8 Essential Steps On How To Start A Bottled Water Company

These Are The Main Points In This Article

When deciding to start a business, there are many options to consider, like what kind of product, services, or type of company you should start. In this article, I’m sharing how to start a bottled water company in the United States.

If you would like to start a bottled water company, these are the steps you should follow:

Discover what the market is like
Create a business plan
Decide your business structure
Fulfill Business Legalities
Get the required equipment
Drill a borehole or have access to portable water
Hire employees
Market and scale

Bottle water is one of the most profitable industries worldwide. The industry is growing rapidly because of consumers’ increasing demand for natural and healthy products. Bottle water has a rich history, with the first bottled water being sold in 1767. In this review, you will discover how to start a bottled water company in the United States, whether it be your own company or a franchise.

To start a successful bottled water business in the United States, it is important to understand a supply and demand relationship between how much water is available to drink (supply) and how many people are purchasing bottled water (demand).

The basic economic principle of supply and demand demonstrates that you can purchase the item at a discounted rate when the supply of something exceeds the demand. Another aspect of this principle is that one variable impacts the other inversely. When demand exceeds supply, then the item will fetch an increased cost. You can learn more about this phenomenon by seeing how higher education costs increase when more students (supply) seek degrees.

Step-by-step Guide to Start a Bottled Water Company

Seeing how starting a bottled water business could be a big win for you, follow through to discover how to start a bottled water company. The steps provided below were crafted with the United States in mind, but they capture the very essence of starting a business anywhere in the world.

Discover What the Market is like

This is the first step of starting a business anywhere, regardless of the niche or industry. You can call it market research or market survey. Whichever term you use, it is vital to know and understand the market before starting a business.

Some of the likely questions you would have to ask as you try to understand the market include:

What is the cost of starting a bottled water business?
What is the cost of running the business?
Who is the target market, and how is their purchasing power?
Is a bottled water business profitable?
What should be the pricing scheme of the products, as in this case, bottled water?

When you ask these questions, you start to get insight into what the market you are venturing into looks like and whether it is a good fit for you.

Create a Business Plan

Every business requires a business plan. It is easy to downplay the need to have a business plan before starting your business, but that is wrong. A good business plan guides you through each stage of starting and managing your business while also providing a roadmap for structuring, running, and scaling your business.

A typical business plan consists of the following sections, which include (and is not limited to):

An executive summary
Description of the company
Organization and management
Service or product line
Marketing and sales strategy
Financial projections

If you can create the business plan yourself, then do so. However, I recommend you ask a professional to help you craft one. It is important to have a business plan to scale your business and get funding from prospective investors easily.

Decide Your Business Structure

Here you decide what your business structure would be. Four common business structures include:

Sole proprietorship
Partnership
Limited liability company and
Corporation

It is important to decide how you want your business to be structured, as this will determine the kind of registration, permits, and licenses you will obtain. Different businesses have varying legal demands. You may be on the wrong side of the law if you are not operating your business according to the legalities for its structure.

Fulfill Business Legalities

The government is strict with laws surrounding the establishment and operations of businesses. For a business like a bottled water business, whose products directly impact people’s health, there are necessary licenses and permits to run such a business.

When we talk about legalities, we refer to obtaining the permits and licenses for businesses in your industry and state, registering for taxes, opening a business bank account, getting business insurance, and much more.

Permits and Licenses

The first type of license and permit you would need to operate a bottled water business is from the Food and Drug Administration (FDA). The federal government agency regulates and administers licenses to businesses whose products and services deal with food items, drugs, and anything people consume that may directly affect their health.

For your bottle water company, the FDA regulations include Good Manufacturing Practices (GMPs), standards of identity, and labeling requirements. It is important to understand these federal bottled water regulations and obtain licenses on them before establishing your company.

Aside from the FDA, starting a business requires approval from the state and local authorities. You must register with the Secretary of State in the state where your business will be located. Even your county or city has specifications and stipulated policies that must be met before a business owner would be allowed to run one.

Find out the demands of your city and state concerning bottled water businesses, and check out this SBA article on licenses and permits by states.

Registering for Taxes

Tax is a serious issue in the United States, and the government expects both individuals and businesses to take it seriously. There are a couple of state and federal taxes you would need to register for to be allowed to start your business, and it starts with having your EIN.

Getting your EIN is free and easy and can be gotten from the IRS website via mail or fax. If you do not know what EIN means, click here to read a detailed post on it by How to Start an LLC.

Business Bank Account

A bank account for your business is a very vital step in establishing your business. According to BMO.com, it is the foundation for building business credit, and it goes beyond that with a lot of benefits attached.

Having a bank account for your business will help keep your assets from your business funds. You would not want to have your money mixing up with your business money regardless of your business structure. Also, a bank account for your business makes it easy to have a credit profile, thereby increasing your eligibility to get bank loans, lines of credit, and other financial assistance.

Another important reason to own a bank account for your business is to ease your tax payment process. Your bookkeeper or accountant will find it easy to keep track of business transactions to determine your business’s tax-deductible.

Business Insurance

Insurance is something many entrepreneurs and business owners overlook. In the United States, the government has made it mandatory for businesses that employ labor to own business insurance, worker’s compensation insurance, and disability insurance, among others.

As expected, different states have policies governing the insurance policies every business is expected to have. While the above constitutes the major insurance policies required, some states may have additional requirements, and it is best to check with an insurance agent in your state to be sure of the insurance demands for the state.

Get a Good Location and Required Equipment

If you have satisfied the steps above, the next step to start your bottle water company is to get a good location and the required equipment. A good location is important for:

Water supply
Delivery of products to customers
Accessibility for employees

Getting a good location for your bottled water business cannot be overemphasized. After you have secured a location, you will need to get the equipment to run your business. Some of the equipment that is required include:

Storage tanks for storing water
Water treatment machines
Water filters
Sealers
Conveyors
Bottle loaders
Water dispensers
Sterilizers
A generating set for power supply
Distribution vans and much more

Drill a Borehole or Have Access to Portable Water Supply

Water is the major commodity for your business, and to run a bottled water company, you need to have a borehole or access to a portable water supply. If possible, the best option is to drill a borehole and use a generating set to pump water. Alternatively, you can access water supply and store it in your facility.

Whatever water source you use, you should have sterilizers and treatment machines to treat the water before packaging them for distribution.

Hire Employees

No matter how small-scaled your bottle water company is, you cannot shoulder the responsibilities yourself. Get competent and skilled people to be in charge of different sections of your company. It would be best to consider hiring a Human Resource manager to help you with the hiring process, so you get only the best hands.

This step also comes in handy if you want to run the bottled water company as an absentee owner business.

Market and Scale

The final step on how to start a bottled water company that I would love to recommend is extreme marketing. Adopt every known marketing style that would get your company in the face of customers. One subtle marketing strategy I often encourage businesses to use is digital marketing which involves having a website and running Search Engine Optimization (SEO).

There are thousands of people searching for bottled water brands on Google and other search engines. You can step ahead of your competition by tapping into this free traffic and referral. All you need to do is have a website and rank for keywords like “bottle water company,” “best bottle water company in California,” “where to get good bottled water,” “how to get bottled water for my [location or business],” and much more.

Hire a digital marketer or an SEO expert to help you with this.

FAQs

How much does it cost to start a bottled water company?

The cost of starting a bottled water company would be around $700,000 and $1,000,000. If you want to start a small-scale company, your budget could be around $200,000 to $350,000 for a start. This cost includes getting a location, hiring staff, purchasing the required equipment, and getting licenses and permits.

Is bottled water business profitable?

Yes. The profit share of a bottled water business is very high. You can get up to a 50 percent ROI when you start your business and engage the right marketing strategy. There are tons of big names making massive profits from bottled water sales.

How do I start a bottled water business?

Discover what the market is like
Create a business plan
Decide your business structure
Fulfill Business Legalities
Get the required equipment
Drill a borehole or have access to portable water
Hire employees
Market and scale

Conclusion

If you want to start a bottled water company, you should know bottling water is a very profitable business to be in. The demand for bottled water is steadily rising, which can mean big bucks for someone ready to get into the business. When you think that the average American consumes about 82 gallons of water per year, it’s easy to see why this kind of business will continue to grow steadily for many years to come.