Service Group, and American States Water Company that determine the trends in the industry and you should be ready to compete with them for customers.
4. Know Your Major Competitors in the Industry
Here are some of the most popular irrigation companies in the United States of America;
- The Imagination Factory Ltd
- Advanced Cooling Technologies, Inc.
- The Toro Company
- AMIAD Water Systems LTD
- California Safe Soil
- Upstream Tech
- Smart Farm Systems
- American Water Works Company Inc.
- Essential Utilities Inc.
- California Water Service Group
- American States Water Company
If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Irrigation is not a green business, as a matter of fact; the earliest agricultural irrigation canal system known in the present-day United States dates to between 1200 B.C. and 800 B.C. and you will come across several irrigation companies when you drive through town. So, if you are mapping out your economic and cost analysis, you should carry out thorough market survey and costing of the amount required to rent an office space and the amount required to purchase all the needed equipment, and also cost to successfully run the business.
5. Decide Whether to Buy a Franchise or Start from Scratch
There are no hard and fast rules when it comes to choosing how you intend starting a business. Basically, you should be guided by your overall business vision and mission statement.
When it comes to starting a business of this nature, it will pay you to buy the franchise of a successful irrigation brand as against starting from the scratch. Even though it is relatively expensive to buy the franchise of an established irrigation company, but it will definitely pay you in the long run.
But if you truly want to build your own brand, after you must have proved your worth in the industry, then you might just want to start your own company from the scratch. The truth is that it will pay you in the long run to start your irrigation company from the scratch. Starting from the scratch will afford you the opportunity to conduct thorough market survey and feasibility studies.
Please note that most of the big and successful irrigation companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own irrigation company today, one of the major challenges you are likely going to face is the presence of well – established irrigation companies. The only way to avoid this challenge is to create your own market.
Some other challenges and threats that you are likely going to face are economic downturn, heavy rains and unfavorable government policies.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Generally, you have the options of either choosing a general partnership, limited liability company which is commonly called an LLC, or a sole proprietorship for your business. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale irrigation company especially if you are just starting out with a moderate startup capital in a small neighborhood. But people prefer limited liability Company for obvious reasons. As a matter of fact, if your intention is to grow the business and have chains of irrigation companies across the United States of America via franchising, then choosing sole proprietorship is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
8. Choose a Catchy Business Name
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.
Here are some of the basic insurance policies that you should consider purchasing if you want to start your own irrigation system in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Risk Insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own irrigation company, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successful run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
When it comes to operating an irrigation company, you do not need to have any formal training or special certification before you can be allowed to open and operate an irrigation system in the United States of America. All you need is formal training that will expose you to the in and out of constructing different types of irrigation systems.
On the other hand, if you come across any form of certification that can aid you to conduct your irrigation company properly, then by all means try and pursue such certification.
12. Get the Necessary Legal Documents You Need to Operate
It is a fact that you cannot successfully run any business in the United States without the proper documentation. If you do, it won’t be too long before the long hands of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own business in the United States of America;
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
13. Raise the Needed Startup Capital
Starting an irrigation company can be cost effective especially if you choose to start on a small scale. Securing a standard and well – positioned office facility and purchasing a wide variety of sprinklers, pipes and other irrigation equipment and accessories are part of what will consume a large chunk of your startup capital. If you choose to start the business on a large scale, you would need to source for fund to finance the business.
No doubt when it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your irrigation system company;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for loan from your bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends.
14. Choose a Suitable Location for your Business
When it comes to choosing a location for your irrigation system company, the rule of thumb is that, you should be guided by the demand for water supply and easy access to a farming community in a drought prone area. Of course, if you are able to secure a central location for your irrigation company, it will give people easy access to locate your office.
It cannot be overemphasized that the location you chose to open your irrigation system company is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people and businesses with the require purchasing power and lifestyle. If you make the mistake of renting or leasing a facility in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business.
It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget. If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your irrigation system company.
Most importantly, before choosing a location for your irrigation system company, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.
These are some of the key factors that you should consider before choosing a location for your irrigation system company;
- The climatic condition of the location
- The demand for water supply in the location
- The purchasing power of farmers in the location
- Accessibility of the location
- The number of irrigation systems companies, and water suppliers in the location
- The local laws and regulations in the community / state
- Traffic, parking and security et al
15. Hire Employees for your Technical and Manpower Needs
The special technology or equipment needed to run this type of business are sprinklers, nozzles, pumps, pipes and other plumbing accessories, trucks and borehole drilling equipment and of course computers, receipt issuing machines, Point of Sale Machines, and CCTV Cameras. Also, you will definitely need office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
As regards leasing or outright purchase of an office and storage facility, the choice is dependent on your financial standings, but the truth is that to be on the safe side, it is advisable to start off with a short-term rent/lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location / facility for such business.
When it comes to hiring employees for a standard irrigation system company, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Project Manager, Civil Engineers, Borehole Drillers, Account and Sales and Marketing Office. On the average, you will need a minimum of 5 to 15 key staff members to run a small – scale but standard irrigation system company.
The Service Delivery Process of the Business
When it comes to the business services process of an irrigation company, there are no hard and fast rules about it. Basically, it is the duty of the marketing and sales officer to source for contract from farmers who don’t have access to robust rainfall.
Once the contract is secured and the initial deposit made, the project manager leads the project team to the site to construct the irrigation system to meet with the expected standard. If the project is completed, they get paid their balance.
It is important to state that an irrigation company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility.
16. Write a Marketing Plan Packed with ideas & Strategies
The fact that the entry barrier for starting a small – scale irrigation system business is not too high means that there are bound to be more players in the industry. In essence, you must come up with unique marketing strategies if you must carve out a market for yourself within the available market in your community.
So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience, it is important to clearly state what you have been able to achieve in time past. This will help boost your chances in the market place when marketing your irrigation system services.
Here are some of the platforms you can utilize to market your irrigation system services;
- Introduce your irrigation system company by sending introductory letters alongside your catalog to commercial and small – scale farmers (both livestock and crops) and sewage disposing companies and mining companies and key stake holders in and around the location where your irrigation system company is located
- Print out fliers and business cards and strategically drop them in offices, libraries, public facilities and train stations et al.
- Making your first impression count positively to those that patronize your irrigation services for the first time
- Make use of attractive hand bills to create awareness and also to give direction to your office
- Advertise your services in community – based newspapers, local TV and radio stations
- List your business and products on yellow pages ads (local directories)
- Leverage on the internet to promote your irrigation system company
- Engage in direct marketing and sales
- Encourage the use of word of mouth marketing (referrals)
- Leverage on the internet to promote your irrigation system company (when you blog regularly on key issues as it relates to your business, people who consider you an expert in the field)
- Join local chambers of commerce and industries around you with the main aim of networking and marketing your irrigation system; you are likely going to get referrals from such networks.
- Engage the services of marketing executives and business developers to carry out direct marketing for you
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you construct irrigation systems at rock bottom prices is to purchase your tools and equipment directly from manufacturers in pretty large quantities. The truth is the higher the quantity of items that you purchase directly from wholesalers, the cheaper you tend to get them.
Another strategy that will help you construct irrigation system at the right price is to ensure that you cut operational cost to the barest minimum, channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives and also purchase.
So also, if you are able to secure business partnership as it relates to getting referrals, then you will be able to get the right pricing and of course maximize profits from your business.
18. Develop Iron-clad Competitive Strategies to Help You Win
The availability of different types of irrigation system techniques, your business process and of course your pricing model et al are part of what you need to stay competitive in the industry.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust clientele base. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your services can favorably compete with the some of the best in the industry.
19. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your products and service delivery, they can hardly source for alternative service providers.
If your services and customer service fluctuate, you are likely going to struggle to get your customers retaining your services. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also attract new customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).
20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not conscious about boosting your brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend good money to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand and create a corporate identity for your irrigation system;
- Place adverts on both print (newspapers and agriculture related magazines) and electronic media platforms
- Sponsor relevant community – based events
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your irrigation system company
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your irrigation system company
- Distribute your fliers and handbills in target areas
- List your irrigation system business in local directories / yellow pages
- Advertise your irrigation system company in your official website and employ strategies that will help you pull traffic to the site
- Position our Flexi Banners at strategic positions in the location where your irrigation system company is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles are branded with your company logo.