Writing this article represents a bit of a milestone for me. I always figured that it was just a matter of time until someone seized the business opportunity of providing the public with the incredibly healthy H2 enriched water, and the time has finally arrived.
Richard Davidson is a long time reader of this blog and a fellow water enthusiast. Richard contacted me last spring asking questions about my H2 articles. After working through the H2 learning process, Richard introduced me to Walter Hoggan, the owner of a very successful water dispensing store in Salt Lake City, Utah. Walter’s picture accompanies this article. I must be getting really old, because he looks really young to me.
Walter’s Incredible Success Story
Walter is a quick study, and its wasn’t long until he was sharing his newly acquired knowledge about H2 with his staff and customers. The feedback from the customers trying the H2 products was extraordinary. The store had never experienced (in 22 years) anything remotely close to the testimonials from customers that were rolling in. Within three months, store revenues increased by 50% which is no small feat considering the store was already very successful to begin with.
Opening Any Store Can Be Scary
I assume that I’m not alone when I read about success stories and think “I could do that”. We all dream, but one person’s success story doesn’t necessarily translate into other people achieving the same success.
Opening a new store can be a scary undertaking. Setting up a new store is expensive and 80% of new businesses fail within the first two years. The high failure rate typically has nothing to do with whether the owner is smart or works hard. There are simply too many unforeseen factors that can come into play that can sweep away one’s life savings or leave you buried in debt.
Franchises are popular because they offer a proven track record of success that can be duplicated by following a well established system. As such, it is not a surprise that so many of the stores that you see in your daily travels are franchises which eliminate most of the risk of opening a new store.
But, and there is always a but, the cost of franchises is often prohibitive for most people. Typically, the rich get richer and the little guys end up working as employees for the store owners. Many employees are capable of opening their own stores but are held back by the lack of capital to buy a franchise, or they fear losing their life savings.
The Subway sandwich company has become the most successful franchise operation in America. The attraction to Subway franchisees is the low $15,000 franchise fee. However, the startup costs for a Subway location can reach as high as $400,000 and that is just the cost of getting started. Once the store opens, you still have to take into consideration the 30% food costs, staffing costs, rent/utilities, and then you have to pay 12.5% in royalty and advertising fees to Subway. By comparison, McDonalds charges a $45,000 franchise fee and startup costs typically range from $1 million to $2 million. Buying a franchise is not for shallow pockets.
The Math For A Water Store Is Much Less Scary
If you want to be your own boss, or start up a business for a grown-up child, or simply for investment purposes, a H2 water store has many advantages over other types of stores:
* The primary product is water which has a cost of goods sold of almost zero compared to food costs of 30% for restaurants and 50% for retail stores.
* Staffing costs are low as a significant portion of the sales are “self-serve” and restocking is never an issue as water is always available
* Inventory levels are minimal
* The startup costs are a fraction of the cost of most franchises
* While Subway sandwiches are not exactly healthy and there seems to be a location on every block, H2 enriched water is at the leading edge of a healthy lifestyle and there is only one store in America
Concerns To Consider About Opening A Water Store
New business opportunities always seem amazing when you first look into them. However, as you start to dig deeper, the reality that business is tough usually makes investors back off.
Here are some potential pitfalls of opening a water store:
* Not knowing what equipment to order and how to operate it, how much to pay, and who to hire to do the installation and maintenance
* Not knowing how to set up the shop to maximize efficiency and customer satisfaction
* Not knowing what inventory to carry
* Not knowing how to attract and keep new customers
As you can see, even starting up a slam-dunk business like a water store presents a number of challenges.
What Does It Cost To Open A Water Store
The following information is based upon what I have learned from talking with Walter. The information is based upon his and his father’s experiences of operating the Water and Wellness store in Salt Lake City for over 20 years. Believe me when I tell you that Walter is doing it right as his business is thriving and he has the numbers to prove it.
If you know what you are doing, it costs about $100,000 to open a well-equipped water store with an optimal layout. The start up cost will vary somewhat depending upon the number of water filling stations you incorporate, and the filtering and remineralization systems that you put in place. Painting, display shelves, and startup inventory actually represent a small percentage of the startup cost.
The keys to keeping the costs down when getting started are knowing what to buy and how much to pay. Once you are ready to open your business, you need to know how to market your products to the public and how to provide great service and offer good value so that you obtain and keep loyal customers.
Walter receives many inquiries from his customers that have to commute a few miles to his store who are interested in opening their own water stores. However, none of the customers who inquire ever go through with it. The people who inquire have the money to get started (many people can get their hands on $100,000 these days through savings, or inheritance, or putting a mortgage on a house), but they fear the financial risk associated with failure because they don’t have the knowledge or experience.
Walter Has Finally Agreed To Help
Like most of us, Walter likes the idea of growing his business and making more money, but Walter’s main priority is his young family and his store more than satisfies his financial needs. As such, Walter has no desire to increase the number of outlets that he operates and he is not a fan of the complexity or cost of franchising.
I admire Walter for his priorities, but that hasn’t stopped me from continually prodding him to share his knowledge and experiences with others. H2 enriched water is so important to your health that I believe it is one’s moral responsibility to share information about the benefits of H2 with the people that you care about.
After several months of testimonials pouring in from his customers, and me pounding away at him on Skype (we live about 2,000 miles apart), Walter has finally agreed to help others who want to start up their own H2 water stores as long as I help him with the H2 education aspect.
As such, Walter has been working on a business plan to help people open H2 water stores. His founding principles are:
1) Businesses owners would own their own business and license the Water and Wellness plus Walter’s ongoing technical and marketing support for a fee
2) Start ups would pay the actual cost (no hidden costs) plus a fee to cover education/training
3) A detailed Operating Manual would be provided that covers all aspects of the start up and operation of the store
4) “In-store” training at the Water and Wellness store in Salt Lake City would be available to anyone that chooses to participate… I love this feature
5) Access and volume buying power would be provided to all Water and Wellness product lines and suppliers
The Bottom Line
Walter Hoggan and his family have a long track record of success in the water dispensing business. Walter has agreed to share his knowledge and experience with anyone that wants to open their own H2 water store. Getting aligned with Walter will save you tens of thousands of dollars during the startup as the training and operating manual will help you avoid all of the mistakes that people make when trying to start up a water business on their own.
Getting aligned with Walter will cost you a small percentage of sales, but the improved buying and marketing power easily exceed the cost. Best of all, you don’t have to learn by your mistakes.
I have studied the business plan and it checks off all of the boxes. It is the the best business model that I have ever seen due to the combination of high profit margins, low cost of entry, and the fact that the business provides a product that everyone should be using.
Why am I promoting this?
I’m a retired water geek who has spent many years researching and writing about the benefits of drinking clean, healthy water. The introduction of H2 into water is a game changer when it comes to the improving the health benefits of drinking water. Every H2 water store that opens will bring those benefits to thousands of families. Nuff said!
If you would like to learn more, call Walter at (801) 904-2042. You will love his enthusiasm. If you want to email me, I will be happy to share what I have learned about Walter’s H2 water store business before you reach out to Walter.
- Tags: H2 Water Store