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The executive summary provides an overview of the different aspects of our service

Welcome to AQUAPURE, a unique water purification service in Roatan, one of the Bay
Islands of Honduras. The Executive Summary below will persuade the reader of the
benefits of such a service through summaries of each of the following sections, which we
included in our business plan:

• Service Analysis
• Market Analysis
• Marketing Plan
• Management Plan
• Financial Analysis
• Cross-Cultural Analysis
• Implementation Plan


This section thoroughly discusses the construction process, business location, and
contract agreements. The 400,000 tourists that visit Honduras itself and the amount of
tourists that visit our initial business location of Roatan is touched upon too.
Construction of the water purification system is not an easy process. We will need to
build and maintain the many parts of the system, which include the following: inner
structure, outer structure, tube well, inlet reservoir, and tanks. After construction is
complete, having the clients sign our contracts to either a long-term or short-term contract
will be our next priority. We will give them an option to sign a three-month, six-month, or
one-year contract. To gain customer trust and references, we will be offering a discount to
clients that refer us to other clients and that actually sign with us. Along with this, a
figure of the initial business location is given and shows the 23 vacation spots on the
island. You are able to tell visually with this figure that there are many places that tourists
go and visit in Roatan. This is ideal because tourists are our target market. Future
expansion possibilities are identified, which consist of Utila, Guanaja, and other places in
the Bay Islands.

This section recommends that the reader takes into consideration all these advantageous
situations and makes a better decision of investing into our company because of what
they have read.

This section examines, based on sufficient research about Roatan, whether or not our
service will be marketable in this region of the world. Problems with water contamination
are very big in this region and the number of tourism is increasing every year. We are
directing our service towards hotels and restaurants so that they can accommodate to their
guests in the best and safest way possible. Our plan is to make this problem not a concern
of tourists when deciding on Roatan as a location for vacation. The World Health
Organization estimates that 80% of all diseases are associated with contaminated drinking
water (Gelting, 1998). Studies have shown that drinking the water in this region is a
major concern and there are serious guidelines to follow when visiting the country.
Another attraction to this area is that Roatan’s hotel industry has grown which in turn
makes business for us better. Between 1985 and 1996 the number of Bay Island hotels
and resorts grew almost 400% from 17 (248 units) to 80 (954 units) (Stonich, 2000,
p.75). Because Roatan is very popular as a vacation destination, our service will help
make the experience while vacationing a lot more pleasant.

Although there is existing competition, we have concluded that our service is still
profitable in this region and will be easily marketable. AQUAPURE is unique in that it
will provide the best quality for a reasonably cheaper price. We are targeting the main
tourist locations such as three- to five- star hotels and restaurants and we plan to expand
our service in Utila and Guanaja, Bay Islands of Honduras.


The marketing plan outlines the marketing strategies we will implement. Our company
will begin to market the AQUAPURE name and service to prospective customers through
a web of sales pitches and advertising, concentrating on the tourist industry in Honduras.
According to Honduras Exporter Guide Annual 2003, in a span of three years (2000-
2002), Honduras has increased food and drink establishments by 76%, hotels by 41%,
and cruise ship visitors by 168% (Foreign Agricultural Service, 2003). We will begin by
hiring sales representatives to go and give our service pitch. Through a series of graphs,
demonstrations of how our service works, and personal charisma we hope to save on
advertising costs by gaining business from the high-end hotels such as Fantasy Island in
the French Harbor, Anthony’s Key Resort in Sandy Bay, and the Henry Morgan in the
West Bay. We plan only market to high-end hotels, resorts, and restaurants, thereby
establishing our service as high-quality, suited for the best.

For our advertising we plan to distribute informational brochures and place ads in travel
magazines, both of which will pinpoint which businesses utilize our service and
informing tourists of the possible diseases that they may contract without proper
preparations (diarrhea, malaria, headaches, etc.). According to the most recent available
data from The World Bank Group, tourism increased steadily every year from 2000-2004
and U.S. dollar income from tourists increased by 75% from the years 1999-2002

(Foreign Agricultural Service, 2003). Through our sales representatives’ pitches,
advertising through informative brochures, travel magazines, and the internet we plan to
take advantage of the ever-increasing tourism industry on Roatan and eventually
Honduras. By tapping into a relatively new market we plan to establish ourselves as a
reliable business entity that customers can appreciate and come to anytime for service


This section details how AQUAPURE will function as a compilation of talented team
members. Our team will work to provide water purification services for hotels, resorts,
and restaurants. We will have a main office in Roatan where we will base our operations.
AQUAPURE has seven founders who will hire the chief plant operator. AQUAPURE
will hire four employees at first. The team consists of a chief plant operator, lead
mechanic, lab technician, and security guard. The management division will implement
all policies of AQUAPURE.

The employee’s salaries will depend on their job title and experience. Yearly salaries will
range from $30,000 to $48,000. Each employee will be required to wear an AQUAPURE
uniform. Employees will work from 6am to 4pm everyday. Employees must meet all
qualifications in order to be considered for the position. There are many expansion
opportunities throughout Honduras, especially with the tourism increasing each year.
AQUAPURE plans to provide water purification services to other areas in Honduras soon
after Roatan is established.


This section demonstrates our prospective success and reveals the logic behind our
expenditures and revenues. AQUAPURE will begin raising capital through debt and
equity transactions. Our business will take a $1,000,000 loan from a financial institution
with an interest rate of seven percent and matures in ten years. We will also take a loan
valued at $460,000 from a private home lender with a 13 percent interest rate, and will
mature in ten years. Each member is also going to invest $20,000 into AQUAPURE,
giving our equity a value of $140,000. After raising our capital through debt and equity
issuances, AQUAPURE will have a total of $1,600,000 to make the purchases necessary
to start our water treatment business.

Our start-up costs will be equipment, which will buy for $1,500,000, the lease of our
office includes the purchase price of land valued at $40,000. Our office equipment, which
we will pay cash for, will cost $15,000. It should be noted that we will use straight-line
depreciation to amortize the water treatment equipment and the office equipment over
their useful life. Other start-up costs for AQUAPURE include the acquirement of patent
and business visas, with an estimated purchase price of $4,300 and $7,000. Our monthly
expenses will include: salaries expense of $13,500, depreciation expense on our water

treatment and office equipment valued at $8,458 per month, amortization expense for our
patent for $287, rent expense at a cost of $2,500, interest expense on our loans for
$10,817 and advertising expense for $880. We will also accrue utilities and repair
expenses that will vary each month.

We plan to immediately set aside five percent of our cash after our first sale, and start our
proceeds for a new wastewater purification system that will be available strictly for the
citizens of Honduras.


This section of the business plan will take an in-depth look at the cultural differences and
differences between the United States and Honduras. Honduras is a poverty stricken
country with a 28 percent unemployment rate, one of the highest in the Western
Hemisphere, almost 20 percent higher than other countries. We will provide jobs by
hiring security guards, as they exist virtually everywhere in Honduras. This may be a
difficult as commitment means nothing in their culture. Finding loyal workers to show up
everyday may be a challenge, as workers make commitments they do not plan to follow
through. In addition it is in their culture to not tell a superior that something is wrong, so
this will be a burden to our service. If an employee notices that something is wrong and
does not tell a superior, the problem could become worse.

Water pollution affects Lake Yojoa, Honduras’ largest source of fresh water, making our
business a necessity. Tourism boosts the economy in addition to providing jobs for the
many unemployed. Our service is aimed towards tourists, so we do not need to worry
about too many cultural differences, plus our service is simply providing clean water,
which is a necessity to all cultures.

This section outlines the precise implementation schedule for AQUAPURE. Maintaining
an implementation schedule for our business is crucial for our success. To make sure we
can start our business as planned, we will follow this schedule, which shows start and
stop dates of each task that needs to be completed.

After reading the above Executive Summary, the success of an aqua purification service
in Roatan, Bay Islands of Honduras, is apparent. We hope you find the time to read the
following business plan. Each section provides an in-depth look of the different aspects
of AQUAPURE and the benefits of an investment in our company. Please do not hesitate
to ask any questions or concerns that may come up.



“Blessed with turquoise waters, white sand beaches and dense foliage, [our resort]
Cabana Roatana is a heaven to those looking to escape from the stresses of daily life. We
are nestled in the center of Roatan's West Bay Beach in the Bay Islands of Honduras... a
true unspoiled tropical paradise.” (“Hotel Cabana Roatana”, n.d., intro section, para.1)

Do these words not form an image in your mind of the place you want to be?
This advertisement and similar advertisements can be found on the front of almost every
homepage of Hondurans´ five star luxury hotels and resorts, surrounded by unbelievable
looking pictures. It is almost a natural response to this, that Honduras and especially the
Bay Islands attract large amounts of tourists every year, making the tourism industry, as
reported by World Bank (2006), the largest industry of Honduras. According to a
Honduran newspaper, an estimated 738,667 people visited the country in 2006. The
tourism alone generated over $470 million (Arms, 2007).

However, most people do not know the other side of paradise when they decide to spend
their vacation in Honduras. According to the CIA World Factbook (2007), Honduras is
the second poorest country in Central America and one of the poorest countries in the
Western Hemisphere. Water Missions (2006) reports, that many Honduran citizens are
caught in a cycle of poverty, caused by the poor conditions of their drinking water. More
specifically, the Honduran citizens face several life-threatening diseases deriving from
the consumption of contaminated water. The contaminated water produces diseases such
as cholera, typhoid, and parasitic infections; all of which cause an intestinal disorder
known as diarrhea, which causes the high mortality rate of young children in Honduras.

Becoming aware of these problems the country has, Honduran tourists will want to know:
How does Honduras’s situation affect me and my vacation? Would I willingly shower and
brush my teeth with that water? Providing answers to this kind of questions from their
high demanding customers therefore becomes crucial and indispensable for exclusive
hotels in order to offer the unforgettable vacation experience they promised.

It is at this point where our service AQUAPURE comes into play to aid the hotels with
the problem. This introductory section will give an overview of the following:

• our service AQUAPURE

• our unique aspects
• our expansion plans

The following paragraphs introduce our service AQUAPURE and its unique aspects.

2.1.1 What is AQUAPURE?

Our service AQUAPURE is a water purification service. We intend to improve the
quality of the water supply for three- to five-star hotels and exclusive restaurants in
Roatan, the largest of the Bay Islands in Honduras. As Travel Guides of Honduras note,
Roatan is surrounded by the world’s second largest coral reef; white beaches, colonial
towns, and living cultures and therefore attracts more and more tourists every year
(“Honduras Tips”, n.d.). We will have a central water purification plant and install
underground piping leading to tourist hotels, resorts, and restaurants of Roatan, for
example West Bay Beach and Sandy Bay. Our purified water will then become available
to these hotels, resorts, and restaurants, in turn providing revenue for AQUAPURE. To
use our service, the hotels and restaurants will sign three-month starting leases, followed
by six-month and one-year leases. While payments for the three-month and six-month
agreements will be monthly, the one-year payments will be on a bi-monthly basis. The
hotels and restaurants we target have their main emphasis in offering their guests a luxury
and high-standard vacation and therefore will want to spend the money to provide their
guests with safe, clean water.

To give a first impression of the tremendous effects of water purification, figure 2-1
shows the result of a water quality test, conducted by Water Missions (2006). The left
side shows the result of a test run on water before any treatment. The dots are bacterial
colonies and pathogens, which can cause diarrhea. The right side shows the results of the
test run on the same water after the use of a purifying procedure. The difference is
obvious and enormous: The treatment eliminated all bacteria and pathogens.

Figure 2-1: Water Quality Tests

2.1.2 How are we different?

Our service AQUAPURE is unique in three important aspects. First, one difference to our
competitors is the connection between targeting the tourism while simultaneously helping
the country. We believe that Honduras´ tourism diversity is extraordinary and has huge

potential. Therefore, we believe that the tourism should not only benefit the country by
creating new jobs and bringing in money, but also by increasing development in
Honduras and giving Hondurans a higher standard of living. To accomplish this,
AQUAPURE plans to donate a portion of the proceeds earned from our business with the
hotels towards a second service intended for the citizens of Honduras. We will take a
portion of our proceeds to provide purified water to communities that still have unsafe
drinking water to make safe water available to all citizens, regardless of their socio-
economic status. World Bank (2006) identifies the specific problems Honduras has and
the desired development trends for the next years, which AQUAPURE incorporates in its
business goals. Namely, problems are still the high number of Honduran people without
access to clean water, the high mortality rate among children, and the high percentage of
people living on less than $1 (or $2) a day, all of which figure 2-2 shows.

Figure 2-2: Trends and Problems in Honduras

The special area focus AQUAPURE has is the second difference, which sets us apart
from our competition. Although we plan to expand our service within Honduras, we will
still specialize in the needs and the unique situations in Honduras, while our competitors
provide water purification globally in areas of current needs. Third, AQUAPURE will
provide its customers with high quality water for a reasonably cheaper price.


While Roatan is the perfect location for starting and promoting our service idea, it is only
the starting point. To help the country’s development, our long-term goal is to expand.
Our success in Roatan will enable us to offer our service to other parts of Honduras,
namely the Bay Islands Guanaja and Utila, both also famous tourist spots. Once our
service is established in these Bay Islands, we plan to target other departments in
Honduras (e.g., San Pedro Sola and Tegucigalpa). Figure 2-2, provided by the Honduran
Institute of Tourism (2003), shows a detailed map of Honduras. To indicate our target
area within Honduras, we highlighted Roatan, our initial service location, with a red
circle and the other locations, where we want to establish our service later, with a green

circle. Please review the service analysis section for further information on our expansion

Figure 2-3: Service Locations in Honduras

This introductory section provided an overview about AQUAPURE by pointing out our
main service idea, our unique qualities, which differentiate us from our competition, and
our expansion plans. The following pages illustrate our unique business idea and the
benefits of an investment in our company in great depth. Included in full detail are the
following sections:

• Service Analysis
• Market Analysis
• Marketing Plan
• Management Plan
• Financial Plan
• Cross-cultural Analysis
• Implementation Plan



An average of over 450,000 tourists visit Honduras a year (U.S. Department of
Commerce, 2000). Out of that amount, over 100,000 tourists visit the island of Roatan in
Honduras alone. Knowing the specifics of what you are selling to the client, the locations,
and the strategies of that business are important to running that business successfully.
Knowing this, we had to learn about our target markets’ income and specific locations to
help us gain a better sales strategy. We also needed to know how to construct and operate
the water purification system in a cost-effective and satisfactory manner.

While learning about all of these details we have come up with some questions that you,
the investor, may come up with. Now we know what problems, what advantages, and
what possible solutions we can get out of our business and we hope to have you and
ourselves benefit from it. In this section we will identify all of these specifics and we will
clarify any last minute questions that you the reader may have.

The system consists of many parts that will require us to have them properly installed by
our employees. One of the parts put into the system is the tube well, which is where the
water will come in from one side of the system. The outer structure will be made of
reinforced brick or concrete, whichever is available, and whichever one is more effective
for that environment. We will construct four internal walls at the same time as the outer
walls and these walls will separate the system into the following parts: the inlet reservoir,
the precipitation tank, the absorption tank, the water lock and the reservoir for purified
water. (Crisp, P.T. and Chowdhury, A.H., 2002, p.2)

After purifying the water, it will finally come out through the other side, through one of
the constructed taps. You can see all parts along with the outer structure in figure 3-1 and
the inner structure in figure 3-2.

Figure 3-1: Outer Structure of the Water Purification System


Precipitation Inlet Precipitation Absorption Water Lock Reservoir
Tank Tank Tank tank


Figure 3-2: Inner Structure of the Water Purification System

These figures are just a generalization of how our water purification system will work.

3.1.1 Precautions Taken

We will take precautions during and after construction of our water purification systems
to ensure that the system is always running effectively. With these precautions taken we
will be able to ensure low costs in the long run and give our clientele the satisfaction that
we have guaranteed them.

The height of the outer structure along with everything else in the purifying system will
be tall. This is due to the fact, that as we all know and as Hurricane Mitch told us in 1998,
the unexpected can happen. The tallness of the outer walls is to prevent flooding from
contaminating the water inside the purifying system and to help prevent the system from
hurricanes, possible human contamination, or possibly some other type of natural

We will be putting netting on top of the water system at all times in order to prevent
insects and other animals from entering and contaminating the water. Along with their
other duties, the employees that we hire will run regular maintenance tests to ensure that
the water has not been contaminated or that other problems with the system have
occurred, such as structural damage or other forms of damage that may prevent the water
system from working in the future. For more information pertaining to employee duties,
reference section

There are over 78 travel agencies in Honduras (U.S. Department of Commerce, 2000)
and every one of them is located in a location where tourism flourishes. We needed to
find a location in which our business could start and thrive with the tourism as well.

3.2.1 Initial Location

Roatan is 40 miles in length and has a total land mass of 49 square miles (Honduras Tips,
2007). It is an ideal place to
start off our business. As seen in
figure 3-1, Roatan contains
many hotspots for tourists in
which our target market is
located. In these locations you
can expect to see many hotels
and a much more profitable
community to sell our service

Figure 3-3: Various Tourists Spots in Roatan. Reasons for Roatan

We can see the reasons for choosing Roatan as a place to start our business by describing
the cities in Roatan. The French Harbor, which has the largest fishing fleet in the Western
Carribean and is quoted as “the economic motor of the island,” the Coxen Hole which is
the largest city and the capital of the Bay Islands, and the Sandy Bay which is said to be
“the cultural center of Roatan”. (Honduras Tips, 2007, para. 2)

These places have an abundant amount of tourists as proven by the amount of hotels, as
shown in Table 3-1.
Table 3-1: Hotels in Cities Located Around Roatan
Sandy Bay 9
French Harbor 8
Coxen Hole 4
Oak Ridge / Punta Gorda 3
Cayos Cochinos 2
Brick Bay 1
Milton Bight 1
Parrot Tree Plantation 1
Paya Bay 1

As seen in the chart and by the information given about the island, you can see that
Roatan is an ideal place for future growth and can be profitable. Future Expansion

Starting our company in Roatan is just a footstep for us. We are planning to eventually
pursue an even more profitable adventure, once our services have become known
throughout the Bay Islands. As you can see in Table 3-2, aside from Roatan being one of
the most marketable places in the amount of major hotels available, there are many other
locations in the Bay Islands that maintain a strong amount of major hotels (Roatan
Hotels, 2003).
Table 3-2: Number of Hotels on Different Islands


Utila 34
Roatan 30
Guanaja 11

For more information pertaining to the Bay Island and Roatan look at section 4.3.


“Sixty-eight percent of Honduran families are poor, mainly in rural and urban areas.
There are significantly more poor families in rural areas (75 percent) than in urban areas
(57 percent).” (UNICEF, 2007) Our target market does not consist of the local populous
living in Honduras. Unfortunately, Honduras is one of the most poverty-stricken
countries on the western side of the hemisphere. That is why we will be looking towards
the tourism industry.

Most people that travel to the Bay Islands are wealthy. This is why we will be targeting
the places they commonly choose to stay. A person of this stature will want this type of
service available to them and will see it as a big factor for choosing a hotel.

3.3.1 Why They Would Choose Us

People that come to Honduras need to know the statistical facts about the region. They
need to realize the dangers that Hondurans unknowingly face and because they do not
know about it, they make it unnoticeable to people traveling to their country too. In this
case we will use an example of an American traveling to Honduras. In figures 3-4 and 3-
5 you can easily tell that an Americans way of life, compared to a Hondurans way in life
does differ.

% of Population Using Improved % of Population Using Adequate

Drinking Water Sources Sanitation Facilities

100 100 100 100 100 100

100 95 100
87 87
80 80
60 60 54
U.S. U.S.
40 Honduras 40 Honduras
20 20

0 0
Urban Rural Total Urban Rural Total

Figure 3-4: Comparison of Improved Drinking Figure 3-5: Comparison of Adequate Sanitation Facilities

Even though this may seem unfair because we are using a first world country, we must,
because those are the type of people we plan on selling our services to.


Like any starting company we will have to give some leeway in order to make some sales
and have our customers take interest in us. Some of the ways that we will do this are by
giving some leniencies in some of our sale promotions. Eventually as time goes on and
we have our concrete customer base, we will gradually get rid of these factors that are not
letting us have a fully secure and profit maximizing company.

3.4.1 Contract Terms

It has come to our attention that since we are a new company most companies will have a
hard time signing a long-term contract with us. That being the case we have made some
special company start-up contracts. Here are how the contracts would go, as we gradually
experience growth in the market.

• A three-month starting lease, with a base fee.

• Payment of the base fee is only a onetime payment and helps us with the
construction of the water purification system.

• A six-month continuing lease after the use of the starting lease.

• Payment of the three and six-month contracts will be on a monthly basis.

• A one-year extended lease after the use of the three and six-month leases.

• Payment of the one-year extended lease will be on a bi-monthly basis.

• If the client decides to opt out of the contract there will be a termination fee. This
is to help us make up for our losses and helps us pay for the manual labor to take
out the water purification system. Extra Incentives

If a client refers us to another client and we sign that recommended client, we will give a
discount to the client that referred us.

Note: We cannot do this deal more than once. For example, a client who recommends us
to two people that we both happen to sign will not gain a bigger discount.

In conclusion, the specifics of the water purification system plan are all very important
parts on how well this business will run. The specifics of our water purification system,
our locations, our target market, and our sales strategy will turn us into a profitable
company at a faster rate. We will now have less of a hard time running our company.



In marketing I've seen only one strategy that can't miss -- and that is to market to your
best customers first, your best prospects second and the rest of the world last.
- John Romero (Museum Marketing Tips, p.3)

Best known for their great diving and the second largest coral reef in the world, the Bay
Islands is an ideal location for tourists. The largest of the Bay Islands, Roatan, lies about
50 miles from the northern coast of the Honduran mainland (Travel to Roatan, para.2).
Tourism is the primary industry for Roatan, making it the most prosperous region in
Honduras. It is for this reason that we have decided to target the tourist market for our
service. We feel that the tourist industry will be our best customers and as John Romero
recommends, the one strategy in marketing that cannot miss, is to market to our best
customers first. The tourist industry will provide us with prospective customers such as
hotels and restaurants. Tourism thrives on this island, with thousands of tourists traveling
here each year, not just for the sea, but also for enjoying the local culture, the mild
climate, and the fascination of Roatan’s colorful history (Roatan’s land for sale, para.5).
Because tourism is rising at a steady pace, we feel it would be in the best interest of our
customers to use our service in order to maintain their increasing numbers in tourism. We
plan to aid hotels and restaurants in accommodating tourists in the best and safest way
possible. Contaminated water has always been a problem and over the years has become
worse due to natural disasters. Health is one of the primary concerns of tourists and our
service will play a hand in making them feel safer when visiting Roatan. With our service
in motion, we foresee that Honduras will attract even more tourists.


4.1.1 Location
Central America’s second largest country,
Honduras, borders the Caribbean Sea, between
Guatemala, Nicaragua and El Salvador. Honduras is
the second poorest country in Central America and
one of the poorest countries in the Western
Hemisphere, with an extraordinarily unequal
distribution of income and massive unemployment.
The economy relies heavily on a narrow range of
exports and more recently tourism. (CIA, 2007).
Figure 4-1 demonstrates the location of Honduras,
its various regions, and its neighboring countries.

Figure 4-1: Map of Honduras

Unfortunately, hurricane Mitch hit Honduras the hardest and left devastating effects. One
of the reasons that we have chosen this location is Honduras’ problem with contaminated
water. We feel that this region of the world will need our service the most. Another factor
that attracted us is the fact that Honduras has a lot of tourism potential. With the
increasing number of tourists visiting every year, safety is important. With our service in
motion, we will alleviate tourist concerns regarding contaminated water so that they can
feel comfortable enough to bring their families. The Bay Islands

The Honduras tourist board best puts the description of the Bay islands when they say:

“The perfect islands in the eye of your dreams could not surpass the scenic beauty and
special appeal of the Bay islands of Honduras. Tucked away in a corner of the Western
Caribbean and protected by the hush of time, the Bay Islands are the classic portrayal of
forgotten tropical isles – unspoiled, sensuous, and totally irresistible.” (Stonich, 2000,

The Bay Islands are located in the western

Caribbean Sea from 30 to 64 km north of mainland
Honduras (Stonich, 2000, p.27). Several islands
within the Bay Islands include: Utila, Roatan, and
Guanaja. English is widely spoken here even though
Spanish is the official language of Honduras
(Honduras institute of Tourism, para.1).

The Bay Islands of Honduras offers a very different

world from that of mainland Honduras. People tend
to generalize Honduras as an unattractive site
because of its status as a third world country and the
extremely high poverty levels. What people need to
know is that this part of Central America also offers
beautiful and desirable locations. The Bay Islands is
in fact a very desirable destination that more people
have yet to discover. By bringing our service to the
Bay Islands, we are sure that it will be a lot easier
for hotels and restaurants to advertise their services
as more reliable and safer. As a result, it will Figure 4-2: Aerial Photograph of the Bay Islands
increase their business by attracting more tourists;
and in turn, help us gain a lot more profit by the
increasing level of water consumption. Figure 4-2,
which was retrieved from the bebelebe website,
shows an aerial photograph of the Bay Islands.

4.1.2 Climate
The Bay Islands has a tropical climate with a rainy season from mid-October to late
November. Roatan’s median temperature is 80 degrees Fahrenheit with equally warm
waters. Even during the rainy season, Roatan’s weather can be easily compared to that of
Florida’s; periodic showers with plenty of sun. (Bay Islands Weather and Climate
Overview, p.2, para.1).

Because of the reasonably hot climate in this region, water is very essential to tourists for
hydration. This is where our service comes into play. With our service in action, people
will feel at ease when wanting to drink water or use ice in their drinks. Tourists will no
longer have to worry about the dangers associated with contaminated water.


4.2.1 Local population

The Bay Islands is home to a diverse population. Roatan has a mixture of ethnic
backgrounds making it an attractive site. The special touch of Roatan is highly
accentuated by the different personalities of the people that live there (Honduras this
week, 2002). Several different cultures are evident among the 30,000 residents of Roatan,
including English, Spanish, Honduran, Payan Indian, Garifuna, and Antillean (Roatan
Bay Islands, 2001). English is the language predominantly spoken on the island even
though Spanish is the official language of Honduras. These are just a few of the
characteristics that draw tourists to this location but they are significant ones.


4.3.1 Tourism
Tourism is the primary means for the Bay Islands, and more specifically Roatan. Recent
data from the Ministry of Tourism indicate that, by 1997, approximately 93,000 tourists
visited the islands annually. (Stonich, 2000, p.74). Over the years, the number of hotels
has increased along with tourism. Between 1985 and 1996 the number of Bay Island
hotels and resorts grew almost 400% from 17 (248 units) to 80 (954 units) (Stonich,
2000, p.75). Because the tourist industry in Roatan is fairly new, we foresee that it will
become an even bigger industry in the near future. For this reason, we feel that this region
of the world will need our service the most. We will attract business from many high-end
hotels and restaurants.

One of the main reasons that people hesitate to visit Honduras is due to the health issues.
Because water contamination is one of the main concerns, we plan to attack it, and as a
result increase AQUAPURE’s business. With the increase in tourists, we expect the
consumption of water to be greater and increase AQUAPURE’s revenue.

4.3.2 Roatan
Roatan is one of the three largest islands that make up the Bay Islands and one of the
most popular tourist destinations. It is a beautiful tropical Caribbean island with stunning
views of the sea with its shades of blue, lush vegetation, and gorgeous sunsets (Travel to
Roatan, para.1). Roatan is a long island, measuring almost 40 miles in length and with a
total landmass of 49 square miles (Honduras Institute of Tourism, p.2, para.3). A couple
of the qualities that this island has to offer are the surrounding coral reefs and its
excellent diving locations.

Tourism is the primary industry for Roatan making

it the most prosperous region of Honduras. By
1996, Roatan had more than three times the
absolute number of hotel units/rooms than did Utila
and Guanaja (Stonich, 2000, p.75). Tourism thrives
on Roatan, with thousands of tourists traveling here
each year, not just for the sea, but also for enjoying
the local culture, the mild climate, and the
fascination of Roatan's colorful history. (Roatan’s
land for sale, para.5).

Due to Roatans growing tourism industry, we have

selected this island as the primary location for our
service. With the increasing number of hotels we
feel business will be available. Roatan is broken up
into seven sections, which are the following: Coxen
Hole, French Harbor, Parrot tree, West Bay, Sandy
Bay, West End and Oakridge/Punta Gorda. Table 4- Figure 4-3: Location of the Three Main Islands
1 demonstrates what each area has to offer. The
main features from each of the areas come from the
Honduras Institute of Tourism website. Figure 4-3
shows Roatan’s location and the two other main

Table 4-1: Seven different regions in Roatan

Coxen Hole Largest city, and Capital

French Harbor Economic motor of the island
Parrot Tree The best planned development in Roatan
West Bay Most popular part of the island sharing most tourists with West End
Sandy Bay Cultural center of Roatan
West End Most popular part of the island with the most tourists
Located on southern end, tourists are scarce
Gorda Coxen Hole

Coxen hole is the capital of the Bay Islands and the largest city. Even though it is not one
of the main tourist attractions, it is the main gateway to Roatan. Both the airport and the
dock where the ferry arrives are located in Coxen Hole. There is also a regular bus and
van service leading both, east towards French Harbour and Oakridge, as well as west
towards Sandy Bay and West End. (Honduras Institute of Tourism, para.7). This part of
the island also offers monetary services. When visiting the West End, which is the most
popular location for tourists, one must keep in mind that there is no bank so tourists must
do their monetary transactions in Coxen Hole. French Harbor

French Harbor is the economic motor of the island and the second largest community
(Honduras Institute of Tourism, para.12). It is a thriving business center, with one of the
largest grocery stores, banks, real estate offices, shrimp boat docks, and shipping
companies (Roatan’s land for sale, para. 7). Although it is not one of the main tourist
locations, it is still one of the well-known locations of the island. West End/ West Bay

One of our main locations for the distribution of our service will be on this area of the
island. The reason for our choice is that West End is the main tourist location of Roatan.
It offers a choice of many hotels, restaurants, shops, and great diving locations. Tourists
can easily reach West End by public transportation. A bus departs regularly in front of
H.B Warren in Coxen Hole and the ride is short and inexpensive. (Honduras Institute of
Tourism, para.52).

Because contaminated water greatly concerns tourists, we feel that by making the use of
water safe here, this site will attract even more tourists with the proper marketing

strategies. We also feel that by situating our service in this area, we will be able to see
profit at a faster rate. Figure 4-4 gathered from the Honduras Institute of Tourism website
demonstrates Roatan’s popularity by highlighting the variety of hotels and restaurants in
this area.

Figure 4-4: Tourist Map of West End’s Hotels and Restaurants

Because water contamination is a life threatening problem it is only obvious that there are
already existing companies that are tackling this problem. What sets them apart from us is
that most of these companies are using their services in multiple countries.
AQUAPURE’s primary competition is U.S Microbics Inc. This company has formed
World Wide Water Systems Inc., in a joint venture with C.TradeUsa, Inc., a water systems
integrator and International Project Development Firm, to provide pure drinking water to
people in Third World countries (Business Wire, 2004). What makes our company unique
is that we plan to target Roatan solely in order to put all of our efforts into making the
quality of our purified water superior to others. We are also only marketing our service to
high-end hotels and restaurants.

Another existing problem is that most of the hotels we plan to sell our service to already
have their own forms of purifying water. Many of the middle-class owners of the
moderately priced hotels are fearful of jeopardizing the health of their guests and are
taking steps to try to ensure them a safe water supply through the purchase of “pure”
bottled water (Stonich, 2000, p.138). Our solution to this problem is to provide them with
an overview of how much easier it will be to have AQUAPURE do the work for them at a
reasonably cheaper price. To their advantage, they will also be able to advertise their use
of our water purification company. This in turn will help people decide where they want
to lodge and eat.

As a team, we have chosen Roatan as the location to start our service because this area of
the world needs it the most. The market for our business is ideal in this location. Roatan
is the largest of the Bay Islands and the most prosperous region in Honduras. Roatan
attracts tourists from around the world every year and health risks are always on the top
of all concerns. Drinking contaminated water causes many diseases and we plan to
eliminate a significant amount of concerns with our service. We will provide our
customers with the highest quality and best tasting water. Not only will tourists feel safe
when drinking our purified water, but they will desire it while enjoying the beautiful
weather and amazing attractions that this island has to offer.



Tourism has become a burgeoning industry in Honduras, with tourist arrivals up 42%
from 2000-2004 (The World Bank Group, 2004). Expecting to seize on the ever-growing
tourist industry throughout the country, our company feels that by pinpointing the water
problem in Honduras and seeking to absolve tourist concerns over water-related diseases
we can gain a foothold in the water purification industry in Honduras, first focusing on
the Bay Islands and in particular Roatan. We plan to attract high-end hotels, resorts, and
businesses by presenting the image of a quality service that is both affordable and safe.
Our company feels that with the right sales pitch, accompanied by great service, a clean
image, and effective advertising, we should tap into the water purification market on
Roatan with as little problems as possible. This section describes how we will effectively
reach our target market and keep our customers coming back through the projection of
our image, sales pitch, advertising through print media and the World Wide Web to take
advantage of the booming tourism industry in Roatan and eventually the greater part of

The image of our company will be a key component to our success in establishing
AQUAPURE as a staple of the tourist environment throughout Roatan. We plan to
acquire business from high-end hotels, resorts, and restaurants with a fiscally responsible
sales pitch that will be both personable and effective, using our logo to project a clean
and professional image.

5.1.1 Logo

Our company logo, displayed in

figure 5-1, features a water-based
tone, complimented by a water
droplet falling into the “U” in
AQUAPURE. Our company
believes that our logo personifies
the purity, quality, and taste that
AQUAPURE water purification
provides. We want customers to
view our logo and remember the
great taste of water that our
purification provides,
subconsciously enticing
customers to keep coming back
Figure 5-1: AQUAPURE Company Logo

and provide our company with
additional business.


Introducing a new product or service into a market will always prove a difficult and
daunting task. Taking into consideration that AQUAPURE’s customer base will consist
of hotels, resorts, and restaurants in Roatan and eventually the greater part of Honduras,
we will initially rely heavily on our sales representatives’ ability to pitch our service to
these potential customers. After we have established our service in these businesses, we
can then begin to market to the public, advertising through travel brochures, travel
magazines, and the World Wide Web.

5.2.1 Sales Pitch

Upon the outset of our business, AQUAPURE will not necessarily market to the public;
we first need to establish our service in hotels, resorts, and restaurants. Having said this,
our sales people will represent the most important part of our marketing strategy. Our
sales representatives must have success when pitching our business for AQUAPURE to
gain any initial business. Tourists will only reap the benefits of our service and will not
pay AQUAPURE directly. Our business will come from the hotels, resorts, and
restaurants who will market their improved water quality to tourists, gaining more
business for our customers. After gaining the initial business our company can move to
marketing to the public through travel brochures, magazines, and the World Wide Web,
informing the public of the water problem in Honduras and showcasing the advantages of
our water purification service and displaying which businesses currently use our service.

We plan to have three company representatives go to these businesses (hotels, resorts, and
restaurants) and give a sales pitch directly to management. These representatives will use
demonstrations showing exactly how our water purification system works including a
powerpoint presentation with information such as costs and advantages of using
AQUAPURE compared to other methods of water purification. Sales representatives will
also distribute attractive brochures that will cover the basic information laid out in their
presentation. AQUAPURE will require these sales representatives to know our company
in absolute detail, so any questions that may arise from potential customers can have a
concrete and competent answer.

5.2.2 Print Media

AQUAPURE will advertise most of our print media through brochures and magazines.
As stated earlier, our company must initially have success in pitching our company to
prospective customers before we can market to the public.

Once we have established business throughout Roatan we can then use brochures to
market ourselves to prospective tourists and attract these tourists to come to businesses

that utilize our service. The brochures, shown in figure 5-2, will feature attractive
pictures of our customers’ hotels, resorts, and restaurants on the cover with an
AQUAPURE logo above (Roatan & Bay Islands Visitors & Travel Guide, 2003). The
insides of the brochures will continue with the picture theme, but also provide detailed
information on our service and feature some of the most visited businesses that utilize
AQUAPURE water purification.

Our travel magazine ads, displayed

in figure 5-3 below, will try to
demonstrate a lighter theme, yet still
accomplishing our goal of informing
Informational Brochure tourists of the water problem in
Roatan. AQUAPURE believes that
by having lighter themed advertising
campaign we will fit with most of
the other ads in travel magazines.
The ads will use various graphics to
entice tourists into finding more
information about the water problem
in Honduras, which we will have
available through our web site. If
tourists can create concern among
businesses in Roatan, this will
convince these hotel, resort, and
restaurant owners to act on the water
problem and come to AQUAPURE
in need of our water purification
Figure 5-2: AQUAPURE brochure cover service.

Don’t make the same mistake twice!

Next time drink AQUAPUREwater

Have you been a victimof contaminated water Provided to hotels and restaurants throughout Roatan
when traveling to Roatan?

For more information visit our web site at

Figure 5- 3 : Potential AQUAPURE Travel Magazine Advertisement

5.2.3 World Wide Web

The internet has become a great way for businesses to advertise cheaply and effectively
in the last decade. AQUAPURE plans to develop its own website
( where prospective customers can read information about our
service, view pictures of our filtration system and how our service works, see the
advantages of AQUAPURE water compared to other purification methods, ascertain how
to contact the AQUAPURE team, as well as decide if AQUAPURE is right for their
business. In addition to these attributes, we will also feature a section on our web site
informing tourists of the water problem in Honduras, citing figures such as 40 out of
every 1,000 children die in Honduras before the age of five from diseases associated with
unsafe water (Finley, 2003). We believe this information will lure tourists into looking to
hotels, resorts, and restaurants that use our water purification service, giving tourists a
clear conscience when drinking the water on Roatan.

We will also advertise on various tourism web sites such as These
web sites can help to develop and promote through search engine optimization, pay-per-
click positioning, website hosting, as well as additional promotional activities through
newsletter services, which will save AQUAPURE money on advertising expenses.
During our first year our initial internet advertising costs will exceed no more than $150
(Roatan & Bay Islands Visitors & Travel Guide, 2003). After establishing our company
in Roatan and gaining revenue we can then think about promoting AQUAPURE through
additional travel web sites and increasing web-advertising costs.

According to TravelAgent magazine, Central America has become a booming tourist
vacation destination and in 2005 logged the highest growth in tourism of any region in
the world at more than 14 percent. The Honduran government is developing
infrastructure to attract international hotel chains and increasing marketing and promotion
efforts. Augusto Huescar of the World Tourism Organization (WTO) has stated that
“Honduras has a lot of tourism potential. Many travelers are looking for new destinations
to discover and Honduras offers authenticity with its rich culture, history, and nature.”
(Mangan, 2006, p. 62).

Roatan in particular is targeted for further development. Only 1,200 hotel rooms exist
currently on Roatan, but with 400 new rooms currently under construction with more
slated for the future, these new additions will have tourists flocking to Roatan at a much
higher rate than previous years (Mangan, 2006, p. 62). A new high-speed ferry will cut
travel time from the main island of Honduras to just over an hour, making it easy for
tourists to travel to Roatan even if their hotel lies on the main island of Honduras

(Mangan, 2006, p. 62). Table 5-1 shows how tourism has expanded throughout Honduras
in the years of 2000-2004. As this data shows, tourism has grown and continues to grow
in Honduras and AQUAPURE plans to capitalize on this continuing expansion (The
World Bank Group, 2004).
Table 5-1: International Tourism to Honduras 2000-2004

2000 2001 2002 2003 2004

Number of 471 518 550 611 672

Arrivals (in
Number of 277 279 285 277 295
Departures (in
Tourist 194,000 205,000 221,000 256,000 269,000
(current US$ in
Tourist 6% 6% 6% 7% 6%
(% of total

5.3.1 Marketing Advantages

With the recent tourism growth in Honduras, hotels, resorts, and restaurants will have
more funds available to upgrade their facilities. AQUAPURE plans to take advantage of
the incoming revenue by marketing our service during this boom in tourism. Prospective
tourists concerned with the Honduran water problem will motivate these hotels, resorts,
and restaurants to acquire our service to help alleviate the concerns of tourists. If these
businesses can minimize tourist concerns about potential diseases from harmful water it
helps the businesses as well as AQUAPURE, in turn providing additional business for
each party involved.

5.3.2 Marketing Concerns

Good relationships with prospective customers are essential if AQUAPURE is to
penetrate the water purification market (Foreign Agricultural Service, 2003). Our main
concern in breaking into the water purification market in Honduras lies in our sales
representatives’ ability to gain initial business from hotels, resorts, and restaurants. These
representatives must have the knowledge and people skills necessary to market our
company as a water purification service that sets itself apart from the competition.

5.3.3 Seasonal Marketing
The high-tourist season in Honduras and in particular Roatan begins in February and ends
in late April. Highlighted by Semana Santa, a celebration during the week leading up to
Easter, hotels and resorts fill up quickly in anticipation of this celebration (Roatan & Bay
Islands Visitors & Travel Guide, 2003). During our first few years AQUAPURE plans to
market to potential customers during the months leading up to the busy tourist season,
mainly during the fall and early winter months. We feel that by using this marketing
strategy, by the time tourist season arrives in Roatan, we will have established our service
in enough hotels, resorts, and restaurants to market our service to the public through
travel brochures, magazines, and the internet. As mentioned earlier, we can minimize our
marketing costs by having businesses that utilize our service print a small caption
informing tourists of the water quality provided to our customers’ businesses by


After successfully establishing ourselves as a reliable, safe company and gaining a good
percentage of the water purification market in Roatan, which we conservatively estimate
between five and seven years, we plan to expand marketing throughout other parts of
Honduras. Reasoning that because the company has established a first-class reputation
throughout Roatan, recommendations will come from customers (hotels, resorts,
restaurants) and marketing to other Honduran vacation destinations will be much more
economically feasible and just as if not much more successful than our initial marketing
strategy in Roatan. As of December 4, 2006, more than 900 hotels with 20,453 total
rooms exist throughout Honduras, with more than a third of those rooms built within the
past five years (Mangan, 2006, p. 62). With the continuing expansion provided by
government funding, AQUAPURE hopes to expand our business and increase our
customer base throughout the country.

Our company plans to capitalize on the ever-increasing tourist industry that Honduras has
become known for. Water related diseases have become a constant worry for tourists
coming into the country and we hope to squash these concerns with our water purification
service. Through our sales representatives’ pitches, advertising through informative
brochures, travel magazines, and the internet we plan to take advantage of the ever-
increasing tourism industry on Roatan and eventually market to the greater part of
Honduras. By tapping into a relatively new market we plan to establish ourselves as a

reliable business entity that customers can appreciate and come to anytime for service



Motivational coach and author Brian Tracy once said, “Rule one of management in
everything you do is to manage others the way you would like to be managed” (Brian
Tracy). AQUAPURE will base its management off of this quote. The management will
treat each employee fairly and value each one. The AQUAPURE management team will
create a friendly atmosphere, which will lead to a friendly company as a whole.
AQUAPURE will work to improve the water situation in Roatan, Honduras by providing
water services for many hotels, resorts, and restaurants. This section of the plan will go
over topics such as company organization, employee policies, Honduras policies and
expansion opportunities.


AQUAPURE has seven founders, Erika Wiese, Lena Meyer, Leo Solis, Mitch Sandberg,
Ryan Kendall, Brandon Vena, and Casey Hutchinson. The founders will remain in the
U.S., except for Lena Meyer who will travel to Honduras to oversee the company. Figure
6-1 below shows the organization of AQUAPURE.

Chief Plant

Lead Mechanic Lab Technician Security Guard

Figure 6-1: Company Structure Diagram

6.1.1 Employee Positions
All employees except the marketers and legal representative will be official AQUAPURE
employees. Chief Plant Operator

The chief plant operator will be in charge of the entire plant. The chief plant operator is in
charge of the lead mechanic as well. He or she is also in charge finding and extracting the
water from the wells. Lead Mechanic

The lead mechanic will be held responsible for all water purification equipment repairs.
He or she will also be responsible for running the equipment. Lab Technician

Performs daily tests on the water within the parameters of the plant to make sure the that
the water is safe to drink. Security Guard

The security guard will patrol the plant’s premises to ensure that nobody touches or takes
any of the water. Marketers

Although they will not be a part of the AQUAPURE team, AQUAPURE will hire people
to market the service. Legal Representative

AQUAPURE will hire a legal representative to help with licensing and other legal issues.


The following section of the management plan will go over the employee salaries and

6.2.1 Employee Salaries
According to the Country Reports on Human Rights Practices, the minimum wage in
Honduras depends on the type of industry and the size of the company. The minimum
wage in Honduras ranges from $3.24 (61.3 lempiras) to $5.17 (97.8 lempiras)
(Acceptable Conditions of Work, 2005, par. 1). AQUAPURE will pay well above the
minimum wage. Table 6-1 below shows the salaries for each of the employees at
AQUAPURE. AQUAPURE employees will be paid yearly.

Table 6-1: Employees’ Salaries

Position United States Honduras

Chief Plant Operator 48,000 United States 906,719 Honduran
Dollars(USD) Lempira(HL)
Lead Mechanic 42,000(USD) 793,379(HL)

Lab Technician 42,000(USD) 793,379(HL)

Security Guard 30,000(USD) 566,699(HL)

6.2.2 Hiring Procedures

AQUAPURE will hire employees based on a criterion that deals with their particular
employment. The founders of AQUAPURE will hire the chief plant operator. The chief
plant operator will be responsible for hiring the rest of the AQUAPURE team. Employee Qualifications

AQUAPURE requires a background check as well as a drug test for all employees.
Honduras citizenship is required for all positions as well.

• Chief Plant Operator

-Must be a qualified T3 (which means they are capable of running a water
treatment plant)

• Lead Mechanic
-Qualified T2 (which means he or she is able to run and repair the equipment)

• Lab Technician
-Bachelor of Science in Chemistry
-Water treatment experience

• Security Guard
-Prior armed forces experience
6.2.3 Employee Attire
AQUAPURE will have a strict dress code. Any employee not in uniform will not be
allowed to work. The chief plant operator, lead mechanic, and lab technician are required
to wear a long sleeve collared shirt that AQUAPURE will provide. These employees
must also wear work pants provided by AQUAPURE. They must also wear steel-toed
boots at all times.

6.2.4 Probationary Period

A 90-day probationary period is required upon initial employment. The purpose of the
90-day probationary period is to provide the Chief Plant Operator a means by which they
can evaluate the lead mechanic and lab technicians work. If the employee proves
unsuitable for the job, the Chief Plant Operator will terminate the employee prior to the
end of the probation period.

6.2.5 Work Hours

AQUAPURE employees will work from 6am to 4pm everyday. Employees may also
need to work additional hours if an emergency occurs.

6.2.6 Personnel Incentives

Employees of AQUAPURE will be paid above the minimum wage in Honduras.

Employees will be allowed to take a two-week paid vacation each year.

Table 6-3 below created by the World Bank Group shows all 13 procedures AQUAPURE
must do in order to start the business in Honduras.

Table 6-2: Startup Procedures and Costs

Nature of Procedure (2006) Proc# Duration Cost

(Days) (US)

Procure a certificate of deposit at a local bank; pay the registry fee 1 1 0.00

Constitute the company before a Notary Public, who is to draw up the instrument of 2 2 384.22

Publish the registration notice in "La Gaceta", the official journal or an ordinary 3 1 15.00

Purchase the bar stamps from the Banco Atlántida S.A 4 1 0.00

File the articles of incorporation with the Mercantile Registry at the Chamber of 5 7 19.48

Apply for the tax identification code (Registro Tributario Nacional, RTN) at the 6 1 0.00
Dirección Ejecutiva de Ingresos (DEI), Ministry of Finance

Acquire legal accounting and minutes books 7 1 180.00

Apply for an operational permit (Permiso de Operación) from the municipal authorities 8 30 122.50
via an attorney

Register for Sales tax and acquire the authorization of the company books 9 7* 0.00

Register at the Hand Labor Training Institute (Instituto Nacional de Formación 10 1* 0.00
Profesional - INFOP)

Register at Social Security Institute (Instituto Hondureño de Seguridad Social - IHSS) 11 7* 0.00

Register at Social Fund for Housing (Régimen de Aportación, (RAP) al Fondo Social de 12 1* 0.00
la Vivienda (FOSOVI))

Register with local and national Chambers of Commerce 13 1* 0.00

Totals: 13 44 $721.20


According to the Honduras Institute of Tourism, “The Honduran Government In 1992,
created the tourism incentive law (TIL), which allows investors a 10-year holiday on
profits gained from any government-approved project in tourism”( Law of Tourism
Incentive, 1992, pg 2, par 6.). The tourism incentive law will help AQUAPURE increase
profits in Roatan. However, the law covers the entire country as well; AQUAPURE plans
to expand throughout Honduras after AQUAPURE is well-established in Roatan.

6.4.1 Possible Locations

AQUAPURE is already researching other possible locations in Honduras. Tourism
Minister Ricardo Martinez says, “The government is planning to boost the performance
of tourism industry by building more hotels. An estimated $22 million has been invested
by private sectors for the construction of two resorts. The government has allocated $15
million to improve the public infrastructures of the city of Tela” (Honduras anticipates
increase in hotel construction, 2007, Vol. 66 pg 34). AQUAPURE will continue research
on new developments throughout Honduras and search for possible sites for water
purification systems.

AQUAPURE’s management will create a friendly work environment while providing
purification systems throughout Roatan, Honduras. AQUAPURE will also maintain the
purification systems and ensure that the customer is satisfied.



The Bay Island Environmental Management Project (PMAIB) is looking to, “Improve the
conditions and quality of life for inhabitants of the islands by improving the drinkable
water supply” (Washington Times Advertising Department, PMIAB Protects Island
Ecosystem and Improves Quality of Life for Islanders, 2000). Although Honduras is a
third-world country and half of its citizens live in poverty, AQUAPURE feels there is
great potential on the island of Roatan to achieve success as a provider for purified water.
Since Roatan is the biggest attraction cite amongst tourists in the Bay Islands (Roatan &
Bay Islands Visitors & Travelers Guide, 2003). AQUAPURE will be a purified water
supplier to the high-end hotels and restaurants in Roatan, Honduras. We plan to purchase
our start-up costs that will be mandatory in the beginning phases of our business. These
costs include: water treatment equipment, office equipment, office plant, patent, and
business visas. After acquiring our start-up costs, AQUAPURE will accrue monthly
expenses such as: salaries, rent, advertising, depreciation, amortization, income tax,
interest, utilities, and repairs expense. Due to the large amounts of tourism throughout
Roatan and a high demand for purified water, we can generate sufficient results in
revenue and profit for our business. As we continue to expand our business and build our
clientele, AQUAPURE will also create an account accumulating over time intended to
provide purified water for the citizens of Honduras. Since nearly half of Hondurans live
in poverty, we will offer purified water at an affordable price so that the citizens can
adopt a healthier way to consume water.

AQUAPURE plans to effectively invest every dollar into our water treatment business as
if that dollar was our last. What does this exactly mean for our investors? By budgeting
and balancing our money towards our start-up costs and our monthly expenses,
AQUAPURE will have more money available to return a respectable rate to our
investors. Our budget plan will also allow us to cover any sudden expenses that arise
during business operation, assuring our investors the security of their investment in

7.1.1 Start-Up Costs

Our start-up costs are the mandatory expenditures taken during the beginning phases of
our business and serve as the official opening of AQUAPURE. Our start-up costs consist
of five components, which are: water treatment equipment, office equipment, office,
patent, business visas. Below, figure 7-1 shows the distribution of each start-up costs in
relation to the total amount of cash needed to acquire these assets. The expenditures
towards our start-up costs will use 97.9% of the capital AQUAPURE raises through debt
and equity issuance.

Water Treatment

Business Visas


Figure 7-1: Distribution of Start-Up Costs Water Treatment Equipment

AQUAPURE has agreed to buy our water treatment equipment on account with maturity
due at the end of ten years. The purchase price of AQUAPURE’S equipment is expected
to cost $1.5 million. This cost includes the installation of the equipment and all of the
materials needed to begin our water purification business. Special features of our
equipment include a safety device that protects the pump from running dry when an
insufficient feed of water pressure occurs. Once installed, materials and maintenance will
be the only future costs incurred to keep our equipment operating; which are
economically cheap compared to the sales we are generating from the production our
equipment. Office Plant

AQUAPURE has strategically agreed to a 10-year lease on a 10,000 square foot office in
Roatan, Honduras. Why emphasize the strategic part of acquiring our office? For one, the
current price to build your own office in Roatan is about $70 per square foot. Multiplied
by 10,000, the cost just to build our office would be $700,000. This price does not even
include the purchase of the land where we would build our office. Therefore, it is
economically cheaper and smarter for AQUAPURE to lease our office at a monthly
expense of $2,500. Land will also have a cost of $40,000. Second, like any business,
AQUAPURE plans to expand our business by building our clientele (high-end hotels and

restaurants). As we are expected to provide more of our purified water to our customers,
we will need enough space in our office to install additional equipment; which will
produce more purified water. Our 10,000 square foot office is the perfect size that fully
maximizes the utility of our space. Office Equipment

AQUAPURE will office equipment such as: computers, office desks, office chairs,
laboratory equipment, and filing cabinets. Our equipment has amounts to a total cost of
$15,000. Business Visas

Since AQUAPURE will be based in Roatan, Honduras, it is mandatory for us to acquire

business visas, which has an estimated cost of $1,000 for each member. With seven
members in AQUAPURE, we will have a $7,000 expenditure on our business visas. The
acquisition of business visas has validity for three months (, and if desired, we can apply
for a six-month extension for our stay in Honduras. The application requirements for the
purchase of business visas include two applications, a valid passport, and paperwork
indicating the sufficient funds to cover the duration of stay. Patent

By acquiring a licensed patent for our business, AQUAPURE is guaranteed that no other
company can obtain the legal rights of our business. We accurately estimate the
acquirement of our patent at a cost of $4,300 since the invention is considered to be
highly complex. The patent will have the same estimated useful life as our water
equipment, so we will amortize (have to amortize intangible assets rather than depreciate
them) our patent over its estimated useful life of 15 years. Included in the purchase price
of our patent are search and consultation, professional drawings, attorney fees, and
USPTO fees. Table 7-1 presents the variety of patent prices affiliated with the type of

Table 7-1: Patent Costs

Invention Search & Professional Attorney USPTO Fees Estimate
Consultation Drawings Fees Total
Relatively Simple $500 $200 $1,000 $100 $1,080
Minimally $500 $300 $1,250 $100 $2,050
Moderately $500 $400 $1,500 $100 $3,300
Intermediately $500 $500 $1,750 $100 $3,550
Relatively $500 $700 $2,000 $100 $3,800
Highly Complex $500 $800 $2,500 $100 $4,300

7.1.2 Monthly Expenses

Through devising our financial plan, AQUAPURE has come to the realization to have
enough cash on hand (after our start-up costs) to cover three months’ worth of monthly
expenses, excluding our income tax expense, in the case that we do not generate any
revenue from our water treatment service. We feel the extra cash on hand provides a
sense of security for AQUAPURE and for our investors since it solves any problems
before these problems turn into costly nightmares. The good news is that our combined
monthly expenses are only 29% of our start-up costs, guaranteeing that the extra cash on
hand is not worry for our investors. Salary Expense

AQUAPURE will have three employees strictly for our water treatment service. The
chief plant operator is in charge of the distribution of the plant, which means he is
expected to verify that the piping, lines, and the infrastructure of our plant is running
effectively. The chief plant operator is a qualified T3 employee (capable of running the
plant), and earns a monthly salary of $4,000. Our second employee, the lead mechanic,
works under the chief plant operator and is in charge of maintaining the water purifying
aspects of our business. The lead mechanic also repairs the equipment when required,
which saves AQUAPURE the time and money in hiring another employee strictly for the
maintenance on our equipment. Being a qualified T2 (capable of running the water
treatment equipment), the lead mechanic earns a monthly salary of $3,500.
AQUAPURE’s lab technician earns $3,500 per month and performs daily tests of our
water within the parameters of the plant to make sure our water is in drinking standards
with the island of Roatan. Our lab technician will preferably have a bachelor’s degree in
chemistry. AQUAPURE will also hire a security guard that will patrol the parameters of
our office from 10AM to 6PM. Although there has been a reduction of crime in Honduras
(Honduras Travel Tips, par. 5), AQUAPURE will take all precautions necessary to

guarantee the safety of our business. We will pay our security guard $2,500 per month.
We will have a monthly salary expense of $13,500. Advertising Expense

AQUAPURE intends to promote our service towards the high-end hotels and restaurants
in Roatan, Honduras. Since Roatan is one of the most popular tourist destinations in the
Bay Islands, AQUAPURE feels Roatan is the best location to market our service; giving
us the best opportunity to generate sufficient revenue as a supplier in the water treatment
business . We intend to advertise our service mainly through print media; mainly in the
form of broachers. These broachers are intended for the hotel and restaurant managers,
which will then be provided for the tourists, and will include information about our
company and what sets AQUAPURE apart from our competitors. AQUAPURE will be
able to produce 5,000 colored pamphlets for $880. The pamphlets will only get us so far,
so we need company representatives to close the deal. We will have two of the company
owners’ as company representatives since it is our owners’ that best understand the
possible success that can be achieved in the water treatment business. By having our
company owners’ as company representatives, AQUAPURE can avoid further advertising
expenses. The broachers will also include our home website. Rent Expense

As mentioned earlier, our rent expense on our office will be $2,500 a month. Depreciation Expense

AQUAPURE will use straight-line depreciation to allocate the cost of our tangible assets
to the periods benefited from their useful life. Depreciation expense is computed by
subtracting the salvage value of the asset at year end from the purchase price of the asset,
and then dividing that number by the expected number of the asset’s useful life of. The
purchase price of the equipment, as mentioned earlier, is $1,500,000. The equipment is
not expected to have a salvage value after 15 years of its useful life. Our office equipment
is will cost $15,000, and have a useful life of 10 years. AQUAPURE’s acquirement of our
furniture will be able to serve seven years as a useful life and will cost $10,000. The ten-
year lease on our building allows AQUAPURE to install additional equipment to our
plant as we build our clientele.

Table 7-2: Depreciation Expense

Depreciable Item Cost Useful Life Depreciation Expense

Water Equipment $1,500,000 15 years $100,000/year
Office Equipment $15,000 10 years $1,500/year
Total $1,515,000 $101,500 Income Tax Expense

The value after tax (VAT) system in Roatan is 16%. This means that our net income at
year end multiplied by the 16% will equal our income tax expense for the year. Interest Expense

AQUAPURE will accrue a monthly interest expense of $129,800. This amount comes
from the financial institution loan as well as the private home lender loan. Utilities Expense

Our Utility bill will include gas and electric. AQUAPURE’s utility expenses will increase
each month as we provide more of our purified water. More electricity is required to
purify the water coming from the commercial wells and rain water to our holding tank.
Our electricity will be supplies by the Roatan Electric Cooperative (RECO), which a
subscriber is owned utility (Roatan Vista Villa Utility Systems, par 1). Amortization Expense

We will have a monthly amortization expense of $287 deriving from our patent.
Intangible assets are amortized to match the expense incurred with the benefit received
from their service.

AQUAPURE will need to raise approximately $1,600,000 in capital to begin our water
treatment business. This amount covers our initial start-up costs, as well as three months
worth of our monthly expenses excluding income tax expense. AQUAPURE will resort
to debt and equity issuances to meet our expectations for raising capital. Figure 7-2
presents the resources AQUAPURE will use to raise capital.

Debt Equity Through Financial Institution

Debt Equity Through Private Lenders
Equity From AQUAPURE Owners

Figure 7-2: Percentage of Resources AQUAPURE Will Use to Raise Capital

7.2.1 Principal Equity

Each member of AQUAPURE has agreed to invest $20,000 into our water treatment
business. This will immediately give us $140,000.

7.2.2 Debt Equity

AQUAPURE will take a $1,000,000 loan that matures in ten years with a seven percent
interest rate from a financial institution. We have also agreed on a $460,000 loan with a
13 percent interest rate from a private home lender with a mature for ten years. With
these two loans combined, we will have a monthly interest expense of $129,800.

7.2.3 Common Stock

AQUAPURE will issue 10,000 shares of common stock with a $1.00 par value to our
investors. We will not include this $10,000 in our total amount of capital raised because it
is not a guarantee in collecting all $10,000 from our investors. We will use whatever
amount invested as extra cash on hand to cover any sudden expenses.


Financial statements are used by a business to properly demonstrate their financial
position in accordance with the Generally Accepted Accounting Principles (GAAP). As
the financial analyst, I feel the income statement and the balance sheet provide the best
information for external users of the financial statements.

7.3.1 Income Statement

The income statement measures the success of our business over a given period of time
and will arrive at our net income. Net income is found by deducting a company’s
expenses from their revenue. Revenue

Our inflow of cash from the sale of our service can be calculated by taking 50% of our
customer’s electricity bill. We are more concerned with our customer’s electricity bill
rather than the amount of water they use from our service since a large amount of
electricity is used in the process of transferring the purified water from our holding tank
(also know as the reservoir tank) to our customer’s holding tank. Our customer’s

electricity bill will obviously vary, but the average electricity bill according to Debbie
Wagner (personal communication, March 7, 2007), the average electricity bill for a hotel
and a restaurant is about $20,000 a month. Therefore, AQUAPURE will charge 50% of
$20,000 to calculate monthly revenue earned for each customer. Adding up the revenue
earned from each customer will give us our total revenue at month end. (Components of
the income statement are displayed in financial statements at the end of every month). Expenses

All of AQUAPURE’s operating expenses will be paid at the end of every month. Since
we know our revenue and expenses, AQUAPURE can calculate our estimated net
income. Table 7-3 depicts our company’s projected income for the first three years.

Table 7-3: Projected Income Statement

Dec 31, 2008 Dec 31, 2009 Dec 31, 2010

Gross Profit from Sale $480,000 $600,000 $720,000
of Service
Operating Expenses:
Salaries Expense $162,000 $162,000 $162,000
Rent Expense 30,000 30,000 30,000
Interest Expense 129,800 129,800 129,800
Repair Expense 20,000 25,000 30,000
Depreciation Expense 101,500 101,500 101,500
Amortization Expense 287 287 287
Advertising Expense 880 880 880
Utilities Expense 9,600 12,500 16,000
Total Operating $454,067 $461,967 $470,467
Operating Profit $25,933 $138,033 $249,533
Income Tax Expense $4,149 $22,085 $39,925
Net Income $21,784 $115,948 $209,608

7.3.2 Balance Sheet

The balance sheet demonstrates a “snapshot” of the company’s assets, liabilities, and
stockholders’ equity. Table 7-4 shows AQUAPURE’s balance sheet for the first three

Table 7-4: First three years of AQUAPURE’s balance sheet

Jan 1, 2008 Dec 31, 2008 Dec 31, 2009 Dec 31, 2010
Current Assets:
Cash and Cash Equiv $33,700 $55,484 $171,432 $286,676
Total Current $33,700 $55,484 $171,432 $286,676

Property, Plant, and

Water Equipment $1,500,000 $1,500,000 $1,500,000 $1,500,000
Less: Accumulated 0 (101,500) (203,000) (304,000)
Office Equipment 15,000 15,000 15,000 15,000

Less: Accumulated 0 (1,500) (3,000) (4,500)

Office Plant 40,000 40,000 40,000 40,000
Total Property, $1,555,000 $1,452,000 $1,349,000 $1,246,500
Plant and
Other Non-current
Business Visas $ 7,000 $7,000 $7,000 $7,000

Intangible Assets:
Patent $4,300 $4,300 $4,300 $4,300
Less: Amortization 0 (287) (574) (861)
Total Assets $1,600,000 $1,518,497 $1,531,158 $1,543,615

Long Term Debt $1,460,000 $1,356,713 $1,275,210 $1,194,007
Total Liabilities: $1,460,000 $1,356,713 $1,275,210 $1,194,007

Common Stock $140,000 $140,000 $140,000 $140,000
Net Income 0 21,784 115,948 209,608
Total Liabilities and $1,600,000 $1,518,497 $1,531,158 $1,543,615
Stockholder’s Equity

AQUAPURE has a vision to not only succeed as a provider for purified water, but we
also have a vision to improve the quality and availability of water for the tourists and the
citizens of Honduras asked by the Bay Island Environmental Management Project.
Purified water is essential to maintain one’s health, and because Honduras could use a
dependable business as a means of providing purified water to its tourists and citizens,
AQUAPURE plans to reach great success.



“Honduras is one of the poorest and least developed countries in the Western
Hemisphere” (Encarta “Honduras” D). Honduras is a country that has suffered from
natural disasters, water pollution, and unsanitary health conditions. In recent years
tourism has grown, providing new jobs, boosting the economy, and providing the
customers necessary for our business. Few cultural differences affect our business as our
target market is tourists, however false promises common to their culture may cause
problems. AQUAPURE will provide more jobs, in addition to improving sanitation.
Therefore, the following sections consist of false promises, poverty, environmental
issues, health, and tourism.


A cultural difference that may cause problems for our company is “commitments.” In
English, commitment means commitment, but it has no meaning to Hondurans. For
example, a promise made to come to fix our pipes by 2 PM in Honduras does not really
mean anything. The man may come by a week late, a month late, or never. This will
cause problems for our company because we will need to have repairs done quickly, and
will need reliable work. Even if you confront the person, they will say they had a
commitment, only to someone else. The gist of it is that it is rare for a person to tell the
truth if they are actually going to show up for work. Another cultural difference we must
watch out for is payment in advance. If work is still in progress, and the full payment
has been made, it will take a long time to get the job done. In order to get work finished,
you must constantly be nagging the workers. These false promises may also be a
contributing factor as to why poverty is so high in Honduras.

Honduras has been a country of poverty throughout history and has suffered for it. The
country’s economy is based mostly on agriculture, which fluctuates with world prices;
making the economy highly unstable. Unemployment is high in the country, with over
28 percent of the population unemployed. Our service will help Honduras by providing
new jobs for the unemployed in addition to improving sanitation. A cultural difference
we have with Honduras is that armed guards exist almost everywhere, so we will be in
need of armed guards. It will help protect our service which provides the best quality
water to tourists from clean, well-protected sources. Family is very important in
Honduran culture, and although women are generally submissive to men, due to extreme
poverty, women have also begun to take jobs. Poverty and unemployment means that
workers will be easy to acquire for our business. Table 8.1 compares the unemployment
rate of Honduras to neighboring countries in the Western Hemisphere:

Table 8-1: Unemployment Rates

Country Unemployment
Honduras 27.9
Ecuador 10.6
Panama 8.8
Guatemala 7.5
Costa Rica 6.6
Canada 6.4
El Salvador 6
United States 4.6
Nicaragua 3.8
Mexico 3.2


Throughout Honduras’ history, Honduras has suffered from many environmental issues
which range from water pollution to natural disasters.

8.3.1 Water Pollution

Honduras has long suffered from water pollution, making it hard for citizens and tourists
to come across clean water. Heavy metals from mining activities pollute Lake Yojoa,
making the largest source of fresh water contaminated. This makes it hard for residents,
especially of rural areas to have access to clean drinking water. Our service will
therefore take care of the contaminated water by providing fresh water to citizens and
tourists in the area. Clean water is a necessity to restaurants, hotels, and other businesses
in order for them to thrive in every culture, so our business should also thrive.

Figure 8-1 shows Lake Yojoa, Honduras’ major source of fresh water, which is
undrinkable due to pollution.

Figure 8-1: Lake Yojoa (Encarta “Honduras” )

8.3.2 Hurricane Mitch

Honduras was the country hardest hit by Hurricane Mitch in 1998. During this hurricane
the eastern coast was struck, killing over 5,000 people and causing damage to crops,
roads, towns, and villages. This natural disaster is said to have set back economic
development in Honduras by decades. AQUAPURE will be a great asset to Honduras by
providing a new source of fresh, sanitary water. Simple companies such as AQUAPURE
are necessary to Honduras, as their homes and lives have been so negatively impacted by
natural disasters. Fresh water is a necessity to any culture, used for bathing, drinking,
cooking, and so on. Figure 8-2 displays the aftermath of Hurricane Mitch in Honduras.

Figure 8-2: Hurricane Mitch (Encarta “Honduras” G)

Recently in Honduras more public health services have been made available through an
increase in mobile health units and the development of community participation in health
programs. Effective programs have helped control malaria and improved sewerage.
AQUAPURE will be another of these services which will help improve public health as it
will clean the infested water that people are drinking, leading to less diseases and
improved health in this poverty stricken country. It will improve the quality of life in
Honduras and be a great asset to their culture.

Tourism has grown in Honduras in recent years as a solution to poverty. It provides the
country with much-needed income in addition to providing jobs for many, as over 28
percent of the country is unemployed. Most of the tourists come from the United States,
in addition to visitors from elsewhere in Central America. People come to see the
ancient Mayan ruins at Copan in addition to gorgeous beaches that offer scuba diving and
snorkeling. Tourism relates to our service because tourists who come to enjoy the
beautiful country need clean water. It is a burden to have to go in search of clean water,
or avoid drinking water at all to refrain from becoming sick. AQUAPURE will bring
clean water to Honduras in hotels, restaurants, and other businesses near Roatan, where
tourism is huge. Travelers will be willing to spend extra money for sanitary living
conditions that come with clean, running water. As our business will be aimed towards
these tourists, many cultural differences we may have with Honduras simply do not affect
our business, such as language. Although Spanish is the national language, our service is
providing water, and this difference is not of too much importance. However we will
warn our staff that another cultural difference is that pointing with the chin is as rude as
pointing with a finger is to us. Although this is not a huge concern facing out service, it
is helpful fact for our employees and tourists to know. Figure 8-3 displays a resort in
Roatan, which potentially will use AQUAPURE’s service.

Figure 8-3: Resorts in Roatan (Travel to Roatan, Para. 5).

Honduras is a country of poverty, suffering from natural disasters to water pollution,
resulting in poor sanitary conditions. We will hire security guards to protect our service
and will hopefully hire loyal, consistent workers who will show up everyday. This may
be difficult to as it is common for an employee to promise to come to work at 8 AM, but
then may or may not show up. A promise means nothing, which will hurt our business if
we hire these types of workers. Tourism in recent years “will not only benefit the country
by creating new jobs and bringing in foreign currency, but also by strengthening our
national identity, increasing development, and giving Hondurans a higher standard of
living” (Honduras Tourism, Para. 1). AQUAPURE will provide jobs, improve sanitation,
strengthen the poverty stricken country as a whole, and will thrive in Honduras.




Starting a business requires a thorough planning in order to be successful. The following

paragraphs outline our implementation schedule and a detailed description of it.


To make sure we can start our business as planned, we will follow a precise schedule.
The Gantt chart in Table 9-1 below shows start and stop dates of each task that needs to
be completed.

March April May June July August September October

Obtain Licenses

Obtain Land

Order Equipment

Receive Equipment

Install Equipment


Hire Employees


Begin Operations

Table 9-1 Schedule of Implementation

After reading our implementation schedule it should be clear that we will be able to stay
on schedule. We are confident and look forward to move ahead with our plans.



AQUAPURE and its Board of Directors are confident that AQUAPURE has the potential
to succeed as a unique service in Roatan, Honduras. This business plan provided the
Service Analysis, Market Analysis, Marketing Plan, Management Plan, Financial
Analysis, Cross-cultural Analysis, and Implementation Plan of our business and
illustrated the benefits of an investment in our company throughout each of these

As we know the main concerns our investors may have are in terms of money, table 10-1
provides one more time the key numbers of AQUAPURE that speak for themselves.

Table 10-1: Key Numbers for Potential Investors

First Year Second Year Third Year

Revenue 480,000 600,000 720,000

Operating Expenses 454,067 461,967 470,467
Net Income 21,784 115,948 209,608

Looking at these numbers, it is obvious that as time progresses, AQUAPURE’s revenue

will increase rapidly, while our operating expenses are only slightly increasing.
Therefore, our net income will increase by 532 percent after the first year and by 181
percent in between the second and the third year.

In addition to that, the Honduran culture presents many advantages to us, we will
implement a variety of effective marketing strategies, we identified all the cultural
differences we need to be aware of, and we have an efficient management structure
already outlined. We also hope potential donors will keep in mind the uniqueness of our
service and the humanitarian aspect we could include.

In conclusion, we believe that Honduras has more to offer than five-star hotels within
“(...) a true unspoiled tropical paradise” (“Hotel Cabana Roatana”, n.d., intro section,
para.1) and we believe that our service can make a contribution to develop Honduras into
what it really is: A true five-star country.

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