Starting a bottled water company can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful bottled water company.
Importantly, a critical step in starting a bottled water company is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Bottled Water Company:
- Choose the Name for Your Bottled Water Company
- Develop Your Bottled Water Company Business Plan
- Choose the Legal Structure for Your Bottled Water Company
- Secure Startup Funding for Your Bottled Water Company (If Needed)
- Secure a Location for Your Business
- Register Your Bottled Water Company with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Bottled Water Company
- Buy or Lease the Right Bottled Water Company Equipment
- Develop Your Bottled Water Company Marketing Materials
- Purchase and Setup the Software Needed to Run Your Bottled Water Company
- Open for Business
1. Choose the Name for Your Bottled Water Company
The first step to starting a bottled water company is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your own bottled water business:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your water company.
2. Develop Your Bottled Water Company Business Plan
One of the most important steps in starting a water company is to develop your bottled water business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise money for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your bottled water business.
- Company Overview – this section tells the reader about the history of your bottled water company and what type of bottled water company you operate. For example, are you a bottled water company that sells spring water, purified water, or mineral water.
- Industry Analysis – here you will document key information about the bottled water market. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target market are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your bottled water company? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your bottled water company make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Bottled Water Company
Next you need to choose a legal structure for your bottled water company and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the bottled water company and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
2) Partnerships
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to open a bottled water company together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a bottled water company include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a bottled water company is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your bottled water company, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Bottled Water Company (If Needed)
In developing your bottled water company business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a bottled water company to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a bottled water company that they believe has high potential for growth.
5. Secure a Location for Your Business
There are a few things to consider when looking for a location for your bottled water company. Firstly, you’ll need to find a production and storage space that is big enough to store all of your bottles and equipment. If you’re bottling spring water, you’ll also want to find a location that has easy access to a spring. For most other water types, you will need enough land to drill a well, unless you plan to enhance public tap water. Additionally, you’ll want to choose a space that is close to a transportation hub, so you can easily distribute bottled water.
Once you’ve found the perfect location for your bottled water company, there are a few things to consider when designing your space. You will need a substantial amount of room for the machinery involved in bottling water. It’s also a good idea to include a room dedicated to shipping and receiving.
6. Register Your Bottled Water Company with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your bottled water company’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your bottled water company to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
The licenses and permits you need to launch a bottled water company will vary depending on your location. However, some common licenses and permits include a business license, a license from the FDA, and a permit from your state health department. Make sure to research the specific licenses and permits required for your business, and contact your local government agency for more information.
10. Get Business Insurance for Your Bottled Water Company
The type of insurance you need to operate a bottled water company will vary depending on the state in which you reside.
Types of business insurance policies that you should consider for your bottled water company include:
- General liability insurance: This covers accidents and injuries that occur on your property.
- Product liability insurance: This covers any medical expenses or damages incurred from a defective product.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Bottled Water Company Equipment
To launch a bottled water company, you will need:
- Bottled water production equipment (storage tanks, filling machines, water treatment machines, filters, conveyors, sealers, water sterilizers, water dispensers)
- A water source
- Bottles and caps for packaging
- Bottled water labels
- A truck or van to distribute the bottled water to retailers and clients
12. Develop Your Bottled Water Company Marketing Materials
Marketing materials will be required to attract and retain customers to your bottled water company.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your bottled water company. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional bottled water company website provides potential customers with information about the products you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your bottled water company.
13. Purchase and Setup the Software Needed to Run Your Bottled Water Company
The software you need to run a bottled water company is:
- A Point of Sale System
- A Bottling Management System
- An Inventory Management System
- A Delivery Management System
14. Open for Business
You are now ready to open your bottled water company. If you followed the steps above, you should be in a great position to build a successful bottled water business. Below are answers to frequently asked questions that might further help you with how to start a spring water business.
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How to Start a Bottled Water Company FAQs
Where Can I Download a Bottled Water Business Plan PDF?
You can download our Bottled Water business plan PDF here. This is a business plan template you can use in PDF format.
Is it hard to start a bottled water company?
Starting a bottled water company is not hard but it does take some effort and planning. The most important part is making sure you have a good product that people will want to buy.
How can I start a bottled water company with no experience?
There are a few ways that you can open a water bottling plant with no experience. You can start by researching the bottled water industry and learning about the different types of water that are available, the production process, and the marketing and distribution channels that are used in the industry. You can also research the different ways that you can get your bottled water into stores and learn about similar companies to find out what works best in your area. By getting a few years of experience under your belt before starting a bottled water company, you will be able to avoid making some common mistakes during this time in order to save money.
What type of bottled water company is most profitable?
The most profitable bottled water company is the one that can provide the best quality of water at a low price. At present, natural spring water is the most popular and profitable type of bottled water.
How much does it cost to start a bottled water company?
The cost of starting a bottled water company can range from $500,000 to $1.5 million, depending on the size and type of company you want to start. Some costs involved in this business are facility cost, label design and purchase, water testing, water treatment machines, marketing materials, transportation costs of the product to distributors or retailers.
What are the ongoing expenses for a bottled water company?
The ongoing expenses for a bottled water company typically include the cost of bottles, labels, labor, and shipping. Further, the cost of maintenance on your water treatment machines can be high. The cost of warehousing or transportation may also be incorporated into the ongoing expenses calculation.
How does a bottled water company make money?
A water bottling company makes money by charging a premium for their product. The cost of water is often lower than the cost of producing and delivering the water, so companies can make a profit by charging more for bottled water than it costs to produce. Additionally, bottled water businesses can also sell advertising space on their bottles, which brings in additional revenue.
Is owning a bottled water company profitable?
Yes, bottled water businesses are profitable, but the profit margins vary depending on the company. The main benefit of owning a bottled water company is that the product is not perishable, so it can be stored and sold for a higher price than other types of drinks. People are increasingly choosing to drink water from bottles over tap water. This is due in part to the perception that bottled water is healthy drinking water, but also because of the many different flavors and brands of bottled water available.
Why do bottled water companies fail?
Bottled water companies fail because of the high price of the product and the environmental concerns associated with it. Some bottled water plants also fail because they are unable to convince the public that their product is worth the price.
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