Do you want to start a bottled water company? If YES, here is a 20-step guide on how to start a bottled water business with no money and no experience.
This is no doubt a very lucrative industry that can make one a millionaire if all things work together for good. Bottled water is one commodity that is consumed in all parts of the world and of course those that are in the business of producing bottled water are known to generate sales year in year out if the business is well – managed.
As a matter of fact, economic downturn hardly affects the consumption of bottled water simply because it is a commodity that is as important as the air we breathe in. Production companies in the bottled water industry basically purify bottled water into plastic and glass bottles for consumption.
The bottled water are properly capped and labeled accordingly before being sold to the general public. Companies in this industry usually have an assortment of water offerings, such as spring water, mineral water, sparkling water and flavored water in a range of sizes and prizes.
Players in this industry are also involved in the manufacturing of ice. It is common to find big corporations who are into production of soft drinks and food and beverages engage in the production of bottled water.
Basically what most standard bottled water production companies rely on to increase sales cum revenue generation is robust distribution network within their coverage areas; retailers, restaurants, sports clubs and hotels et al are some of the key business entities that you should partner with if you want to do pretty well in this line of business.
Steps to Starting a Bottled Water Company
Table of Content
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide What Niche to Concentrate On
- 4. Know the Major Competitors in the Industry
- 5. Decide Whether to Buy a Franchise or Start from Scratch
- 7. Writing a Business Plan
- 8. Prepare a Detailed Cost Analysis
- 11. Get the Necessary Professional Certification
- 12. Get the Necessary Legal Documents You Need to Operate
- 14. Choose a Suitable Location for your Business
- 15. Hire Employees for your Technical and Manpower Needs
- 16. Write a Marketing Plan Packed With ideas & Strategies
1. Understand the Industry
Research conducted by IBIS World shows that in the United States of America, the level of concentration in the Bottled Water Production industry is modest, as the top four players are expected to generate 65.5 percent of revenue.
Given the heavy bulk weight of industry products and the relatively low value per unit sold, bottled water production is generally taken on by large companies with major economies of scale and heavy investments in transportation.
While the majority of bottled water production is performed as one of many activities within the corporate portfolios of international food and beverage companies, the remaining portion of the industry’s production is performed through small-sized local players.
Interesting Statistics About the Industry
The Bottled Water Production industry is a thriving sector of the economy of the United States of America and they generates a whooping sum of well over $5 billion annually from more than 565 registered and licensed bottle water production companies scattered all around the United States of America.
The industry is responsible for the employment of well over 14,360 people. Experts project the bottle water production industry to grow at a 4.0 percent annual rate. The Coca Cola Company, Nestle and Pepsi Co are the world leaders in the bottled water industry; they have the lion market share in the United States of America and in most countries of the world.
Despite the fact that there are big corporations who are into the production of bottled water, the fact remains that starting a small scale bottled water production business has minimal barriers to entry, with low start – up capital. Most players in the bottled water production industry are small- to medium-size establishments that cater to the local community.
With this kind of business, if you want to start on a small scale, you can choose to start servicing your local community. All you would need is contacts, packaging, networking and good marketing and customer service skills. However, if you intend starting it on a large scale, then you should consider spreading beyond your local community to state level and even national level.
Some of the factors and incentives that encourages aspiring entrepreneurs to venture into starting a bottled water production company is the fact that the required amount needed to start the business especially when you choose to start a small scale servicing a small community is not on the high side compared to other small scale businesses.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic compositions for those who consume bottled water is all encompassing. This is so because there are no human on the face of the earth that does not drink clean and portable water.
So as a bottled water production company, your target market should cut across people of different financial standings, culture, religion, race and age et al. All you need to do is to ensure that your bottled water is packaged is affordable and packaged in different sizes and of course different prices. With that you will be able to appeal to all your target market.
3. Decide What Niche to Concentrate On
Basically, there are no niche areas in the bottled water production industry simply because bottled water are expected to meet same standard in any part of the world hence the industry is strictly regulated.
On the other hand, bottled water production companies are known to continue to improvise so as to continue to expand their market reach which is why it is now easier to find flavored bottled water, mineral bottled water, distilled bottled water, sparkling bottled water, bottled water with low PH value and bottled water packaged in different sizes et al.
As a matter of fact, most bottled water production companies are not left out when it comes to producing water that are dispense via water dispensers.
The Level of Competition in the Industry
There are only a few businesses that lack competition. One of the good things about competition is the fact that it helps one sit up and rise up to the challenges there are. There is hardly any industry or line of business anywhere in the world where there is no competition, as a matter of fact, it is competition that brings creativity and innovations in the business world.
This goes to show that if you are looking towards starting a bottled water production company, then you should brace – up for competitions in the industry. The truth is that you are not expected to compete amongst bottled water production companies in your city, but also international and world class corporations such as The Coca Cola Company, Pepsi Co and Nestle et al.
Most bottled water company are leveraging on creativity in terms of packaging and marketing to continue to stay afloat in the industry. One creativity approach that is common is ensuring that their bottled water conforms to the appropriate PH – level.
As a matter of fact it is common to find bottled water production companies especially medium scale and small scale bottled water companies specially labeling their bottled water for specific occasions to meet the demand of their clients. For example, a client that is celebrating his or her birthday may strike an agreement with a bottled water company to specially label the bottled water that will be served in the occasion to conform with the occasion.
No doubt, the fact that there is stiffer competition in the bottled water production industry is not hampering the performance of new entrants; most of them know how to recreate and re – strategize to reach out or attract more customers.
4. Know the Major Competitors in the Industry
In every industry, it isn’t new that there are brands that are way ahead of others. This can be attributed to their long staying power, amongst other things. It is important to state that there are larger corporations who are into bottled water production and also there are medium scale and small scale business that are also into bottled water production.
This is so because the market is open for all to participate in. Here are some of the leading brands in the bottled water production industry in the United States of America;
- The Coca Cola Company
- Nestle (Nestle Pure Life)
- Pepsi Co. (Aquafina)
- Fiji Water
- Voss Artesian Water
- Smart Water
- Arrowhead Mountain Spring Water
- Ice Mountain Natural Spring Water
- Deer Park Natural Spring Water
Starting a bottled water production company can’t be said to be a difficult business venture but at the same time, it is a business that requires thorough economic analysis – feasibility studies and market survey et al if you are looking towards making profits in the industry.
Part of what you need to focus on in this line of business is how to build a standard water purification and packaging plant, a robust distribution networks, branding and of course how to maintain your machinery and equipment and to take care of your overhead before your business breakeven. Other cost that should be considered during planning and budgeting are supply of packaging materials, and fuel and maintenance costs et al.
Lastly, there are a number of permits that are required to run a bottled water production company in the United State of America, and of course there are also public health codes to observe.
5. Decide Whether to Buy a Franchise or Start from Scratch
Good enough bottled water production business is one of those businesses that sell franchise; brands that have gained huge market leverage can successfully sell their franchise. Any aspiring entrepreneur who is considering starting a bottled water production business has the option of either starting from the scratch, buying an existing bottle water plant or buy a franchise franchise.
There are loads of factors that should be considered before choosing the option to follow. Some of the factors to consider are the cost of starting from the scratch or buying a franchise, your financial capacity, your vision, and your business skills and experience. Here is a list of bottled water franchise opportunities and that of mineral bottled water.
If your intention of starting a bottled water production business is to grow beyond one city, if you want to have presence in key cities in the United States and Canada, then starting your bottled water production company from the scratch is your best option.
But if you just want to start a business with the aim of just making profits and you don’t have the required finance and experience to build a business from the scratch, then it will pay you to buy the franchise of a successful brand in the bottled water production industry.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own bottled water production company in the United States, Canada, and Australia or in Europe, you are sure going to face some challenges and threats that are peculiar to similar business. Some of the challenges that you are going to confront is finding your way around government regulations.
There are several laws out there that you are expected to follow if you want to run your own bottled water production company in the United States of America, some of the laws are unique to each states in the U.S.
Generally, if you are considering starting a bottled water production company in the United States of America and in any part of the world, then you should brace up to face threats such as unfavorable government policies and regulations, economic downturn; usually economic downturn affect the purchasing power of the average man or women on the street. Of course the arrival of another bottled water Production Company in same location where your target market exists.
7. Writing a Business Plan
When writing your business plan, ensure that you are moderate when it comes to setting projections on income generation and sales projections et al.
It is better to be on the safer side which is why when you are calculating your future income you should make use of the lower range figures as against the upper range. These are some key factors that you should also consider when drafting your business plan;
Executive summary and Company’s descriptions
You are expected to write about the concept of your business, descriptions of your company, your company’s vision statement, and mission statement, where your company will be located, your management team, your investment philosophy and perhaps why people should patronize your products or services.
Other key components that should not be missing in your bottled water production business plan are your product offering, bottled water SWOT analysis, marketing and sales analysis / strategies, pricing, costing and financial projection, management techniques, expansion strategies, publicity and advertising strategy, budget and start – up capital generation et al.
8. Prepare a Detailed Cost Analysis
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, 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.
9. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
It depends on what you want and the type of business model that you intend building, you have the options of either choosing a limited liability company which is commonly called an LLC, a “C” corporation, or an “S” corporation. You can start your bottled water plant as limited liability company (LLC) and in future convert it to a ‘C’ corporation or a ‘S’ corporations especially when you have the plans of going public.
For example, setting up an LLC protects you from personal liability. If a customer that patronized your water suffers an allergy attack from drinking your water, his lawyers can’t go after your property or properties. It is only the money that you invested into the limited liability company that will be at risk.
It is not so for sole proprietorships and partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.
10. Choose a Catchy Business Name from the ideas Below
When it comes to naming your business, the rule of thumb is to follow the trend in the industry. If you are in the bottled water production industry, your business name should sound like a company in the industry not like a chemical company or any other company that contracts what you are into. These are some of the catchy names that you can give to your bottled water production company;
- Zests Bottled Water Co.
- Glacier Natural Spring Water
- Life Nourishing Mountain Water, LLC
- Sparkles Bottled Water, LLC
- Gustoes Distilled Bottled Water Company
- Relishes Bottled Water, LLC
- S & T Bottled Water Co.
11. Get the Necessary Professional Certification
There are various certification courses that exist, it is however important that you find that which tallies with the bottle water production company.
Before you can be permitted to operate a bottled water production company both in the United States of America and in other parts of the world (developed world most especially), you are expected to apply and obtain certain certification or permits as the case may be.
You are supposed to get clean health certificate, you are expected to have undergone water purification and bottling training as well as obtain food handler certificate.
You can also check up with your state or city to know if you will require a professional certification before you can be licensed to run your own bottled water production business. But you can be rest assured that the industry is highly regulated and you are expected to meet the required standard as stipulated by the regulating establishment bit at local and national levels.
12. Get the Necessary Legal Documents You Need to Operate
The requirements for running a bottled water production company vary widely from country to country, states to states and from cities to cities.
For instance, in Toronto, Canada, some of the requirements for bottled water production business include business and liability insurance, a Commercial Vehicle Operator’s Registration for the truck, a food and drinks handler certificate, appropriate driver’s licenses for distribution drivers, assistant’s licenses for assistants, and a health inspection. Proof of ownership, proper identification and vehicle license et al.
These are some of the basic legal requirements needed before you can successfully start and run your own bottled water production business in the United States of America:
- Business and liability insurance
- Commercial Vehicle Operator’s Registration for distribution truck
- Food and drinks handler certificate
- Appropriate driver’s licenses for drivers
- Assistant’s licenses for assistants
- Health inspection Certificate
- Proof of ownership, proper identification and vehicle license
- Depot, commissary or service support facility meets vending unit operation needs
- Copy of license for the service support facility and/or a recent inspection report
- Tax Payer’s ID
- Fire certificate
- Plant insurance
- Certificate of Incorporation
- Business License
- Bottle Water Business Plan
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Employee’s Handbook
- Operating Agreement for LLCs
13. Discuss With an Agent to Know the Best Insurance Policies for You
Just like any other business, there are key insurance policies that you must have in place if you chose to start a bottled water production company in the United States of America. Besides you can’t be permitted to run a bottled water production business in the United States, in Canada, Australia and in Europe if you don’t have the basic insurance cover for your business.
These are some of the basic insurance cover that you should consider purchasing if you want to start your own bottled water production business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Workers compensation
- Overhead expense disability insurance
- Property insurance
- Business owner’s policy group insurance
- Motor Vehicle Insurance (Comprehensive)
14. Choose a Suitable Location for your Business
When it comes to choosing a location for a bottled water business, there are key questions you should answer and key factors that must be considered. You are expected to choose a location that is easily accessible especially as it relates to your distribution network and supply of raw materials et al. Affordability, availability of labor and safety are also some of the factors that you should consider.
Despite the fact that bottled water are consumed by all and sundry, it is important to choose a location that will give your economy of scales; a location that will give leverage to favorably compete in the industry as a new entrant and also to make reasonable profits et al.
15. Hire Employees for your Technical and Manpower Needs
When it comes to starting a bottled water production company, then you should make plans to build a standard water plant.
A standard water plant includes water borehole, effective water treatment and water purifying machines, water bottling machines, a mini lab and good drainage system. So you are expected to put all this equipment and machine in place and also purchase standard distribution trucks.
Although you can get a fairly used brand of the above listed equipment and machines, but it is advisable to go for new and latest machines and equipment that can serve you for a long time most especially if you have the required money to make the purchase.
Even if you don’t have the required amount, you can enter an agreement with the suppliers of such bottled water production machines and equipment and spread the payment over a period of time.
As regard acquiring a facility, if you have the required finance, it is to your advantage to acquire a property or lease a facility to be used for your bottled water production plant; it usually gives you the freedom to design the facility the way you want to it to be and install safety gadgets as you so desire. But if you are low on cash, then you don’t have any option other than to rent a facility.
When it comes to creating a workforce structure for a standard bottled water production company, then you should look towards getting qualified and competent people to fill the following roles; Chief Executive Officer (Owner), Plant Manager, Human Resources and Admin Manage, Merchandize Manager, Sales and Marketing Manager, Accountants / Cashiers, Production Workers / Machine Operators, Distribution Truck drivers, and Cleaners.
Over and above, you will need a minimum of 15 – 20 staff members to successfully run a small scale bottled water Production Company.
16. Write a Marketing Plan Packed With ideas & Strategies
The fact that the entry barrier for starting a small scale bottled water production business is low means that there is bound to be more players in the industry no matter the location you choose to start yours. In essence, you must come up with creativity and innovations if you must carve out a market for yourself within the available market in your community, city, state or country.
So when you are drafting your marketing ideas and strategies for your bottled water production business, make sure that you outsmart what your competitors are offering. Here are some of the platforms you can utilize to market your bottled water production company;
- Introduce your bottled water brand by sending introductory letters to residence, bottled water merchants and other stakeholders in your target and other cities
- Open your bottled water production company with a party so as to capture the attention of residence who are your first targets
- Engage in road show in targeted communities from time to time to sell your products
- Advertise your products 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 bottled water brands
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
17. Develop Iron-clad Competitive Strategies to Help You Win
When it comes to competing favorable in the bottled water production industry, you would have to be very creative to stay on top. The truth is that, if your customers have the opportunity to buy a well packaged and cheap bottled water from your competitors, the possibility of losing them can’t be ruled out.
In other to stay competitive in this industry, you must ensure that your bottled water is distributed and always available in outlets within your target market locations. The truth is that if there are fluctuations in the supply of your brand of bottled water, customers can choose to shift allegiance and settle for other options available.
So also part of the creativity and innovations that will keep you highly competitive is to ensure that you produce bottled water in different sizes, packages and flavors et al. it will give your target market options.
18. Brainstorm Possible Ways to Retain Clients & Customers
No doubt one of the strategies that you would need to employ in order to generate repeated sales from your customers and also to retain them is to ensure that the quality and taste of your bottled water are constant and does not fluctuate.
The truth is that if the taste and quality of your bottled water fluctuates, you are likely going to struggle to get your customers coming back; people usually go for products that are of good quality. You can also make uses of promotional ideas such as loyalty schemes, direct marketing, door drops, and merchandising.
Lastly, 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 to attract new customers.
19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
No matter the industry you belong to, the truth is that the market is a dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Your corporate identity as a lot to do when it comes to building a business that is profitable and last long.
Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your Bottled Water Production Company;
- Place adverts on both print (community based newspapers and magazines) and electronic media platforms
- Sponsor relevant community programs
- Leverage on the internet and social media platforms like; Instagram, Facebook , twitter, et al to promote your bottled water brand
- Install your Bill Boards on strategic locations all around major cities in the United States of America
- Engage in road show from time to time in targeted communities
- Distribute your fliers and handbills in target areas
- Position your Flexi Banners at strategic positions in the location where we intend getting customers to start patronizing your products.
- Ensure that your bottled water are well branded and that all your staff members wear your customized clothes, and all your official cars and distribution vans are customized and well branded.
20. Tips for Running It Successfully
As the chief executive officer of a bottled water production company, it is your responsibility to give direction to the business.
Part of what you need to do is to ensure that you create time for office meetings; a time where challenges, feedback, projections and relevant issues are discussed. The meetings could be daily, once in a week, twice a week or once in a month. The bottom line is that there should be consistent meetings in your organization.
Carrying out appraisals on a regular basis and training your employees will help you run your organization effectively. Encourage your employees to pursue certifications in their various area of specializations; it will help your organization’s profile and of course it will help the individuals. You can choose to fully or partially sponsor some of the certifications.
Lastly, you should keep your doors open for suggestions from members of your team and your clients. It is very important to reward excellent performance in your organization; it will go a long way to encourage healthy competition in your organization.