Starting a water purification business in India is a very good idea, since most people prefer using purified mineral water than normal drinking water. Today, the world is becoming more and more health conscious and starting a business venture like this is a good decision that could bring you great success. We have put together some of the important things like business plan, setup cost, marketing strategy and profit margin including some important tips that are needed to start a water purification unit.
These tips will give you a very clear picture on how to start your business in a very easy and simple way. Take a look at the useful tips below to kickstart your water purification unit in India.
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Do Your Market Research
Before starting out your business it’s important to do a good market research to see and find out all the important things that are necessary in a business like this. You could carry out a research about the different competitors in the locality that you are about to start your business. Find out about their target customers, offers and pricing, so that you would get an idea on how to go about doing business. Since this business is a bit complex, you would require an expert’s help to make things easier for you.
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Have a Proper Business Plan in Place
After you’ve gone about and done your research, your next step would be to prepare a good business plan that targets your local market. The plan should have your marketing strategy, staff, financial projection, legal procedures, location and license required to start your business venture with ease and comfort.
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License and Business Permit
The next step is to get the business license and permit in order to start your unit. This would depend on the rules and regulations of the state you reside in. You would need to apply for a vendor’s license from the local administration and get a business permit from the state health department as well.
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Get a Bottle Supplier
Finding a suitable bottle supplier is the next procedure to follow. Before you become a member with them, make sure the company that is going to supply the bottles to you is a member of the International bottled water association. After all, you definitely want to build contacts with trusted individuals in order to run your business successfully.
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Choose the Perfect Location
Finding the right location is another important step when starting the water purification business. There should be separate provisions made for your production and office area for a business like this in order to carry out functioning in a smooth and professional way. You wouldn’t want your production and office area in one place as this would be seem disorganized and cause too much confusion. While choosing the location, make sure that there is a market nearby, proper power supply, road accessibility, and plenty of water.
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Machinery and Other Accessories
Your next step is the machinery and other important accessories that are required to start a water purification unit. These can be hired or acquired on a long term lease system as well if you do not have the resources to purchase them.
It’s always better to go in for a lease or hiring option when starting out instead of directly purchasing these items since keeping cost minimial at this stage would be quite helpful. Once your business has gained success, you could go ahead and purchase the machinery and other accessories if you wish to do so later on. Here is a list of the items you would need in your unit.
- Storage tanks
- Generator
- Filters and Water treatment machines
- Water filling machines
- Water dispensers and sterilizers
- Bottle loaders, conveyors, and sealers
- Trucks that are needed for the distribution of water.
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Employees
Since a business like this cannot be managed by a single individual, you would have to hire different people to help manage it with you. The staff needs to be trained well in handling the different kinds of machinery and equipment. Some of the employees you would need are operators, technicians, managers, accountants etc.
Setup Cost for a Small-Scale Water Purification Unit
The cost for setting up plants with different capacities may vary. For a 2000 LPH economic plant, you would require a building of about 2,000 square feet. The building cost would be about Rs. 16 lakhs. Machinery cost for the plant would come up to Rs. 26 lakhs. However, for a Jar Plant, the investment is a bit lower, which would be around Rs. 20 lakhs for machinery and Rs. 16 lakhs for the building. You can arrange 70% of the total cost by taking a business loan from financial institutions.
Please note these are just estimates as these amounts would differ. There are multiple options where expenses can be worked upon and reduced accordingly. Machinery and accessories can be taken on lease in the beginning rather than purchasing them. Also, you could take a building on lease or rent, but if you have your own space then the cost would be much less.
Marketing Your Business
- A great way to market and sell your brand is to start off with selling your water in your locality. This is one of the best and easiest ways to grab attention and revenue from it. Leave competing with bigger brands for a later stage. However, initially it is always ideal to get a brand image and goodwill by selling in your locality and then expand later.
- Try and get in touch with small restaurants, shops, hotels and hospitals and convince them to use your water.
- Keep a check on your competitor and watch out for who else is selling the same kind of product in the area. Try to be one up on your competitor and provide good facilities that your competitor may not be offering to the local customers. Starting off with a lower pricing strategy is a great way to sell your brand. Once you’ve made your mark in the market, then you could gradually increase the rates. Also, try to find out places that your competitor is not distributing to and you could begin distributing there.
- Organize a product launch to create brand awareness. Carefully design the product and the packaging of the bottle. Play around with different ideas and use your imagination. Check out the styles of other successful brands to get an idea of what people like. Make your product look a bit catchy to draw attention.
- Select a catchy name for your water.
- Get in touch with retailers and request them to carry your products to the market.
- Mass media is another great way to advertise your product. Use newspapers, magazines or your social media accounts to advertise your brand. You could also distribute pamplets in your locality as well.
- Billboards in commercial areas and highways will go a long way in promoting your brand.
- Offer concessions for people who buy your water in bulk, this will help in building a steady income.
- Work on your supply service and try to make it fast as possible.
Water Purification Franchise Option
Another option would be to go with a franchise. Going with a franchise has a good advantage since you don’t have to work hard for building a brand image and marketing. Since your water is already a branded one, people will buy your product easily as it is a trusted brand.
However, a franchise option can be a little costly, especially if you’re on a low budget. Starting a new brand is always less expensive. You can work on marketing strategies and build your brand name slowly, but this would take time, patience, and a lot of dedication.
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Profit Margin in the Water Purification Business?
A water purification unit is something that can be setup easily if you have a good business plan in place. The profit margin you can expect from this business is quite impressive. For small bottles, you can expect a profit margin of approximately 15% and for larger bottles it would be around 60%. So, the average profit margin that you can expect from your business would be 25% to 30%.
The profit margin for a single unit of a 1-litre jar can be worked accordingly. You can finalize the profit margin based on the operating cost of manufacturing that would include expenses like shrink label, packaging, bottle and cap, water cost, interest on capital and other cost for a single unit including its selling price.
There is a good scope of setting up a business like this irrespective of the vast competition in a country like India. Though we have giant players in the market today, the bottled water industry is expected to grow considerably in the years to come. If you’re looking to start a small-scale business in your locality, it could turn out to be one of the most successful and profitable businesses.