Everybody drinks water. Everybody is concerned about their health. It doesn't come as a surprise, therefore, that the water business remains lucrative. Small and independent businesses still take in profits even if big companies have their own water brands. If we come to think of it, it's ironic that water has become more expensive than softdrinks or even gasoline and other pretroleum products.
How to start a water business. One way to start is to get a franchise. Because of the franchise fee, which is an added cost in starting the business, others prefer to buy the equipment directly from suppliers. The drawback of this is that the Pinoy Entrepreneurs would not have the expertise and business processes which automatically come with a franchise. How much capital to prepare depends on whether you get the equipment from suppliers or acquire a franchise -- it could range from P200,000 to a million pesos. Of course, you have to decide what business entity to organize and to register it.
Capturing a market. As mentioned, big beverage companies have their own water brands and you see water stations in just about every corner here in the Metro. Many water refilling stations are expected to sprout because this is a lucrative business (and many will fold because of that competition). One major consideration before going into the water business is your market and how to capture it. Relying on walk-in clients would put you at the mercy of more established water stations and big companies that could afford lowering their prices (but also make sure to keep down operating expenses to be flexible with the pricing). Cultivate a network of households that you'll service regularly. Contemplate value-added service like deliveries. Be the friendly neighborhood water store.
Regulating the sale of water. A bill is currently pending in Congress, proposing a law that regulates the sale of drinking water. House Bill 2606, known as the "Safe Bottled Water Act", requires the Bureau of Food and Drugs (BFAD) to strictly monitor the quality of driking water sold by the bottle or through refilling stations. The bill acknowledges the fact that bottled water consumption has increased tremendously due to questions on the quality of tap water.
Bottle water the same as tap water. There are reports which say that "bottled water sold in markets and convenience stores may be no more free of pollutants than the water that pours from the kitchen tap at a fraction of the cost." The study, however, is in the US, where it is reported that Americans drank 8.8 billion gallons at a cost of $10.3 billion in 2007. This may not apply in the Philippines, although tap water is still regularly consumed in the provinces.
In the end, either because of increased polution or increased health-consciousness of people, the demand for bottled water will grow. It still remains a good business opportunity.
(Discussion transferred to Blog.Pinoy-Business.com)
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