Are you eager to have an idea about how to start a water supply business in India? If so, let me congratulate you that you have landed in a perfect place.
Starting a business of water supply is not as hard as people think and procrastinating to start, one can execute the water plant or water supply business idea with planned strategies.
In this article, we are going to explore how a person can start a water supply business and make it sustainable with scalability.
There are many reasons behind starting a business of supplying water and that’s why I focused on this point to share with you.
Why Should You Start Water Supply Business
As I mention in many of my articles, any action must have the why, if you do not have the why, you will not sustain that action for a long time.
I would not suggest the shortage of drinking water as it differs with the geography, some places are suffering from water shortage and some are not.
If your geological location comes under the water shortage area, then you should not find more reasons for starting the business of supplying the water.
But, if you are not coming under the water shortage zone, then you should have a strong and profitable reason for starting a water distribution business.
There are many residential areas where the population is not getting enough water for their daily routine in terms of drinking and cooking.
If some people are getting enough quantity of water, they face quality of cleanliness and water density issues.
Some multinational companies are supposed to provide pure water for their employees, visitors, and guests.
Many Gyms, Banks, and other corporate structures need pure and enough water for daily serving to their clients.
These are not enough reasons, they are so on, and uncountable, but the intent of mentioning these reasons here is to explore the scope for starting the water supply business.
How to Start Water Supply Business in India
As I mentioned at the beginning of the article, water-related business in India is not quite as hard as it seems.
The major beneficial matrix of this business is that this is one of the best small business ideas in India and can be started with low investment and high investment with different variants.
If you want to start as a low investment business, you can start to supply the water to the retail customers, and if you have a huge investment, then you can start to supply the water to the water suppliers.
If you are having a low investment, there is a different strategy which we are going to explore in this article moving forward.
Requirement to Start a Water Supply Business
The water supply business idea needs some very basic requirements, and hopefully, the recurring expense is not too much to execute this small-scale business idea.
You will need some jugs or big bottles (according to the number of customers), one tempo, a driver (if you need one), and a shop or warehouse.
As usual, I suggest you register your business with the government before you start it for legal and future purposes.
Another requirement of starting the water distribution business is to tie up with the water plant owner, which will be explored in-depth later on in this article.
The area of the warehouse depends on the acquisition of several customers. I suggest you acquire a big wear house because the growth of customers is too fast in this business.
Decide The Territory For Supplying The Water By Market Research
As market research is a very first step for any business, hence the water distribution business is not excluded from it.
First, you have to scan the different areas and make a list of those areas where the water supply from the government and other sources are not either enough or clean to drink and use in other stuff.
As a second step, you are to survey people’s problems in depth, which will make the next strategy.
Whether the people are facing quality issues, quantity issues, or service issues if anyone is already doing the same business in that territory.
The range of territory is not a barrier, but I suggest you decide to provide the water in the area of 10 km.
If you want to cover the larger area, then you have to enlarge the team as well along with the other resources like jugs, tempo, drivers, and all.
Make a Tie up With Water Plants
Keep one thing in mind that water-providing business comes under a service sector business category, so you must get a regular supply of water from any source.
To get so, you have to tie up with the water plants which are supplying the water to the water suppliers like you.
You (or the driver) will be collecting the required water from the water plant and then they will be distributing the water to the customers.
Building Customers – Customer Source – Customer Potential
Is it very hard stuff to build the customer base for the water jug supply business?
Of course not, it’s a very easy task to accomplish the requirements of the customers, but for that, you need to have a perfect prediction, database, and analytics of the territory which you have selected to start the water bottle business.
I have already done this business in the past, and currently, this business is being handled by my team, and that’s why I am going to suggest to you the best strategy to make your business scalable and profitable along with the customer acquisition.
In order to sustain the distribution business of water, you would require two types of customers.
- Regular Customers
- Seasonal Customers
Regular customers will be bringing water jugs or water bottles from you regularly, i.e. either every day or twice or thrice a week.
Whereas the seasonal customers will be availing the water jugs or bottles in bulk when they get an order for occasion event management.
Your first targeted customers will be the residential area population where they are facing the water issues any of above mentioned.
Now, as a business owner, it’s your call to identify them and offer the best solution for their problems by providing the best quality and services.
It needs a proper survey to educate yourself about the issues that people are facing, it’s recommended that you note every problematic factor.
If someone is already supplying the water to them, and people are not satisfied with his service and quality, you can acquire those customers very easily.
Banks, Gyms, and Marriage Halls
Banks need water jugs for their staff and customers on a daily basis, and this is your permanent customer until you provide the regular service and the best quality.
You might be aware that banks are used to bearing the high rush of the customers, which generates the need for more water, hence, the consumption of a small bank is also around 3-4 jugs of water per day.
Gyms are the highest consumption area of water as the people come to the gym for exercising which produces very much thirst which causes the consumption of more and more water.
Seasonal functions consume a lot of water while occurring the occasion, hence, it would be a one-time order, but it will create a huge profit for you.
Nowadays, due to the corona pandemic, the number of people can be less, but it’s not forever, you also know that a small marriage function contains at least 300 people each time.
If you get the order to provide the water bottles for marriage occasions for morning and evening, i.e. around 600 bottles or jugs, it will create a huge profit for you which would be equivalent for your 20 customers who are bringing 1 water jug each day for 30 days.
The potential customer places are not limited to only these three, you can cover the restaurants, canteens, hotels, and local shops as well.
Supply Chain of Water From Water Plant to The Customer
To maintain the best service, you will have to decide the fixed time for every customer, so that they can not expect the delay of supply for the water.
The water supply business runs based on service first, late delivery of water jug causes the customer loss.
First, you will have to collect the total amount of water that you need for the day, and the second step will be to distribute it to the customers by the fixed time.
If you are covering more than one territory, you have to channelize the business with the technology to ensure that the employees are providing the water jugs or bottles to the customers on time.
Until you have few customers, you can manage the water distribution business by communicating with the customer on call or WhatsApp.
As long as your business grows, it’s recommended that you create a mobile app for the customers where they can access everything about your service.
For example, they can know the location of their water (location of a person who is distributing their water jug), the pending billed amount, amount of the current month’s bill i.e. unbilled amount.
Maintenance of Water Supply Business
Like the other profitable businesses, the water supply business also contains recurring expenses and maintenance attributes.
You will have to maintain the vehicle by which you deliver the water jugs to the customers, your warehouse cleaning, and cleaning of jugs and bottles in which you supply the water to your customers.
As a recurring expense, you will have to make a budget for the rent of the warehouse, petrol expense, salary expense, and the electricity bill along with the tax to be paid to the government.
One major recurring expense is the billed amount of the water plant from which you will be collecting the water to supply the customers.
Profit Margin For Water Distribution Business
Without profit, no one will be willing to start any business, do you agree with me? Of course! The profit margin is the motivation of any business.
Well, the profit margin of the water business model differs with the states and cities over India.
I was running a water supply business in Gujarat, and currently, it is handled by my team, moreover, I am earning around 7 rupees as a profit per bottle excluding all expenses along with maintenance and recurring expenses.
If we talk about the average profit margin for the water jug supply business in India overall, it is around 9 rupees per bottle including the water shortage territories.
If you have 200 customers per day, you would be earning approx 1800 rupees per day by supplying the water jugs to the customers.
Prices and Variation in Water Quality
The pricing point of the product is one of the most important for any business and the business of water distribution is not beyond it.
1 jug or 1 bottle of commercial water contains 20 liters of water which total costs 7 to 10 per bottle, and you will have to add your recurring and maintenance expense in it.
After concluding all the amount, you will have to figure out the final amount of the 20 liters water jug which would not affect the customer’s expectation and budget in terms of price.
Talking about the variety of water, you would be thinking that, is there any variety in water?
There is not a variety, but there is a variation, some people recommend using only mineral water like Bilseri, and Kinley which cost approx. 150 rupees per bottle of 20 liters.
In order to supply the standard water, you must take a franchise or agency from the original brand, you can not sell without taking permission from them.
If you want to sell without permission, you would have to state your business as a retail shop.
You must make sure that you are providing the quality of water which is not harmful, otherwise, you could be penalized, or can lose the license of the water supply business.
The water supply business is one of the best small businesses, as it requires a very small investment, and you can execute it with very minimal resources.
The profit margin per piece of the bottle is not too much that can motivate you to start a business of water distribution, but one more aspect that you have to focus on is that it’s not hard to make several customers in a very short time.
If you have only one customer in a flat apartment which includes 100 houses, you will cover all the houses in just 2 months.
Ask me why?
Because the water supply business contains a mouth-to-mouth marketing nature which means, your existing customer will do marketing for your business.