How to Start a Furniture Store

Part 1 - How to start a Furniture Store business - Background

Your furniture store may focus on less expensive pieces created by massive factories or cater to an wealthier customer seeking unique designs built specifically for their home or business. Some stores include lighting fixtures, electronics, appliances, and outdoor furniture, and they may offer design services.

Our guide is in 3 parts:

• Part 1 - How to start a Furniture Store business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a furniture store?

Your largest costs for opening a start-up furniture store will be invested in the store front and your display inventory. In order to create the most attractive displays, you need at least 50,000 square feet. You may need a large warehouse in order to deliver furniture in a timely manner to your customers. Your store should be centrally located in order to provide the most convenient service to as many people as possible. Design consultants will garner the highest salaries. Expect to invest between $1 million and $20 million depending on the size and complexity of your furniture store showroom and warehouse.

What are the ongoing expenses for a furniture store?

Payroll will be a significant part of daily expenses for your sales, design, and delivery crews. You will change out your displays twice a year, and that will be a major line item on your annual budget, but some of those pieces can be sold as-is at a later date. You will need to keep some inventory in your warehouse, but most items ship straight from the factory to your customers’ homes.

Who is the target market?

Some clients change out their furniture as home fashion changes, ordering a new sofa every few years.Your return clients will generate the most income. At the same time, everybody needs to buy beds, so creating a welcoming environment that appeals to most people is crucial. Colleges and property maintenance companies will purchase large quantities of inexpensive furniture on a regular basis.

How does a furniture store make money?

You will generate income by selling a large quantity of furniture to as many people as possible. You buy the furniture from factories at wholesale prices and sell at a higher price, netting a profit.

How much can you charge customers?

Bargain furniture can be priced starting at $50 for an end table. Custom orders of silk upholstered sofas and mahogany dining sets climb up to $10,000. Mid-line pieces tend to average between $1,000 and $2,000.

How much profit can a furniture store make?

While your furniture store can bring in well over $1 million in annual sales, the furniture industry boasts one of the smallest profit margins in the retail industry. Your profit over wholesale will be about 40%. However, most stores anticipate a 2% net profit after operating expenses and payroll is covered. As the business owner, you may enjoy an annual income of between $150,000 and $300,000.

How can you make your business more profitable?

Pre-fabbed furniture is becoming more popular with Americans. The bookcases, tables, and even pull-out sofas are delivered in a flat-pack box and the customer assembles it themselves. The profit margin on pre-fabbed furniture is much higher and costs considerably less to deliver to a customer, increasing your take home pay.

Day-to-Day and Growth

What happens during a typical day at a furniture store?

If you operate a furniture store, on any given day you might be expected to:

• Ensure all the furniture displays are spotlessly clean and attractive

• Work with customers to find the right piece of furniture that matches their style and budget

• Review new collections of furniture and decide which ones your store will sell during the next season

• Place orders with furniture factories to meet customer orders or to have “in-stock” for immediate delivery

• Provide a welcoming environment for your shoppers which may include snacks, coffee, or extra entertainment

• Design new displays for incoming furniture collections

• Offer in-home consultations for customers seeking to develop a unified design

• Schedule furniture deliveries for customers

What are some skills and experiences that will help you build a successful furniture store?

The successful furniture store business owner will be able to:

• Select and display popular and beautiful pieces of furniture

• Provide a welcoming and exceptional shopping environment

• Deliver excellent customer service on every single sale

• Train a friendly and knowledgeable sales staff ready to support the shopping experience

• Maintain a good profit margin through use of good business skills

• Establish positive relationships with a variety of furniture manufacturers

• Suggest attractive combinations of furniture, carpeting, lighting, and other design elements for a more personalized experience

What is the growth potential for a furniture store?

The most successful furniture stores don’t have unique furniture to sell, but create a shopping experience and atmosphere that encourages their shoppers to linger, test, and discover their favorite item among many options. When you build that unforgettable service experience combined with reasonable prices, it is possible to expand your furniture store into a chain.

What are some insider tips for jump starting a furniture store?

Becoming a popular furniture store relies heavily on your ability to promote its opening as a massive party that happens to feature some great bargains. Make sure to have accounts set up with all your furniture makers such that orders placed will be filled quickly or at least as promised. You will need to do a media blitz using every available outlet to promote your new business. Your opening weeks should include extra sales staff such that no customer walks away without some personalized attention.

How and when to build a team

You will need to start working on building a team as soon as your business plan is accepted by the bank. Your display design team must submit their plans before the building goes up while your marketing team will start promoting your business a good 8-weeks before the doors open. Your sales team will be working with furniture makers six-months ahead of the first orders placed. Your floor sales team will come on board two weeks ahead and delivery can be hired at the last minute.

Part 2 - Is a Furniture Store business the right fit for you?

Part 3 - Action plan to launch your Furniture Store business in 90 days