Starting Pure Water Business

hi nairalanders,i will like to start up a pure water business in the south south of nigeria,
do u think it will give me high return on investment?

hi,
i am an accountant with a servicing firm in lagos but we av a subsidiary that is involved in manufacturing of pure water. i am in charge of their accounts and it has been 4 like 2 years now so i can tell u at least sometin.

Purewater is a very good business because virtually everybody needs water, that means the market is readily available. but just like evry other good bis it has its own challenges and the challenges are quite much and could kill the bis if proper care is not taken.

i'll list some of the challenges and explain them in detail thereafter.
1. Saturated market
2. Use of bad vehicle, bad roads and quick depreciation of vehicles
3.Fraud, pilferage, etc
4. low selling price
5.Seasonal changes
6.Govt agencies
7. incompetent staff
8. Power supply(Diesel)
9. Overstaffing, high cost of labour, etc
10. source of raw(input) material
11. AND FINALLY ONE THING YOU MUST KNOW-[font=Lucida Sans Unicode][/font]THE BUSINESS IS DIFFERENT FROM THE OWNER. accountants call it THE ENTITY CONCEPT.

n now let me expain briefly.
1.Saturated market
   In lagos there are thousands of pure water producers, in our lg alone they number into hundreds, but do not be afraid there still exist a market for every body depending on the quality of your products, ur marketing strategy, ability to reach out to more people i.e having more than one vehicle at a time etc.

2.Use of bad vehicle, bad roads and quick depreciation of vehicles
 one factor affecting bis inn nigeria is bad road as it causes ur vehicles to wear out quickly so put that in mind and plan 4 it.
Use rugged vehicles that can stand the test of time e.g Nissan Cabstar, Toyota Diana etc PLEASE don't USE DIESEL ENGINE VEHICLES IT IS A VISA TO HELL, Have reliable, trusted  and readily available mechanics and technicians. if possible employ drivers who have mechanic experience.

3.Fraud, pilferage, etc
 have a good internal control system, employ reliable personnels, keep accounts-employ AATof ICAN or OND holders, preferably AAT holders, if they steal ur money u can report them to ICAN and appropraite measures will be taken .I am Proud to be One (AAT). keep a close eye on the accounts and accounting system of the company generally. pay ur staffs very well if u want to discourage them from stealing. don't pay more than the company can afford.

4.low selling price
 the contribution of purewater is much but the profit is quite low. in Lagos purewater is N50per bag(sp) the total variable cost of producing a bag is around N 25- N 28( cost of raw materials and direct labour). by the time other cost are deducted the total cost of a bag should be around N47. thus the profit is so small. i heard that in portharcourt a bag is N 100. if that be the case then u are in bis 4 real bliv me. but if u are to sell @ N50. then keep in mind that the   profit is small.

11. pardom me please as i move to the Last one. i av a lot of work to do.
THE BIS IS DIFFERENT FROM THE OWNER.
Place yourself on a salary from the bis. don't touch any other money aside from ur salary, ur salary must not be too much for the bis to bear. at the end of the year or ur accounting year end u can take from the reserves after making adequate provision for the survival and continuity of the bis.

u can reach me on 07030614637 if u av further questions or emial me @ mayordenali@yahoo.com .