WaterHut is a unique idea/concept prepared to enter in the Nepali retail bar and restaurant marketplace. Its products will contain of still drinking water and backed foods for health-conscious customers. The business partners, who have more than 10 years' operations experience in the bar and retail restaurant to the venture, are looking for a line of credit of $15,0000 to enable the starting and operation of WaterHut.
The water beverages (non-carbonated) are the still fashionable unique drinks after hedonistic coffee. The market has been developing strongly for the still water drinks for three years and now seems ready to pass in a new, enhanced period of development.
WaterHut will be owned by Dhan Bahadur Giri and Subash Chandra Giri Strange. The venture will be divided as an equal ownership, with Mr. Dhan bearing the title of Chief Executive Officer and Mr. Subash handling as President both shareholders are experienced in the retail bar and restaurant operations.
The new product still drinking water are more dissimilar from ready-made carbonated drinks sold by big water supply companies. Most of the soft drink companies produced in a small volume by business ventures and product quantity and quality is very high. Still drinking water delivers efficient flavors, counting nutraceuticals, that further separate them from mass-market appeal and soft-drinks to health-conscious peoples.
The product line, all bought from external sellers, will contain around 25 unique still water and functional beverage, furthermore, collection of freshly baked breads, cookies, muffins and other locally produced baked foods.
WaterHut is looking for $15,000 line-of-credit loan to shelter startup investment. Required equipment to purchase and deliver working investment until business earn some finance for itself. WaterHut is demanding this cash to be use as a line of credit, that the business can draw from as required.
The expected revenue from WaterHut in first year's operations is $109,600, which is expected to 20% increment in the second year. Initial in the third year second location for open new branch will be planned, that will enhance possibility of success for WaterHut. The income is likely to rise significantly after open second branch will be start to $222,400. Financing from bank is not likely to be mandatory after WaterHut's operation of the first year, according to the predictable cash flows.
1: WaterHut's Profit and Loss projection for 5 years.
WaterHut will own by two buddies Mr. Dhan Bahadur Giri and Mr. Subash Candra Giri who have more than 10 years' experience in hospitality and restaurant business. The both stakeholders recognized health-conscious progressive lifestyle of many Nepali people, and potential of functional still water market is very high. Partners beliefs that there is huge potential for success because research has been completed on appropriate location for still water beverage. Doing research on the market there is no existing such business in Nepal currently.
WaterHut a retail outlet in Kathmandu, Nepal will sell still water beverages. The outlet will contain of a seating area and service counter in addition to bar area. The beverages which is prepared on the bar premises will be serve in off-site or beverage bar. As well as, it will deliver products with prepackaged, counting backed goods.
2: Initial layout of the still water beverage bar
WaterHut will target its goods to Kathmandu's progressive and educated peoples. As stated by Agnishikha (2018) Kathmandu has one of the state's maximum per-capita rates of having natural beverages and foods.
A rental commercial, as well as small seating area and bar and drive-through opening area, will be in VIP area New Baneshowr, Kathmandu.
3: New Baneshowr Kathmandu, Source: Mapquest (2018)
WaterHut is in startup phase. The first location for WaterHut will be New Baneshwor, Kathmandu, Nepal. It is one of the major and business-oriented city/place of the Nepal. The main storage also will be same place which focuses more than 0.5 million peoples.
WaterHut will be owned by Dhan Bahadur Giri and Subash Chandra Giri. The venture will be organized as an equal ownership, with Mr. Subas Chandra Giri bearing title of Chief Executive Officer and Mr. Dhan Bahadur Giri as President. Both partners are very experienced in retail bar and restaurant operation.
The the part of alternative drink business still water is the fastest growing product. According to the (tradingeconomics.com, 2017) Nepal's most demandable products drinks. Such alternative beverage segments include, cold drinks, juices, teas, coffee and sparkling waters etc. (tradingeconomics.com, 2017).
The main product of the WaterHut includes still water drinks in 3 types:
It is processed using methods which remove microorganisms, counting related particles and flavors from the water.
Nutriceuticals is also still waters which have included extra minerals such as Calcium, potassium, vitamins (A, C and D) and other materials, such as caffeine etc.
It is bottled and imported from different country such as Canada, Alaska, Hawaii, France, Russia and Sweden. Functional still water will be offer in following price.
Furthermore, the size will be normal range from 1-20 litter plastic jugs at price starting from $2.50 to $25. The large size of exotic water will be sold for buyer carryout.
4: A sample of still water
WaterHut will sell these beverages, as well as prepacked products (containing baked products), for consumption in the off-site and beverage bar. Traffic free location has selected for the customers convenience
5: Sample Baked Product of WaterHut
Analyzing the market of the Kathmandu there is no business which completely focuses in functional still water. WaterHut will facilitate extensive flexibility in pricing which encourage for the making of brand loyalty and big deals of customers care, creating important blocks to entry for possible competitors (krishnapauroti.com.np, 2018).
Although, no devoted rental functional still water business exist in Kathmandu, however some established baked products retailers exist such as Krishna Pauroti.
6: Existing baked product business Krishna Pauroti since 1949 source (krishnapauroti.com.np, 2018).
WaterHut's products will be supply by many venders such as: H2H1, Aqua100, Hydration technologies, Soft Beverage, Krishna Pauroti etc. These venders supply many varieties products with different features such as bacteria-free processing, nutriceutical content, organic flavorings, including berries spices and fruits.
7: WaterHut's Sample Inventory
Most of the suppliers are from Nepal, some of the suppliers from Canada, Alaska, Hawaii, France, Russia and Sweden. Although they are not delivering their product
before in the WaterHut's opening area because lack of retail distributors. WaterHut's projected level of inventory will be 30 days.
WaterHut will get the success from the educating consumers regarding benefits and appeal of having functional water beverages and from delivering the quality products and services not offered in grocery supplies.
New outlets expansion will be start after 2nd year which include the planned of second year, an extension of corporate sales, and expanding the special outside promotional events.
The market for still water beverage is niche so WaterHut will take advantage from the rapidly growing market. The market for this kind of product has been developing strongly appealing basically to health-conscious consumer for all categories peoples. Although, Kathmandu covers one of the largest demographic target marketplace for still water beverage, in this community has no these products retailers. Market opportunities are discussed below.
According to the Statista (2018) Still water industry is fastest developing business in the US. Sales for 2017 was almost double then previous years. Other alternative drink beverage items include teas, sport drinks, juices, natural sodas and sparkling waters.
8: Still Water Sales in US in 2017 in million-dollar, Source: (Statista, 2018)
According to the Quartz (2018) most of the people drink still bottled water comparing to the sparking water nowadays, the consumption rate of still water increasing too high. As stated by market research firm Canadean (2018) universal per capita bottled for non-carbonated still water consumption has increased 9 liters per person in 1999, about 27 in 2013 and almost 200% increase in 2017.
9: Still water, Carbonation for the loss. Source: Quartz (2018)
10: Global water consumption, source (qz.com, 2018)
According to the above figure it shows the increment trends of global still water consumption and decrement trends of sparkling water consumption, therefore the market of still water going to be expand everywhere
11: US water consumption, source (qz.com, 2018)
Market demand for still water climbing for a few motives. The developing market of middle class family such as China, India and Nepal are progressively foregoing tap water for filtered and still water. As per Quartz (2018) the demand of bottled still water in china has grown by 230% since 2008, as stated by Zenith international (2018). The market projection of china will be more than US.
Analyzing the all the data in the case of Nepal it is very good market of still water which mainly targets to Nepali high-class family and international tourist.
In the Kathmandu, Nepal there is no any business on the functional still water. Which will be golden opportunity for the pricing and allow for great deal with consumers awareness and loyalty of brand, creating the barriers to entry for possible competitors.
Although, no functional still water business exists in Kathmandu, the still water is sold at entire Nepal's Market, Foods Retailers and other grocery shops.
12: Possible customers' profile for still water Pizza Hut, KFC etc., Source (ktm2day, 2018)
Kathmandu is capita city of Nepal and also capital of state 3. According to the (worldpopulationreview.com, 2018), population of Kathmandu is 1.3 million and main hub of metropolitan area more than 1 million population.
13: Population of Kathmandu in 2018, Source: (worldpopulationreview.com, 2018)
It is the main hub of many colleges and universities, hospitals as well as the several businesses. It has more than 4 world heritage area such as Pashupatinath, Boudhanath, Syambhunati and Shivapuri National park. It has many foods business and Kathmandu also known as the tourist hub of the Nepal. According to the The Himalayan Times (2018) 14.2% international tourist has visited the Kathmandu valley out of 100. As stated by Trekking in Nepal (2018) the total number of tourist in Nepal in 2017 was 940,218 (mountainmonarch.com, 2018).
14: Main Cities of Nepal, possible market in future after expansion.
WaterHut is a unique business for Nepal the given market size containing demographics. According to the individual's transaction average roughly $2.25, including ancillary products and functional still water, this business has potential to earn more than $220,000 in entire sales by 3rd years operation of WaterHut. More new location for expansion will be planned by end of WaterHut's 5th years operation (Ballowe, 2018).
Kathmandu has one of the big percentages of adult's population having a university degree of any Nepali city and it is generally known as center of progressive life style of Nepali peoples and also hub of the international tourists. Kathmandu has one of the nation's largest per-capita income rates of consumption natural beverages and foods.
15: Main customers profile of Kathmandu, Source (Hotel Nepal, 2018)
As suggested by Adams (2018) WaterHut's entire marketing plan will be to educate customers regarding the advantages of functional beverages and still water, and to promote available tools and techniques of WaterHut. Consumer will get access information about WaterHut through social media, Facebook Boosting, Search Engine Optimization (SEO), Creating Video Tutorials, ads on newspapers, promotional social events, and WaterHut's websites (Adams, 2018).
The targeted customers of WaterHut's will be health-conscious, well-educated and progressive who are curious in testing unique products and experience (Woschnick, 2018). It also focuses to those consumers who are dissatisfied with the limited choice of selections on drinking beverages (Newlands, 2018).
16: People love to drink functional still water beverages
There is no similar business exists in Kathmandu Nepal. This could be golden opportunity to make loyal customer for the still water products. Which will help to develop significance barriers to entry new competitor in the WaterHut's market. WaterHut will be located in high-demographic area of Kathmandu (The Economic Times, 2018).
An American research (2017) indicates there is no still water beverage exists in Nepal.
17: Large size still water sample with Jars design, it mainly focuses for home uses
As suggest by Maguire (2018) WaterHut's still water drinks will be deliver on following price:
Furthermore, large size of still water will be sold on customer delivery. The basic liter range will be 1 to 20 on plastic jugs and price range also will be $2.50 to $25.00 (The Economic Times & Maguire, 2018).
Main distribution network will be for the functional still water centrally located within WaterHut's target market area through the retail facility. Delivery of bottled water beverage to retailers, restaurants and corporate locations will be the second distribution channel. The stakeholders previous experience in hospitality business will be the major factor of success of WaterHut's market. Furthermore, distribution network will be built through different events such as concerts and bicycle race, social media campaign, Facebook page promotion, and other more temporary athletic and cultural events (Marketing MO, 2018).
As discussed by JOUBERT (2018) WaterHut will promote functional still water to customer through:
Facebook Page Boosting:
Creating the Facebook page of WaterHut adding different contents such as text, images, videos etc. and boosting in the targeted market and customer group. Facebook page has been created name: WaterHut
Continuously, advertising on newspapers help to educating the customer about still water and its benefits.
Search Engine Optimization (SEO):
Developing a WaterHut's website and regular updating the contents and blogs which will helps to bring top on the search engine like Google, Bing etc. which will help to easily reach to the customers.
A marketing campaign which will effort to shareholders approaches as exports on still water beverages. The text, images, audio and video martial will be broadcast through TV, Radio, YouTube, print media and other social medias.
Distributing promotional and educational brochures to houses within a one-mile area.
Discounts and Coupon:
Offering the discount and coupon for the repeated customer and other appropriate customer group such as cultural associations, organic gardening clubs and health food cooperatives.
Taking feedback is very important factor for business success. WaterHut's management need to conduct feedback or interview session with customer regarding the still water products. The question should be related to the customer experience, satisfaction and additional improvement on the related products. Conducting online surveys also could be effective to take suggestion from different customer group.
The central location of WaterHut will be New Baneshwor, Kathmandu, Nepal. The retail business will be a seating area and bar, as well as a driving-through window for ease. The minimum equipment requires because most of the products will be pre-packed. The section elaborates the operation plan of WaterHut.
WaterHut will be located at Ne Baneshwor, Kathmandu, Nepal. It is very attractive and desirable location for business. It has many residential, tourist hotels and many hospitals and colleges.
Second location will be determined after 3rd years operation, similarly third location will be determined after 5th years operation.
The size of land is 900 square foot, facility include seating and drive-up window will be hired. Additional facilities are a water bar, seating area and landscaping.
19: WaterHut's front bar sample
Above picture indicates the sample interior design of WaterHut. The furniture and infrastructure required to purchase as the products line will be imported from outside suppliers. The supplied from local venders all good will be pre-packed.
Main working equipment need by WaterHut is fixture and standard restaurant. The related equipment needed specialized to water bar, and needed money is about $50,00 of of total investment. No additional furniture equipment required until open the second location.
WaterHut partners, Dhan Bahadur Giri and Subash Chandra Giri will play major role in business operation in the initial time. To assist to the partners one part-time employee will be appoint.
WaterHut will be open 7 days in a week, with the following operational hours:
Sunday: - 7:00 AM to 9:00 PM
Monday – Friday: - 8:00 AM – 10:00 PM
Saturday: - 1:00 PM – 7:00 PM
The current location of WaterHut is completed all the codes as per environment law, accessibility for disable peoples, and working safety and regulations
The partners of WaterHut are well experienced in the bar and restaurant hospitality business. Bother have well experience related to management as well as customer contact task. Principals of WaterHut which need to consult by management are given below:
The share of the company is equal to both partner, Mr. Subash Chandra Giri bearing the title of Chief Executive Officer and Mr. Dhan Bahadur Giri bearing the title of president. The two partners will divide the day-by-day operation because it is small company. One or few part time employee will be appointed.
20: WaterHut company structure
Subash Chandra Giri has five years of experience in the restaurant industry. He has worked as assistance manager of the Tablela Restaurant and as a Manager in Global Hotel. He is 2008 graduates of Tribhuvan University. Dhan Bahadur Giri has six years of experience in the hospitality business. He has served as a General Manager of the Hotel Radisson. He is 2005 graduates from Kathmandu university.
The company is in small size and both partners are experienced so hire external consultant should be minimal. Primarily accountancy in nature, professional services are estimated to average less than $1,500 each year.
WaterHut will be first of its kind in Kathmandu, a main city area of more than one million peoples. The high-quality products of store marketed to Kathmandu's health-conscious peoples, are likely to lead the partners to economic achievement.
WaterHut's major goals are as follows:
After successful of WaterHut's business, the owners enhance the probable franchising opportunities for other main cities as well.
WaterHut's future plans are:
The main success of WaterHut came from the educating the consumer about appeal and advantages of still water product, and from the satisfying the customer through the quality products and services. Kathmandu has high percentages of young generation, who have progressive life style, the strategy should supportive for their life style.
There is no other business similar to WaterHut in this current market. This could be opportunity for the pricing flexibility and create the great deal, awareness and brand loyalty with customers.
Customer will get through the, newspapers and social media advertisement, promotional events and publicity effort through good public relation. The location is very prime it will also play main role in promotion and marketing.
Risk for WaterHut includes political regulation change, strike, blocked and environmental factor. Threats of new entry on same business.
Furniture and equipment can be sold, or it can easily convert into other kind of business like food restaurant and hotel etc.
21: Begging balance Sheet of WaterHut
Cash – $,1000 has been set in the WaterHut's account as a minimum balance. Both partner will be infusing $10,000 into company, and $15,000 will be available from line of credit.
Inventory – WaterHut panning to have 30 days inventory on-hand, to maintain the unexpected contingencies. The starting inventory planned according to the total cost of sales, that is $2,278, and confirming the company has this inventory level prior.
Accounts Payable – WaterHut will have minimum 30 terms with its vendors about inventory.
Plant and Equipment (net) – Currently required equipment for WaterHut is $5,000 will need to buy. The details list of equipment is given in appendix.
Line of Credit – It is assumed that $15,000 line-of-credit is available for WaterHut, and the initial required start-up fund is $4,250. The estimated interest rate is 12%.
Contributed Cash – The net cash investment of owner is $10,0000.
Other Assets (net) – It has also included the intangible assets which can be amortized for tax/accounting purpose. These assets cover Consulting and legal fees of $1,000, leasehold improvements of $5,000 and start-up miscellaneous expenses of $1,500.
22: Profit and Loss Account of WaterHut.
Sales – All are estimates will be based on expected sales for one WaterHut location, till march of 3rd year.
23: Five year's income projection of WaterHut.
Wages & Salaries – The salaries and wages planned based on hire 1, part time employee for 1st and 2nd year and 2 additional employees for 3rd year.
Cost of Sales – It is estimated based on company average information. Particularly, the cost of sale will be for, wall-in sales will have a 25%, corporate sales have a 22% and special event have a 24%.
Advertising/Marketing – WaterHut will use different media to promote the its products such as social media, newspaper, flayers, group discount and public relations.
Insurance, Rent, Utilities, Maintenance, and Travel – Produce the high expenses which will be shown after opening the second location.
Distributions – It is assumed that monthly basis $1,000 distribution to each partner for first 3 years. It is expected that it will increase slightly in 4th and 5th year.
A business plan is a roadmap of the business. In order to be a successful entrepreneur business plan should be good. First important thing idea of business should be unique, creative and innovative. The location, targeted market, promotional and financial strategy, competitor analysis etc. The goals and objective should be clear and achievable. It is recommended that the investors clearly analysis the business plan before making any investment decision.
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• Income Projection
• Expense Projection
Income Projection – 2019 to 2023
Expenses projection 2019 – 2023