23Mar 2020

Mineral Water Plant Cost Calculation: Why Do You Need It

Mineral Water Plant Cost Calculation: Why Do You Need ItBottled mineral water is getting in trend nowadays. Our bodies are composed of around 70% water and we have this need to quench our thirsts from time to time for health reasons. As people get more health-conscious, more and more individuals are now switching to and patronising mineral water and choosing it over the typical tap water even if it means spending more. Investing in a water bottling business or establishing a mineral water plant can be both beneficial to your financial goals and your market community as its raw material, water, is almost everywhere to be found.

Mineral water project

There is no doubt that the mineral water industry is constantly improving. With this progress plus the wide target market, more and more businesses are getting interested in investing in a mineral water plant project.

As with any other businesses, starting a new mineral water business requires a lot of careful planning, research, and budgeting. One of the critical things that you need to consider when setting up a mineral water plant is the cost. The mineral water plant cost is computed considering a few significant factors, namely, the water source and the geographical conditions such as the size of the area, scope of the plant, location, and type of the water plant. But why is it really important to calculate the mineral water plant cost first before doing anything else? Here are some reasons why.

Cost is a fundamental consideration

Whether you are planning to build a full-scale mineral water bottle plant or a simple mineral water refilling station, you should be aware of how much you need to open and operate such a business. Most of the time, the decision of the entrepreneurs who are planning to open their own water plant starts and ends up with the cost. 

Undeniably, the mineral water industry is booming and experiencing a continuous increase in sales and revenue. The number of water plants and bottled water stations around the world is also exponentially growing. However, not all of them are able to survive and flourish. Some have stopped their operation. Many believed that the reason behind these closures is stiff competition. 

The fact is, competition is just partly responsible for the bankruptcy of some mineral water plants and stations. It is not all about getting less business, too. The primary cause is getting less profits. Some even experience negative profit. And the reason behind this is the failure to know and understand both the initial costs and the operation costs beforehand, thus, making it hard for the entrepreneurs to control the cost. 

It involves more than the machinery cost

If you are an entrepreneur who is interested in starting a water plant business, you will most likely start your research by asking Google about mineral water plant cost. Surely, you will also contact some companies and ask for a price quote. Most of the time, companies that provide water plant supplies only include the machinery costs in the quotation, and not the total project cost.

The calculation for the total cost of building and running a mineral water plant does not only include the machinery cost. You should also include the other important components as they will greatly affect the finances of your business. These costs include but not limited to:

  • Machinery and Equipment
  • Office Furniture and Software
  • Construction Costs
  • Land and Building
  • Marketing and Financial Costs
  • Legal and Consultancy Costs
  • Operational Costs
  • Utilities
  • Mechanical, Electrical, and Plumbing Work
  • Cost of Capital

Most of the less informed entrepreneurs who immediately start after getting the price quotation from the manufacturer are caught off guard by the large amount of money needed to build and run this business.

To make sure you get the right total project cost, consider seeking help from a qualified consultant or a licensed accountant. With the right cost calculation, you can be able to make a more informed decision.

Investment is not always equal to costs

The cost and investment, though they seem the same, are two different terms with two separate meanings. Most of the time, interested entrepreneurs will only ask about the mineral water plant cost. You will rarely hear someone asking about the mineral water plant investment.

To make this clearer, let us differential mineral water plant cost and mineral water plant investment. The mineral water plant cost is the total expenses you will be incurring throughout the life of your business to keep it running. Whilst, mineral water plant investment is the actual money you need to shell out to meet the mineral water plant cost.

Please note, though, that there are rarely fixed costs in running a mineral water plant. The costs will depend on various factors like your daily production target. The production rate will not always stay the same. It will depend on the demand for your products and the availability of supplies as well.

A business, no matter what industry it belongs or how small or large it is, has to be created for profit. One of the main reasons why you want to run a business in the first place is to earn some profit, right? The same is true with mineral water plants. But in order to earn profits, you need to know the costs first. This allows you to determine whether or not you will be getting enough or zero profit and whether or not you will pursue the project.

Have a professional consultant or accountant do the mineral water plant cost calculations for you. Pick the one who has a vast knowledge about the industry and the possible components needed in the calculation. This way, you can be able to get the most reliable quotation you will need for the business.