How to Start a Water Vending Business

One of the most guaranteed returns businesses you can venture into in Kenya is selling purified water whether in single use small branded bottles or refilling bottles for use with dispensers. This is because water is a necessity for life and every human, animal or plant needs water. But the other major driver of this business is the demand for purified water by a health conscious population especially in urban centers. This explains why water stations have been cropping up everywhere almost competing with bars and wines & spirits shops. In this post we will be looking at how to start a water vending business in Kenya.

How to start a water vending business – planning/preparation stage

Do a market research

Before starting any business, it is important to do a market research to see the viability of the business. A good market research has a few advantages:

• It helps you know if there is market for your product.
• It helps you know if there are other similar products you will be competing with and how strong they are.

• It helps you know what gaps you can utilize to beat completion.

• It helps you know if the market is huge enough to make any financial sense in investing in that business.
• It helps you know if the market is big enough to allow for expansion in terms of opening up more branches.
• It helps you know the purchasing power of the market.

• It helps you know if the cultural practices and beliefs of the community will have any negative effect on your products/services.

Though some of the abovementioned advantages might not apply to a water vending business, you still need to do a research to know if it’s worth it. Every business you venture into must have a good realistic chance of giving you returns and this can only be determined through a market research.

Search for required equipment

After you have done the market research and content that the business stands a good chance of giving you good returns, you now need to search for the required equipment from different vendors. This will help you know the market price and also helps you know more about those products. It also helps you have a brief understanding of the equipment sellers especially what other clients say about them. It’s good to check online reviews about these businesses to see what other clients who have bought from them say.

We advise if possible visit them to physically see where they operate from, if they really make the said equipment as well as the quality of their equipment.

Identify a suitable location

Location is one of the most important considerations to make when setting up a business. You have to make this decision from two points of consideration; accessibility by clients and accessibility by suppliers and in this case water supplier if you will be buying water. You might be having the best product and using the best equipment there is but if you are not accessible by clients then you are bound to fail. Find a location where potential clients frequent like a shopping centre or a long a street where they pass by on their way to and from work or the shopping centre.

The premises itself should be accessible easily not just the general location and it is recommended that it’s on the ground floor. The reason why ground floor business premises are in great demand is because they get more customers because of their easy accessibility. Considering that also this business has customers who come with 20litre refill bottles and leave with them when full, most will not fancy going down the stairs while carrying the water if your shop is on a top floor.

On the other hand it is important that water supplier and other suppliers e.g. the equipment seller when coming to deliver are able to easily access your business premises. If you are buying water whether purified or unpurified, it means you will be having the supplier regularly come for delivery sometimes even several times a week. It should be easy for them to access your business. This takes us to the next point.

Establish where you will get the water from

Water is your main raw material/input. Here you have two options; either buy purified water and you just invest in a water vending machine or use unpurified water and invest in a water purifier. For the unpurified water option you have two options also: you can purify your own water from a borehole, well, municipal council water etc. or buy unpurified water from a third party.

Both have their advantages and disadvantages. For the purified water the advantage is that you will not be investing in a water purifier which is a big cost saver upfront and a suitable option for anyone who is limited by capital. The disadvantage is that your profit margins will be less than the person purifying their own water because it’s way cheaper. Here you aren’t having to contend with price mark-up added by the seller of the purified water.

As for the option of investing in your own water purifier, you will be making more profit margins which will help you recoup what you invested in the purifier in the long run. You will also not have to worry about the reliability of the supplier and you are assured that your water is really purified and meets the required standards. With your own purifier you can purify anytime you want and as much as you can which gives you the advantage of always having water in stock at all times.

The main cost in the case of purifying your own water is what you spend on electricity to run the pump if drawing from a well or borehole or any other source as well as the cost of running the purifier. Of course the purifier will need maintenance once in a while as well as replacing the necessary parts like filters/membranes etc. however the cost of this is still quite minimal.

Come up with a business plan even a simple one

A business plan helps you have a good road map of how you will start and grow the business. It is a written documents showing the sources of funding, key persons involved and how to execute the strategy that will help the business grow. It doesn’t have to be a complicated document but even a simple one can suffice. In fact the simpler it is to understand the better.

How to start a water vending business – the requirements

Let us now see at the equipment you will need to successfully start and grow this business. Some of them are optional depending with the model you choose.

Water vending ATM/water station with taps

A water vending ATM or a water station with taps is a mandatory equipment you need for this business. This is what you will be using to sell water with. The vending ATM comes with a PLC for keying in the amount of money the client has or the volume of water to dispense. It is also used for setting up the price per litre which is the base figure for determining how much an amount of money can buy a volume of water. It can also be used to do sales reconciliations since it keeps sales records.

Water purifier

A water purifier as explained earlier is optional but highly recommended. With a water purifier as elaborated earlier you make more profits and you will not be worried much about availability of water stock or even quality of water.

Storage tanks

Storage tanks are really necessary. You will need them for two reasons; to store purified water whether you bought it or purified it yourself and to store unpurified water that you have bought or drawn from your source.

Washing sink with jet bottle rinser

A washing sink with a jet rinser is also a necessary equipment. You need it for washing and rinsing both the inside and outside of the clients’ bottles for refilling. It is not only a good customer care practice but also a necessary one for ensuring your clients’ water isn’t contaminated and you end up being accused for selling contaminated water.

Packaging table

A packaging table is also a necessary requirement for this business. You need it for packaging and placing caps on the water bottles as well as drying the bottle body from the water it got drenched on when you were washing it.

Where to source the equipment needed

When it comes to acquiring the equipment needed for this business, you must go for the best in terms of quality, durability and affordability. With all factors considered, we can only recommend two businesses that deal with such equipment in Kenya. In fact they produce them.

The first recommendation is Saset Limited. You can search them up on google search or visit their website at www.saset.co.ke.

The other company we recommend is Watertech. Their website is www.watertech.co.ke. You can as well search them on google.

How to start a water vending business – implementation stage

Let us now see how to go about starting and operating the business.

Renovate the business premises

The first thing you need to start working on is renovating the business premises. Consider how clients will be accessing it and while waiting to be served how comfortable are they. Also ensure that where you place the vending ATM is where they can see it and can read the display on the PLC unit to see that you have sold them exactly what they paid for.

While renovating consider where the storage tanks will be placed, where the water purifier, packaging benches washing sink etc. will be placed. Also consider other aspects like the counter, locker etc. will be located. You also need to consider how convenient it will be for water suppliers to offload the water when they come for delivery.

Get the business licence

As the renovation is going on visit your county offices to pay for the business operating licence because it is a requirement for any legally operating business in Kenya.

Acquire the equipment needed— have them set up and commissioned

The next thing to do is to buy the needed equipment and have them delivered to you. After delivery let them get installed and commissioned to ensure they are operating as intended. It’s important to do a complete test run to see how everything works.

Growth and expansion

After successfully launching the business observe how everything works for some time as you learn how the business can be improved and expanded through opening other branches. Use the experience gained in the first shop to successfully launch and grow another one and another one.

How to start a water vending business – Final word

The above information is not exhaustive. We urge everyone to do their own research and find out if it’s a viable business idea and if it has potential to grow. This is a business you are assured of returns if you go it in a smart way. This is a business that isn’t very demanding in terms of operating it and you can easily employ someone to operate it on a day to day business as you focus your effort and time on your day job or other affairs. Cheers!