Start a flavored water bottle company by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your flavored water bottle company. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a flavored water bottle company?
When you're bottling flavored water, production equipment is by far the largest expense. If you're purchasing your own equipment, you can expect to pay anywhere from $10,000 for the smallest setup to over $200,000 for a larger facility. However, there are ways to cut costs. You can rent equipment, share equipment costs with another company, or start with non-commercial equipment until your business starts generating a profit.
Distribution costs are also an ongoing expense to consider. You will need delivery equipment, such as trucks or vans, along with hand trucks, forklifts, and other tools necessary to move the product quickly and easily from the truck to the customer's location and from the warehouse to the truck.
Of course, everyday business costs, such as office and warehouse rent, employee salaries and benefits, and marketing, are also considerations.
What are the ongoing expenses for a flavored water bottle company?
Production and distribution costs are the largest ongoing expenses to consider. You can also expect typical overhead costs, such as rent, office expenses, insurance premiums, payroll, and utilities.
Who is the target market?
Your target market will likely include consumers who want to make healthy choices but who also want to enjoy delicious flavors. You should also target businesses with patrons who value unique culinary experiences, such as gastropubs and health clubs.
Look for restaurant and store owners who show a genuine interest in your product and enjoy it themselves. They are much more likely to push the product to their own customers which mean more sales for you.
How does a flavored water bottle company make money?
There are two primary ways to make money with a flavored water bottle company. You can either sell your products directly to the general public or use a local distributor to sell the products to local restaurants and stores. The second option is by far the most popular, though it's certainly possible to do both.
How much can you charge customers?
The pricing for flavored water usually varies depending on the client. When you're selling to restaurants and stores, you may charge a wholesale price with volume discounts based on the order size. If you're selling directly to a consumer, you may use retail or slightly discounted pricing, depending on your agreement. Retail price for flavored bottled water ranges from $2 to $5 or more depending on the venue, product size, and other factors.
How much profit can a flavored water bottle company make?
A flavored water bottle business is capable of generating a large profit. In fact, enhanced (or flavored) water generated a gross profit margin of 39.2% in 2017 which is much higher than many other food and beverage products.
How can you make your business more profitable?
Your initial expenses may be daunting when starting a flavored water bottle company. There are many startup costs to consider, and it may take a while before sales start rolling in.
However, you can cut costs by doing most of the work yourself and keeping operating small until growth is necessary. Creative thinking may also be your best ally. Don't hesitate to consider all avenues when it comes to sourcing materials, creating your products, and distributing orders. You can also get creative with your sales techniques which will help generate cash flow so you can expand more quickly.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your flavored water bottle company is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a Flavored Bottled Water. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
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How to promote & market a flavored water bottle company
You can focus your marketing efforts on a variety of platforms including television, radio, and internet services. Consider out-of-the-box, fresh ideas such as partnerships with social media influencers, and celebrity endorsements.
Because your business model likely includes selling both directly and indirectly to consumers, you'll also need to target local businesses. Consider offering volume discounts, consignment options, and other incentives to help build interest in your brand.
How to keep customers coming back
Since customers can't taste your product before making a purchase, consider offering tasting events and offering samples for free. You could also hire a graphic designer to create a professional product logo and label since these will be the first and only ways to attract many of your customers.
Customer retention will rely primarily on the quality of your product as well as the quality of your customer service.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.
Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.
Start A Flavored Water Bottle Company In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
Flavored water offers a unique blend of vitamins, minerals, hydration, and taste. Entrepreneurs interested in health are most likely to find this career rewarding. This is also an ideal career for those who enjoy following new trends since it's a relatively modern concept.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a flavored water bottle company?
What happens on a typical day at a flavored water bottle company?
There are many tasks in the day-to-day operations of a flavored water bottle company. As the owner, you'll need to wear many different hats throughout your day which can be exciting and challenging. Your workload may vary from one day to the next, but you can generally expect to oversee the following:
- Production - includes sourcing ingredients and creating recipes as well as creating and bottling the product.
- Marketing - includes finding new customers, designing product labels and sales materials, and creating advertisements.
- Distribution - includes delivering orders to customers in a timely manner, collecting payment, and setting up product displays in stores when necessary.
What are some skills and experiences that will help you build a successful flavored water bottle company?
A flavored water bottle company is an ambitious enterprise and requires a variety of skills. You will need to be somewhat creative because new ideas and flavors are necessary to make your business stand out amongst the competition. A charismatic personality and persuasive skills are helpful for securing investors and finding new customers. Since you'll need to shift from one task to the next rather quickly, flexibility and organizational skills are also beneficial.
What is the growth potential for a flavored water bottle company?
Many flavored water bottle companies take an outside-the-box approach by generating partnerships with local events in their communities or offering subscription services to consumers who regularly drink their products.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a flavored water bottle company?
If cash flow is an initial concern, you can start small and invest more capital as you grow. Many flavored water bottle business owners start operating from their own garage, selling small quantities of product to friends and acquaintances. Once you see an interest in your product or land your first large customer, you can invest in commercial equipment and expand your business as needed.
How and when to build a team
Given that there are so many different tasks involved in your day-to-day business functions, you may need to hire a team quickly. Though it's certainly possible to run a small flavored water bottle company on your own in the short-term, you might feel overwhelmed once you land your first big sale and may need to hire additional support. A production team, distribution team, and office team are usually the bare minimum for a growing flavored water bottle company. However, these teams may consist of only one employee to start.