How to Start a Water Purification Business [Step by Step]

Is Water Purification Profitable?

Yes, it is.

Firstly, the water industry is very profitable because of the surge in demand for clean water sources, which water purification businesses provide.

There’s also a surging demand for water purification systems, such as reverse osmosis, water filters, and carbon filter systems.

Furthermore, Precedence Research data predicts the global water purifier market will triple its current size to $120.38 billion by 2032, at an annual growth rate of almost 11 percent.

Finally, water purification businesses offer multiple services, including water quality consultations, installation, and ongoing maintenance, which helps generate substantial returns.

Key Steps to Starting a Water Purification Business From Scratch

Just as a building needs a solid foundation, a successful water purification business starts with a solid setup.

Here’s how to start your water purification business to increase your chances of success:

1. Conduct market research and develop a business plan

Comprehensive market research is a vital step in starting a water purification business. You’ll need it to better understand potential customers' needs and discover useful market trends.

Market analysis is also crucial for identifying your target market, whether homeowners or businesses.

The first step in conducting market research is discovering your target market’s current water supply challenges. 

Are they finding it hard to find pure water? Are they battling water contamination? Are the bottled water companies substandard? Target market surveys, online community forums, and community water health are great places to find answers.

Next, list every local business offering water purification services. Then, identify their business model, pricing strategy, and customer base. Also, review their customers’ complaints about the purified water produced by the systems the company installed.

By the end of your competitor analysis, decide on a strategy to differentiate your company, using competitors’ weaknesses. For example, let’s say your competitors charge for consultations. You could offer free water testing and consultations, etc.

After competitor analysis, create a target customer persona. You’ll need it to run effective marketing campaigns later. The persona should define your typical prospect’s location, income level, and property type.

Having understood the market landscape, write a detailed business plan. Outline your services, pricing strategy, marketing plan, and financial projections. It will help run your operations and prove your business idea’s viability to potential investors and creditors.

Here are some tips for writing a solid and comprehensive business plan:

• Emphasize the competitive advantage and unique value proposition you formulated after conducting a competitive analysis.

• List the different marketing strategies you plan to use, alongside a tactical plan for implementing them. For starters, focus on low-cost strategies such as partnerships, flyer distribution, etc.

• Outline your financial projections and plans for securing cash to cover startup costs. Your financial plan should also outline revenue expectations and break-even analysis.

Integrating market research into a well-constructed business plan lays a solid foundation for a water purification business set for growth and capable of effectively navigating the competitive landscape.

2. Register your business and obtain the required permits and licenses

Registering your new business and getting the permits and licenses helps you to comply with the law and run smoothly. 

Firstly, pick a business structure that fits your needs—whether it’s a sole proprietorship, partnership, limited liability company (LLC), or corporation. Your choice will impact your exposure to liability, tax filing, and business operations.

Sole proprietorships are the easiest business entity to set up and give you total control of decision-making. However, they will also expose your personal assets to business debts and legal issues.

Partnerships are similar to sole proprietorships, only that you share business control, profits, liabilities, and responsibilities with one or more people.

An LLC mixes the benefits of a partnership and a corporation. It protects stakeholders from liabilities by legally separating personal assets from the business’s debts.

Corporations, although more complex and costly to establish, provide the strongest protection against personal liability. Businesses favor this type of structure if they plan to secure funding from investors.

The decision on the structure also affects how you file taxes and what paperwork you need to file when registering your business.

For example, corporations experience double taxation on profits and dividends unless they qualify and elect to be treated as an S corp, which routes profits and losses to shareholders’ personal tax returns.

After picking a structure, register with the relevant local or state authority to get your business name legally recognized and obtain a Federal Employer Identification Number (FEIN) for tax purposes.

Next, secure the necessary permits and licenses. This is crucial because of your service’s impact on public health. Check with your local and state health authority to verify your region’s license requirements for water treatment businesses.

Typically, you can expect to pay for a general business license, water testing certifications, health department permits, and possibly environmental permits, especially if your operations involve discharging water or using chemicals. You may also have to get a special license from your state’s environmental protection agency.

Failure to obtain the correct permits and licenses can result in fines and legal challenges and potentially lead to the closure of your business, making this step critical in your setup process.

3. Invest in quality equipment and technology

One way to deliver quality services is to purchase high-quality water treatment equipment, tools, and materials.

You should use a reputable supplier or manufacturer with the latest water filtration and purification technology. To safeguard your investment, ensure they have a great reputation for delivering quality equipment and offer a warranty.

After purchasing the sophisticated equipment and tools, you need to consistently service and monitor them so they don’t drop in quality. However, doing so can be daunting, especially as you grow and purchase more equipment. Fortunately, ServiceTitan's Contractor Inventory Management software streamlines the process.

The tool helps water purification businesses manage inventory levels and initiate replenishments from one central location. This enhances operational efficiency and ensures techs always have the right tools and equipment.

It also streamlines the procurement process. Users can start a purchase order to replace an item immediately after a technician adds it to the customer’s invoice.

This makes it easy to maintain healthy stock levels without rummaging through clipboards and clunky spreadsheets.

Finally, the Equipment History functionality reveals the maintenance history of a tool or other equipment. This way, you can immediately know when they are due for replacement or maintenance, ensuring they are always in top shape.

ServiceTitan’s integrated Inventory Management tools help maintain operational continuity and cost-effectiveness.

With ServiceTitan, Brandon Mantel, president of Donamarc Water Systems Co., reassigned talented people to more important duties.

“I could save their dollars and wages and then move them over to something that's more productive with higher payoffs,” Mantel said. “For example, (ServiceTitan) has allowed me to (divert) my CSRs who used to do the data entry work to following-up with customers and backing up the service techs in a more practical way.”

For water purification businesses, using ServiceTitan's Inventory Management solution means better organization, reduced downtime, and the ability to meet customer needs promptly and effectively.

4. Develop a strong brand identity and marketing strategy

The water purification market is crowded with many companies offering the same services and making similar promises. The best way to stand out is to develop a distinct brand identity that captures your business's essence.

A strong brand identity inspires trust—a key element you need to have to attract and retain customers.

Furthermore, combining a strong brand identity with strategic marketing plans helps you communicate your value proposition effectively to potential customers.

Water purification businesses rely on ServiceTitan's Home Services Marketing software to automate and support their marketing efforts. 

The platform’s suite of tools helps you monitor performance, optimize for revenue, and obtain valuable data insights to adjust your marketing strategies. Such tools include the following:

• Email marketing: Create attractive emails using fully customizable templates and track open and conversion rates to identify areas for improvement.

• Local Services Ads: Appear higher on Google’s local search results and directly collect bookings and leads, generating more revenue.

• Reputation management: Manage your online reputation and respond to reviews from a single hub.

Furthermore, ServiceTitan’s Marketing Pro’s Ad Optimizer helps businesses track and optimize their digital marketing campaigns by revenue.

The Ad Optimizer also helps to train Google’s LLM to display your ads to high-quality leads, which translates into greater revenue. 

According to Lydia Brewster, warehouse and marketing manager at Aqua Clear Water Systems, “ServiceTitan is cutting edge. ServiceTitan's always growing. Do you want your business to be stuck to an old model or do you want to become the new generation? 

Nothing stays the same in business; everything always changes. I have software that changes and grows with me.”

ServiceTitan’s marketing solutions can help you tailor your marketing efforts to prospects, increasing the odds of success and lowering your acquisition costs.

What Are the Initial Costs for Starting a Water Purification Business?

Expect to spend money on specific items to start your water purification business. According to FINMODELSLAB, water purification business start-up expenses cut across the following items:

• Equipment Purchases: Expect to spend significantly on equipment for delivering safe drinking water. The total equipment purchase costs can range between $50,000 and $100,000.

• Operational Expenses: This covers utilities and employee salaries. They range from $40,000 to $80,000, depending on your business size and the typical living expenses where it is located.

• Marketing Costs: Allocating funds to promote your services to attract customers is crucial. You can expect to spend between $20,000 and $50,000 on marketing.

• Miscellaneous Expenses: This includes startup costs such as licensing, business insurance, and consumables. Plan to spend around $13,000 to $37,000 on miscellaneous expenses.

To summarize, a new water purification business owner should anticipate shelling out between $123,000 and $267,000 on startup costs. The actual amount depends on your location, company size, type of services, etc.

How to Get Your First Water Filtration Customers

After starting your company, the next huge challenge is securing customers. Luckily, there’s a clear roadmap you can use to do so.

• Build an online presence by creating a website and maintaining an active social media presence. Highlight the benefits prospects stand to gain by using your services and what differentiates you from competitors.

• Implement SEO strategies to rank high on result pages and build your presence on search engines.

• Network and form strategic partnerships with local business owners—such as real estate agents and contractors—who serve customers likely to need your services.

• Offer discounts and free water quality consultations to attract customers, whom you can use to generate reviews and referrals.

• Deliver quality customer service by training your team to foster word-of-mouth referrals.

Set Your Business Up for Success With the Right Technology

ServiceTitan’s advanced water purification software can help you grow your water purification business. Business owners like Chris Mather, chief executive at Atlantic Blue Water Services, leverage the tool to increase profits.

“I knew the ServiceTitan water treatment software was going to improve my business, customer experience, efficiency, closing more jobs, increasing average ticket,” says Chris.

ServiceTitan’s suite of tools and integrations helps automate key business operations, streamline marketing campaigns, and increase customer satisfaction.

For instance, its marketing scorecard ranks all campaigns by generated revenue and pinpoints high-performing zip codes to help you maximize your ROI.

The platform also has a robust Inventory Management system that ensures you maintain healthy and optimum stock levels, reducing downtime. Aqua Clear Water Systems’ Lydia Brewster can testify to this.

“It’s been pretty huge,” she said. “The first year, that’s your setup. That’s the foundation. Since then, we’ve grown just because of the simplicity, the communication. It just saved us so much time.“

Chris Nelson, Puragain’s national sales manager, who has used the software to grow sales, says, “The adaptability of ServiceTitan to work for our needs was absolutely incredible.” 

Finally, ServiceTitan's Field Service Accounting software helps water purification businesses maintain a healthy cash flow and track their finances. It automates front-office accounting tasks, boosting employee productivity. 

Key features include:

• Accounting for the front office: Facilitates daily financial transactions and customer billing with ease.

• Accounting periods: Enables precise financial reporting by managing different fiscal periods effectively.

• Accounts payable: Keeps track of what you owe to suppliers, ensuring timely and accurate payments.

• Accounts receivable: Manages incoming payments and helps maintain healthy cash flow by ensuring customers pay within agreed terms.

Together, these tools enhance financial accuracy and operational efficiency.

Now Over to You

Starting a water purification business demands careful planning. Take the time to understand the market needs and position your company’s messaging to meet them.

Also, build a strong brand identity to keep driving in customers long after your marketing campaigns, which reduces your marketing budget.

Ready to optimize your marketing campaigns and propel your business forward? ServiceTitan is at your service.

ServiceTitan is an all-in-one solution service providers use to manage inventory, optimize marketing campaigns, and improve customer service. Join thousands of other home service businesses nationwide who already use it.