How to write a business plan for a bottled water brand?

Writing a business plan for a bottled water brand can be an intimidating task, especially for those just starting.

This in-depth guide is designed to help entrepreneurs like you understand how to create a comprehensive business plan so that you can approach the exercise with method and confidence.

We'll cover: why writing a bottled water brand business plan is so important - both when starting up, and when running and growing the business - what information you need to include in your plan, how it should be structured, and what tools you can use to get the job done efficiently.

Let's get started!

Why write a business plan for a bottled water brand?

Being clear on the scope and goals of the document will make it easier to understand its structure and content. So before diving into the actual content of the plan, let's have a quick look at the main reasons why you would want to write a bottled water brand business plan in the first place.

To have a clear roadmap to grow the business

Running a small business is tough! Economic cycles bring growth and recessions, while the business landscape is ever-changing with new technologies, regulations, competitors, and consumer behaviours emerging constantly.

In such a dynamic context, operating a business without a clear roadmap is akin to driving blindfolded: it's risky, to say the least. That's why crafting a business plan for your bottled water brand is vital to establish a successful and sustainable venture.

To create an effective business plan, you'll need to assess your current position (if you're already in business) and define where you want the business to be in the next three to five years.

Once you have a clear destination for your bottled water brand, you'll have to:

• Identify the necessary resources (human, equipment, and capital) needed to reach your goals,
• Determine the pace at which the business needs to progress to meet its objectives as scheduled,
• Recognize and address the potential risks you may encounter along the way.

Engaging in this process regularly proves advantageous for both startups and established companies. It empowers you to make informed decisions about resource allocation, ensuring the long-term success of your business.

To maintain visibility on future cash flows

Businesses can go for years without making a profit, but they go bust as soon as they run out of cash. That's why "cash is king", and maintaining visibility on your bottled water brand's future cash flows is critical.

How do I do that? That's simple: you need an up-to-date financial forecast.

The good news is that your bottled water brand business plan already contains a financial forecast (more on that later in this guide), so all you have to do is to keep it up-to-date.

To do this, you need to regularly compare the actual financial performance of your business to what was planned in your financial forecast, and adjust the forecast based on the current trajectory of your business.

Monitoring your bottled water brand's financial health will enable you to identify potential financial problems (such as an unexpected cash shortfall) early and to put in place corrective measures. It will also allow you to detect and capitalize on potential growth opportunities (higher demand from a given segment of customers for example).

To secure financing

Crafting a comprehensive business plan for your bottled water brand, whether you're starting up or already established, is paramount when you're seeking financing from banks or investors.

Given how fragile small businesses are, financiers will want to ensure that you have a clear roadmap in place as well as command and control of your future cash flows before entertaining the idea of funding you.

For banks, the information in your business plan will be used to assess your borrowing capacity - which is defined as the maximum amount of debt your business can afford alongside your ability to repay the loan. This evaluation helps them decide whether to extend credit to your business and under what terms (interest rate, duration, repayment options, collateral, etc.).

Similarly, investors will thoroughly review your plan to determine if their investment can yield an attractive return. They'll be looking for evidence that your bottled water brand has the potential for healthy growth, profitability, and consistent cash flow generation over time.

Now that you understand the importance of creating a business plan for your bottled water brand, let's delve into the necessary information needed to craft an effective plan.

Information needed to create a business plan for a bottled water brand

You need the right data in order to project sales, investments and costs accurately in the financial forecast of your bottled water brand business plan.

Below, we'll cover three key pieces of information you should gather before drafting your business plan.

Carrying out market research for a bottled water brand

As you consider writing your business plan for a bottled water brand, conducting market research becomes a vital step to ensure accurate and realistic financial projections.

Market research provides valuable insights into your target customer base, competitors, pricing strategies, and other key factors that can significantly impact the commercial success of your business.

Through this research, you may uncover trends that could influence your bottled water brand.

Your market research may reveal that health-conscious consumers may be more likely to choose your bottled water brand, as they could be looking for a healthier alternative to sugary drinks. Additionally, your market research may indicate that convenience could be an important factor for consumers when choosing a bottled water brand, as they might be looking for something that is easy to purchase and carry with them.

Such market trends play a significant role in forecasting revenue, as they offer valuable data about potential customers' spending habits and preferences.

By incorporating these findings into your financial projections, you can present investors with more accurate information, helping them make informed decisions about investing in your bottled water brand.

Developing the sales and marketing plan for a bottled water brand

As you embark on creating your bottled water brand business plan, it is crucial to budget sales and marketing expenses beforehand.

A well-defined sales and marketing plan should include precise projections of the actions required to acquire and retain customers. It will also outline the necessary workforce to execute these initiatives and the budget required for promotions, advertising, and other marketing efforts.

This approach ensures that the appropriate amount of resources is allocated to these activities, aligning with the sales and growth objectives outlined in your business plan.

The staffing and equipment needs of a bottled water brand

As you embark on starting or expanding your bottled water brand, having a clear plan for recruitment and capital expenditures (investment in equipment and real estate) is essential for ensuring your business's success.

Both the recruitment and investment plans must align with the timing and level of growth projected in your forecast, and they require appropriate funding.

A bottled water brand might incur costs for staffing such as hiring production workers to bottle and package the water, as well as administrative staff such as sales and marketing personnel. Equipment costs might include purchasing or leasing bottling machinery, water filtration equipment, and shipping and storage supplies.

To create a realistic financial forecast, you also need to consider other operating expenses associated with the day-to-day running of your business, such as insurance and bookkeeping.

With all the necessary information at hand, you are ready to begin crafting your business plan and developing your financial forecast.

What goes into your bottled water brand's financial forecast?

The financial forecast of your bottled water brand's business plan will enable you to assess the growth, profitability, funding requirements, and cash generation potential of your business in the coming years.

The four key outputs of a financial forecast for a bottled water brand are:

• The profit and loss (P&L) statement,
• The projected balance sheet,
• The cash flow forecast,
• And the sources and uses table.

Let's look at each of these in a bit more detail.

The projected P&L statement

The projected P&L statement for a bottled water brand shows how much revenue and profit your business is expected to make in the future.

A healthy bottled water brand's P&L statement should show:

• Sales growing at (minimum) or above (better) inflation
• Stable (minimum) or expanding (better) profit margins
• A healthy level of net profitability

This will of course depend on the stage of your business: numbers for a startup will look different than for an established bottled water brand.

The projected balance sheet of your bottled water brand

The balance sheet for a bottled water brand is a financial document that provides a snapshot of your business’s financial health at a given point in time.

It shows three main components: assets, liabilities and equity:

• Assets: are resources owned by the business, such as cash, equipment, and accounts receivable (money owed by clients).
• Liabilities: are debts owed to creditors and other entities, such as accounts payable (money owed to suppliers) and loans.
• Equity: includes the sums invested by the shareholders or business owners and the cumulative profits and losses of the business to date (called retained earnings). It is a proxy for the value of the owner's stake in the business.

Examining the balance sheet is important for lenders, investors, or other stakeholders who are interested in assessing your bottled water brand's liquidity and solvency:

• Liquidity: assesses whether or not your business has sufficient cash and short-term assets to honour its liabilities due over the next 12 months. It is a short-term focus.
• Solvency: assesses whether or not your business has the capacity to repay its debt over the medium-term.

Looking at the balance sheet can also provide insights into your bottled water brand's investment and financing policies.

In particular, stakeholders can compare the value of equity to the value of the outstanding financial debt to assess how the business is funded and what level of financial risk has been taken by the owners (financial debt is riskier because it has to be repaid, while equity doesn't need to be repaid).

The projected cash flow statement

A cash flow forecast for a bottled water brand shows how much cash the business is projected to generate or consume.

The cash flow statement is divided into 3 main areas:

• The operating cash flow shows how much cash is generated or consumed by the operations (running the business)
• The investing cash flow shows how much cash is being invested in capital expenditure (equipment, real estate, etc.)
• The financing cash flow shows how much cash is raised or distributed to investors and lenders

Looking at the cash flow forecast helps you to ensure that your business has enough cash to keep running, and can help you anticipate potential cash shortfalls.

It is also a best practice to include a monthly cash flow statement in the appendices of your bottled water brand business plan so that the readers can view the impact of seasonality on your business cash position and generation.

The initial financing plan

The sources and uses table or initial financing plan is a key component of your business plan when starting a bottled water brand.

It shows where the capital needed to set up the business will come from (sources) and how it will be spent (uses).

This table helps size the investment required to set up the bottled water brand, and understand how risks will be distributed between the business owners, and the financiers.

The sources and uses table also highlights what the starting cash position will be. This is key for startups as the business needs to have sufficient funding to sustain operations until the break-even point is reached.

Now that you have a clear understanding of what will go into the financial forecast of your bottled water brand business plan, let's have a look at the written part of the plan.

The written part of a bottled water brand business plan

The written part of a bottled water brand business plan plays a key role: it lays out the plan of action you intend to execute to seize the commercial opportunity you've identified on the market and provides the context needed for the reader to decide if they believe your plan to be achievable and your financial forecast to be realistic.

The written part of a bottled water brand business plan is composed of 7 main sections:

1. The executive summary
2. The presentation of the company
3. The products and services
4. The market analysis
5. The strategy
6. The operations
7. The financial plan

Let's go through the content of each section in more detail!

1. The executive summary

The first section of your bottled water brand's business plan is the executive summary which provides, as its name suggests, an enticing summary of your plan which should hook the reader and make them want to know more about your business.

When writing the executive summary, it is important to provide an overview of the business, the market, the key financials, and what you are asking from the reader.

Start with a brief introduction of the business, its name, concept, location, how long it has been in operation, and what makes it unique. Mention any services or products you plan to offer and who you sell to.

Then you should follow with an overview of the addressable market for your bottled water brand, current trends, and potential growth opportunities.

You should then include a summary of your key financial figures such as projected revenues, profits, and cash flows.

Finally, you should detail any funding requirements in the ask section.

2. The presentation of the company

In your bottled water brand business plan, the second section should focus on the structure and ownership, location, and management team of your company.

In the structure and ownership part, you'll provide an overview of the business's legal structure, details about the owners, and their respective investments and ownership shares. This clarity is crucial, especially if you're seeking financing, as it helps the reader understand which legal entity will receive the funds and who controls the business.

Moving on to the location part, you'll offer an overview of the company's premises and their surroundings. Explain why this particular location is of interest, highlighting factors like catchment area, accessibility, and nearby amenities.

When describing the location of your bottled water brand, you may want to emphasize its proximity to a large population center, as this could provide an excellent market for the product. Additionally, you could point out any natural features nearby that could be incorporated into the brand, such as a mountain range or a river. You may also want to highlight the potential for growth, both in terms of the local population and the potential for the brand to find success in other markets. Finally, you could point out the potential for sustainable sourcing of the water, as this could make the brand more attractive to potential customers.

Finally, you should introduce your management team. Describe each member's role, background, and experience.

Don't forget to emphasize any past successes achieved by the management team and how long they've been working together. Demonstrating their track record and teamwork will help potential lenders or investors gain confidence in their leadership and ability to execute the business plan.

3. The products and services section

The products and services section of your business plan should include a detailed description of what your company offers, who are the target customers, and what distribution channels are part of your go-to-market. 

For example, your bottled water brand could offer customers a variety of sizes, from mini bottles to large jugs, to meet any hydration needs. It could also have a subscription service, so customers can have their favorite water conveniently delivered to their home. Additionally, it could offer a variety of flavors, such as fruit- or vegetable-infused waters, to add a bit of variety to their daily hydration routine.

4. The market analysis

When presenting your market analysis in your bottled water brand business plan, you should detail the customers' demographics and segmentation, target market, competition, barriers to entry, and any regulations that may apply.

The goal of this section is to help the reader understand how big and attractive your market is, and demonstrate that you have a solid understanding of the industry.

You should start with the demographics and segmentation subsection, which gives an overview of the addressable market for your bottled water brand, the main trends in the marketplace, and introduces the different customer segments and their preferences in terms of purchasing habits and budgets.

The target market section should follow and zoom on the customer segments your bottled water brand is targeting, and explain how your products and services meet the specific needs of these customers.

For example, your target market might include health-conscious individuals who prioritize drinking clean, fresh, healthy water. This segment might include individuals who are health-conscious and actively seeking out healthy beverages over sugary sodas. They may also be willing to pay a premium for the convenience of bottled water, as well as for the assurance of quality and safety.

Then comes the competition subsection, where you should introduce your main competitors and explain what differentiates you from them.

Finally, you should finish your market analysis by giving an overview of the main regulations applicable to your bottled water brand.

5. The strategy section

When you write the strategy section of your bottled water brand business plan, remember to cover key elements such as your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.

In the competitive edge subsection, elaborate on what makes your company stand out from competitors. This becomes especially important if you're a startup, aiming to carve a place for yourself amidst established players in the marketplace.

The pricing strategy subsection should demonstrate how you plan to maintain profitability while offering competitive prices to attract customers.

Outline your sales & marketing plan, detailing how you'll reach out to new customers and retain existing ones through loyalty programs or special offers.

For the milestones subsection, outline your company's achievements to date and your main objectives for the future, complete with specific dates to set clear expectations for progress.

Lastly, the risks and mitigants subsection should address the main risks that could affect your plan's execution. Explain the measures you've put in place to minimize these risks, assuring potential investors or lenders.

Your bottled water brand could face a variety of risks that could potentially affect growth and profitability. For example, your bottled water brand may face the risk of disruption in the supply chain. This could be due to unforeseen circumstances such as natural disasters, labor strikes, or political unrest. Additionally, your bottled water brand could face the risk of competition from other bottled water brands. This could lead to decreased sales due to customers switching to a competitor's product, resulting in a decrease in profits and market share.

6. The operations section

In your business plan, it's also essential to provide a detailed overview of the operations of your bottled water brand.

Start by covering your team, highlighting key roles and your recruitment plan to support the expected growth. Outline the qualifications and experience required for each role and your intended recruitment methods, whether through job boards, referrals, or headhunters.

Next, clearly state your bottled water brand's operating hours, allowing the reader to assess staffing levels adequately. Additionally, mention any plans for varying opening times during peak seasons and how you'll handle customer queries outside normal operating hours.

Then, shift your focus to the key assets and intellectual property (IP) necessary for your business. If you rely on licenses, trademarks, physical structures like equipment or property, or lease agreements, make sure to include them in this section.

Your bottled water brand may have two key assets and IP: its logo and its packaging. Its logo could be iconic and recognizable, while its packaging might be modern and eye-catching. These two elements could be key to helping your brand stand out in a crowded marketplace. Having an attractive design for both the logo and packaging could help your brand to become synonymous with quality and help your product to stand out on store shelves.

Lastly, include a list of suppliers you plan to work with, detailing their services and main commercial terms, such as price, payment terms, and contract duration. Investors are interested in understanding why you've chosen specific suppliers, which may be due to higher-quality products or established relationships from previous ventures.

7. The presentation of the financial plan

The financial plan section is where we will include the financial forecast we discussed earlier in this guide.

Now that you have a clear idea of what goes into a bottled water brand business plan, let's look at some of the tools you can use to create yours efficiently.

What tool should I use to write my bottled water brand's business plan?

In this section, we will be reviewing the two main options for writing a bottled water brand business plan efficiently:

• Using specialized software,
• Outsourcing the drafting to the business plan writer.

Using an online business plan software for your bottled water brand's business plan

Using online business planning software is the most efficient and modern way to create a bottled water brand business plan.

There are several advantages to using specialized software:

• You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
• You are guided through the writing process by detailed instructions and examples for each part of the plan
• You can access a library of dozens of complete business plan samples and templates for inspiration
• You get a professional business plan, formatted and ready to be sent to your bank or investors
• You can easily track your actual financial performance against your financial forecast
• You can create scenarios to stress test your forecast's main assumptions
• You can easily update your forecast as time goes by to maintain visibility on future cash flows
• You have a friendly support team on standby to assist you when you are stuck

If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here.

Hiring a business plan writer to write your bottled water brand's business plan

Outsourcing your bottled water brand business plan to a business plan writer can also be a viable option.

Business plan writers are skilled in creating error-free business plans and accurate financial forecasts. Moreover, hiring a consultant can save you valuable time, allowing you to focus on day-to-day business operations.

However, it's essential to be aware that hiring business plan writers will be expensive, as you're not only paying for their time but also the software they use and their profit margin.

Based on experience, you should budget at least £1.5k ($2.0k) excluding tax for a comprehensive business plan, and more if you require changes after initial discussions with lenders or investors.

Also, exercise caution when seeking investment. Investors prefer their funds to be directed towards business growth rather than spent on consulting fees. Therefore, the amount you spend on business plan writing services and other consulting services should be insignificant compared to the amount raised.

Keep in mind that one drawback is that you usually don't own the business plan itself; you only receive the output, while the actual document is saved in the consultant's business planning software. This can make it challenging to update the document without retaining the consultant's services.

For these reasons, carefully consider outsourcing your bottled water brand business plan to a business plan writer, weighing the advantages and disadvantages of seeking outside assistance.

Why not create your bottled water brand's business plan using Word or Excel?

Using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write a bottled water brand business plan is a terrible idea.

Why?

For starters, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is very technical and requires both a strong grasp of accounting principles and solid skills in financial modelling.

As a result, it is unlikely anyone will trust your numbers unless - like us at The Business Plan Shop - you hold a degree in finance and accounting and have significant financial modelling experience in your past.

The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the 1990s and early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.

And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.

Also, using software makes it easy to compare actuals vs. forecasts and maintain our forecasts up to date to maintain visibility on future cash flows - as we discussed earlier in this guide - whereas this is a pain to do with a spreadsheet.

That's for the forecast, but what about the written part of my bottled water brand business plan?

This part is less error-prone, but here also software brings tremendous gains in productivity:

• Word processors don't include instructions and examples for each part of your business plan
• Word processors don't update your numbers automatically when they change in your forecast
• Word processors don't handle the formatting for you
• ...

Overall, while Word or Excel may be viable options for creating a bottled water brand business plan for some entrepreneurs, it is by far not the best or most efficient solution.

Takeaways

1. A business plan has 2 complementary parts: a financial forecast showcasing the expected growth, profits and cash flows of the business; and a written part which provides the context needed to judge if the forecast is realistic and relevant.
2. Having an up-to-date business plan is the only way to keep visibility on your bottled water brand's future cash flows.
3. Using business plan software is the modern way of writing and maintaining business plans.

We hope that this practical guide gave you insights on how to write the business plan for your bottled water brand. Do not hesitate to get in touch with our team if you still have questions.

Also on The Business Plan Shop

• In-depth business plan structure
• What is a business plan?
• How investors and lenders analyze business plans
• Key steps to write a business plan?
• Free business plan template

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