How To Start a Borewell Business?
Borewell business is a flourishing business in India that is used in the primary sector of our economy. It is used for drilling in the earth to reach and extract water from the groundwater level, ranging from 150-300 ft or more. Traditionally, the drilling was done by manual laborers who would drill the earth using a special rod, which would take a lot of time. But with the technology, we now have drilling rigs that can do the whole process in less time. As per the records, every year, more than 500- 1000 rigs are added to this industry, whose demand is growing at a steady rate. The majority of the borewells are drilled in Rajasthan, Orissa, Maharashtra, Karnataka, and Madhya Pradesh for the agricultural sector. In this blog, you’ll learn how to start a borewell business that is one of the best business ideas in India.
Cost for starting a borewell business:
Approximate Cost: INR 1 crore + per rig + INR 1 crore more for other equipment
The initial cost of starting a borewell company is large compared to many other businesses, as you need to buy a whole specialized rig for the drilling work. The rig is the machine fitted on a truck that helps carry it to different places. According to a business insider, every rig, including the trucks, costs around INR 1 crore or more. The prices are increasing every year due to the huge demand for drilling borewells for agriculture and business purposes.
The thing to note here is that the average life is around 10 years, with maintenance from time to time. If working on average capacity, any rig can take out the invested amount in 3-4 years, after which it generates profit. The capacity of a rig can be determined with this information. On average, in Maharashtra, you can drill to 150-200 ft to find the water level, and with this approximation, a rig can drill up to 500 borewells in a year.
How to start a borewell business?
1. Check feasibility studies
The agriculture sector is a low-paying sector where you gain significantly only by bulking up the volume. It goes the same for the borewell business as your major customers; more than 75% will be from this sector. The borewell business is not suitable to start at any place rather; it should be located in the part of the country that demands that. You can either opt for the south Indian states of Rajasthan in north India. Borewell's business is a unique business idea that cannot thrive in the urbanized and industrialized city area. Feasibility reports are made for the same as they help you determine the market size, your target customers and industry in that area, and the location of the business.
2. Acquire technical skills
Another problem when operating with such huge and complex machines is that they need special technical skills for operation. For example, when a harvester machine is damaged or stops working, their specialized mechanic charges anywhere starting from 20k for fixing it. Hence you can understand that the rigs are specially designed for drilling and will need technical people to fix them when it stops. Either you can get that technical education yourself or hire a set of people, especially for it.
3. Write the business plan
when you have figured out the above two points, it’s time to start with the actual planning of your business. The business plan will include the list of our assets, liabilities, location, number and type of rigs, and other financial management tips. You can use OKCredit for financial management services. The business plan will require you to take the help of a specialist from the field who can recommend the equipment and budgeting options.
4. Register your business
When your business plan is finalized, it’s time to register the new business ideas with all the legal licenses. Choose a good location to operate from as location is a major indicator in this business for profitability. Also, get your GST registration done, obtain the taxpayer IDs, and open a corporate account for the business. It is one of the small-scale business ideas that you can operate profitably in the coming years.
5. Obtain the machines
This section will spend most of your money as you will need to buy the fixed capital here. The machines and tools will depend on what type of borewell service you want to provide. Normally the starting equipment is in fewer numbers and is given below.
Down Hole Drilling Rig or Boremaster 120 Hydraulic Down Hole Drilling Rig
Drag But Stock, Drill Rods
Drilling Rig CounterWeight
Diesel Engine with Hydraulic Power Pack
Safety Helmet, Safety Boots, Overall, and Hand Gloves
6. Hire the employees
Manage and segregate the various sections in your business and hire people. You need to spend a good amount of money on the technical people operating and maintaining these rigs. Apart from these, you can check with the security person, financial team, and any small marketing team. For financial management, you can use software like OKCredit.
7. Contract source
You can get drilling contracts from many sources. Approach construction companies, which will be your major corporate clients, and check for government tenders that keep circulating from time to time.
Conclusion
Borewell business may be one of your new business ideas or small business ideas, both of which will be profitable in the coming times. With construction and agriculture going hand-in-hand, you can have a good demand for borewells and drillings in the coming times. To start with a borewell business, you need to figure out the technical skills to operate the machines and buy good rigs at a feasible price. The starting capital is very high in the borewell business, so you can pool money and then start a business to make money for the next 10 years
