New Wave

This is an unusually low-cost business to operate. At the center of operations is a purification system. After going through the filtration process, the water is collected in giant tanks and dispensed to customers via self-serve spigots. Except during the busiest of times, one employee can easily man the store, operating the cash register and helping customers out to their cars.

Water stores work well as very small or even solo operations (usually with the help of a part-time employee). Absentee ownership is also highly feasible, which is why many store owners branch out into multiple sites.

Start-up costs are modest for retail. With some frugality, it's possible to open a 1,000-square-foot location for less than $40,000, and start-up funds of $50,000 to $75,000 are apparently ample. Other than the usual leasing and buildout costs, the only major expense is the purification equipment, which runs close to $30,000. The main inventory--water--comes at rock-bottom prices; moreover, you make your own as you need it. Most water stores also sell coolers, bottles and miscellaneous filtration gadgets.

This article was originally published in the January 1997 print edition of Entrepreneur with the headline: New Wave.