Water Vending Business Plan

Are you interested in starting a water vending business but you don’t know what is required or how much capital you need? You might also have a fair amount of information about the business but still need a bit more information. How about referencing a water vending business plan that will give you a realistic picture of what is required?

Selling water through a water vending station is a great business that you are guaranteed of getting daily customers. Many urban households are consuming purified water because of increased awareness on the dangers of consuming contaminated water. The middle income level is also embracing bottled water due to their desire to adopt healthy lifestyles. Consuming bottled water whether from a single use bottle or from a water dispenser is seen a status symbol. All these factors combined have led to an increase in demand for purified water.

We therefore felt it necessary to prepare this water vending business plan that will help you start a water vending business in your locality.

Below we have prepared a model business plan that you can edit to your preference if you are seeking financing or want to know how much it would cost to set up a water vending business.

All prices included here are exclusive to Saset customers. We help our customers set up a water station and commission it for them.

Saset Total Quench Water Vending Business Plan

John Doe- Owner

Created on May 05, 2020

Executive Summary

Product

Saset Total Quench produces high-quality bottled water for domestic and industrial use. Our water is produced and packed at the source while observing the highest hygiene standards. We use state of the art equipment made or assembled and serviced by Saset Technical Services to ensure the water meets the highest KEBS standards.

Customers

The target audience for Saset Total Quench is households, supermarkets, shops, hotels, hospitals, corporates and different institutions. But we also sell to walk-in individual clients.

Future of the Company

Although there’s emerging competition in this business we foresee an increased growth by branching out in other unserved areas. Our goal is to maintain high standards of production and competitive pricing which will ensure customer loyalty.

Company Description

Mission Statement

To produce and sell high-quality bottled water that will set the industry standard and be the leading brand.

Management Team

John Doe — owner and CEO

John Doe — sales manager

John Doe — accountant/bookkeeper

Legal Structure

Saset Total Quench is a sole proprietorship and registered with Registrar of companies in the Republic of Kenya.

Market Research

Industry

Saset Total Quench will be a part of bottled water manufacturing and packaging industry. The big industry players like Dasani and Aquamist offer just regular water bottles that are single use or for water dispensers. Other players in the industry only sell to those who visit shops or supermarkets when it comes to small bottles of below 1.5 litre. The smallest companies sell locally to shop owners and households with water dispensers.

This industry has been suffering from an influx of unlicensed players but the government is frequently coming up with measures to stop this trend. One of the measures implemented from 2019 was introducing the Excisable Goods Management System (EGMS) sticker that every water bottling company must have on their bottles. This move, enacted in 2019, involves the compulsory usage of new-generation digital excise stamps by manufacturers and importers of the relevant beverages.

The demand for bottled water has been enhanced by an increase in disposable income among the middle level and urban residents. Additionally, this group is well informed about the dangers of unclean water which has also increased the demand for bottled water. These factors have led to increased revenues from this industry significantly.

As of 2010 the industry was valued at KSH 15 billion which has been increasing. However with the recent introduction of EGMS sticker by KRA, some businesses which were not registered and not paying taxes dropped off. This is an advantage to new entrants who can manage to meet the requirements.

Description of Customers

The customers for total quench will be drawn from different target groups. The first group are hotels, supermarkets and retail shops due to their capacity to order in large quantities which is good in reducing cost of production. The next group are corporates and households who own dispensers. The final group are individual customers who buy single units of between 300ml to 1.5 litre bottles. We will also target these with the sport bottles that they can pass by our filling stations for refill at a cheaper price than what they pick at the supermarket or shop.

Company Advantages

Total Quench has the following advantages compared to competitors:

Reusable water bottles clients can pass by our filling station(s) for refill at lower prices than buying from supermarket shelves or shops.
Stylish sports water bottles that clients can reuse in addition to normal water bottles.
Cheaper prices as low as KeS 10 for those who come to the filling station.
Door to door delivery for households near our filling stations.

Regulations

Total Quench must meet all KEBS regulations concerning water bottling. We will also have the Excisable Goods Management System (EGMS) stickers on all our bottles. In addition to these we will have all the county business licenses paid for and renewed on time. We will also ensure that all our staff will have food handling medical certificates.

Service Line

Product/Service

Total Quench will sell bottled water in different packaging and volumes as follows:

20 litre bottles for water dispensers.

10 litre bottles for water dispensers.

5 litre bottles for water dispensers.

1.5 litre bottles.

1 litre bottles.

500ml bottles.

300 ml bottles.

Pricing Structure

Total Quench will offer the following prices:

20ltr- Kes200
10ltr- Kes100
5ltr- Kes50
5ltr- Kes30
1ltr- Kes25
500ml- Kes20
300ml- Kes15

Product Life cycle

All current Total Quench products are in production and inventory is being accumulated. We will however be reviewing performance of every product on a biannual cycle to see how the market for each is performing. If need be, we will pull off the market nonperforming products.

Intellectual Property Rights

Total Quench is not yet trademarked but it is a fully registered business with the company registrar in Kenya.

Research and Development

The company is planning to conduct the following research and development:

Prepare feedback questionnaires in both print and online to gain ideas, suggestions, and improvements on our products.
Benchmark with other leading brands to see what we can borrow from them but still maintaining our uniqueness in the way we conduct our business.
Conduct and review market research information to identify areas of improvements and keep up with changes.

Marketing & Sales

Our Growth Strategy

To grow Total Quench, we will do the following:

Set up additional branches in high potential areas across the city.
As business grows, we will set up additional branches in Mombasa, Nakuru, Kisumu, Machakos and Meru.
We will also engage in multiplatform advertising i.e. traditional media and online.

How we will communicate with customers

Total Quench will communicate with its customers by:

Coming up with posters, brochures, catalogs etc. with all relevant information.
Generating email newsletters with company news and product information.
Harness the power Google, Facebook, Instagram and twitter advertisements.
Effective utilization of social media to connect and engage with customers when they visit these platforms.
Provide contact information on all company channels of communication.
Adding labels on water bottles that include company name, contact info, and web address.

How to Sell

When starting out, all persons working with Total Quench will be doing sales and marketing where possible. However the sales manager will be in charge of how this is done and main sales and marketing person. We will also have two casual workers to handle day to day sales and marketing. As profits increase, Total Quench will adopt the casual workers as salaried employees and add more to this team including one to assist with social media and online marketing.

Capital requirements/set up costs

Set up costs
Capital and one-time costs
Item	Cost per item(KSH)	Unit	Quantity	Cost (KSH)
Premises modification(accessories plus labour). This is a variable cost.	100,000	Work premises	1	100,000
Water storage tank	30,000	5000Ltr	1	30,000
500ltr/hr Water treatment unit from Saset- For council water, spring water, and other natural sources.(also available in 250ltr/hr & 1000ltr/hr). *NB:* *If your water is from a borehole or with high salinity levels and other contaminants, you will require a complete reverse osmosis system from Saset at Kes 400,000.*	240,000	Water treatment system	1	240,000
900ltr/hr water vending station ATM from Saset	170,000	Water ATM machine	1	170,000
Bottle rinsing machine- Raser jet type from Saset.	120,000	Raser jet Bottle rinser	1	120,000
Stainless steel packaging table 4×6(feet) from Saset.	36,000	SS Table	1	36,000
Stainless steel washing sink from Saset	30,000	SS sink	1	30,000
4 taps stainless steel filling bench	50,000	SS sink	1	50,000
500ltr stainless steel holding tank(optional but necessary if you want to always have purified water ready don’t store purified water in plastic tanks).	90,000	SS tank	1	90,000
Premises/space rent plus deposit & goodwill. If you own it this cost doesn’t apply. Rent charges depend with location and space. Goodwill also depends if you are required to pay or not.	Variable depending with location & size or if you own it.	Premises	1	Variable
Initial bottle and caps inventory	20,000	Bottles	–	20,000
Capital/one-time costs Subtotal				886,000
Licences & permits (get these from your county offices). The costs can vary depending with county and also can change on a yearly basis depending with each county.	Budget between 90,000-100,000	–	1	90,000

Total cost of setup				976,000

The above is a sample water vending business plan but very realistic. It’s not farfetched from the actual cost of setting up a water vending business. The set up costs can vary especially due to the variable factors involved like location, rent, cost of labour, amount and nature of premises modification etc. You therefore need to do your own research to determine the actual cost.

Another aspect that might determine the amount required is the capacity of equipment you go for. However we have tried to pick those that we feel are suitable for an average business.

We hope the above sample water vending business plan will help you come up with your own. Below are pictorials of different machinery required for setting up a water vending station business. We have also included two types of setups we do for our clients. These are actual photos from two of our clients we did the job for.

If you are interested in starting an affordable and efficient water vending business station that you can scale up get in touch with us for more guidance.