How To Start Water Factory

INTRODUCTION
In establishing a pure water factory, the following segments of the factory need
be put into consideration,
- Water treatment
- Production
- Marketing
- Registration :
NAFDAC
CAC
Trade Mark
- Book Keeping / Accounts
All that is involved among the above mentioned segment are provided in the
package below.
MARKETING CONSIDERATION (PRELIMANARY EVALUATION)

The water shall be sold and shall be a house hold name in Abuja and its
environment
About 1000 bags shall be our take off target sale / day. Distributors are also
welcome and shall be given a very good package.
MANAGEMENT TEAM:
The company shall start with the chairman/CEO and the Accountant / Admin
Manager. A production manager shall be employed to handle production of the
water. It is advisable to employ an operator for production, and hire a part time
production manager to meet NAFDAC requirement. It is also advisable for the
chairman to act as the accountant/Admin manager for a while (say till break even)
just to reduce wages.
Technical Specification and Production Plan

Technical Specification
Equipments
cost
Borehole
Generator
3Plastic tanks at 60,000 each
Sand filter vessel
Carbon Filter vessel
(2) 2Hp water pump @ 20,000each
Filters & filter housing
U.V Sterilizer
Automatic Sachet machine
Pipe, cables & installation
(For plumbing & electrical)
- Films and packing bags
- Loading of sand filter
- Loading of Carbon Filter
=
=
=
=
=
=
=
=
=
=
N 600, 000
N 100,000
N 180, 000
N 120, 000
N 120, 000
N 40,000
N 40,000
N 70, 000
N 350, 000
N 200, 000
= N 50, 000
= N 15, 000
= N 15, 000
TOTAL: N 1, 900. 000

- Logistics
-
cost
Registration with CAC

Registration with NAFDAC
Registration of Trade mark
Renting of business premises
Beatification of business premises
=
=
=
=
=
N 50, 000
N 100,000
N 20,000
N 200,000
N 50, 000
TOTAL : N 420,000
Vehicle
cost
Manageable Vehicle
= N 600, 000
Salaries and wages for the first 3 months
- Operator
= N 20, 000
Salesman
Motor boy
Factory attendant
Chairman/CEO
Accountant/Admin
Petrol and Diesel
= N 25, 000
= N 12, 000
= N 10, 000
= Till breakeven
= Optional
Total: N 67, 000 x3 = N 201, 000
= N 50, 000
Total Capital required

-
Equipments
Logistics
Vehicle
Wages
Power
=
=
=
=
=
N1,900,000
N420, 000
N600, 000
N201, 000
N 50, 000
TOTAL = 3,171, 000

Production plan
With a single automatic machine, 1000 bags a day may not be realizable
except work is done day & night. Another Automatic machine is to be bought
as the business grows. The production team comprises of the production
manager, operator and factory attendants.
Marketing Plan
Distributors shall be invited to distribute with a very good plan. The water
could be sold directly by the coys salesman on the streets of Abuja.
- 10 delivery points of 100 bags each-1000bags
- There Shall be Street by Street Sales
- Good price and prompt delivery
- Buy 10 bags get one free.
The company shall also use any competitive advantage to market its product.
Examination Of Critical Risks

All business has risks but all risks may not occur if business is run with
carefulness and with experience. The risk commonly associated with pure
water business is poor quality. Poor quality could lead to rejection of the water
in the market. Entering into market with wrong impression will give the
product poor acceptability. Others include credit sales, carelessness of the
employees in wastage & embezzlement. Another one is the entrepreneur
quest for self gratification i.e. the investor spending out of the investment for
luxuries. Buying vehicle that are of low grade could also be a serious risk
because the vehicle maintenance could consume the business?
Financial and Economic plan.

Income
With a target of 1000 bags daily and with buy 10 get 1 bag free we cost 900
bags per day. 1 bag cost N100. 900x N100=
N90, 000
Or with the low price strategy i.e. 1 bag @ #80
#80x1000bags -#80,000
Or by the two strategies
I.e. buy 10 bags get I free bag @ #80
- #80x900bags=#72,000
Daily gross income +#72,000
Monthly gross income
=
N 72, 000 x 26 days
Forecasted monthly income =
N 1872, 000
Expenditure (daily)
Sachet film and packing bags
1kg of film cost = N 500
50kg is needed to produce 1000 bags
50kg x N 500 = N 25, 000
1 bundle of packing bag is needed = N 3, 000
Fuel and diesel = N 15, 000
Local transport, recharge cards and miscellaneous = N 5, 000
Daily wages = N 67, 000 divide by 30 = N 2,233. 3
Forecasted daily expenditure = N 25, 000 + 3, 000 + 8,000 + 2, 233.3
= N 35, 233. 3
Forecasted monthly expenditure = 35, 233. 2x 26

= N 916, 065. 8
Forecasted monthly net income
Monthly gross income expenditure
Income - N 1872, 000
Expenditure -N 916, 065. 8
Forecasted monthly net income
= N 955, 934. 2
Conclusion
It is a lucrative business which needs a little, hard working at the beginning.
Producing and selling 1000 bags a day is possible as some people are producing
and selling 12, 000 bags / day in Abuja, the profit accrued could be used for loan
repayment or reinvestment into the business for greater exploits.

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INTRODUCTION

MARKETING CONSIDERATION (PRELIMANARY EVALUATION)

Technical Specification and Production Plan

TOTAL: N 1, 900. 000

Registration with CAC

Petrol and Diesel

Total Capital required

TOTAL = 3,171, 000

Examination Of Critical Risks

Financial and Economic plan.

Forecasted monthly expenditure = 35, 233. 2x 26

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