The February 2019 Industry Market Research Report put out by IBIS World states that office furniture customization will provide room to grow amid import competition. In short, people like customized furniture.
If you enjoy making furniture or just dealing with furniture, you may have already been dreaming of owning your own furniture business for a while.
Read on to learn 9 key tips for starting a furniture business.
1. Determine Your Niche
So you love the furniture business or just the idea of furniture. What kind of furniture? To build your business, you first need to decide what part of the furniture business you will dabble in.
What is your niche?
Consider where you will see your furniture. Do you want it in a home? Do you picture it in an office? Perhaps you can see it in a waiting room?
You must determine your niche before you consider starting your furniture business.
You need to also determine the material from which you will make your furniture. Will you have metal furniture? Wood? Furniture with upholstery?
Perhaps you’ll have furniture with a combination of materials rather than just one. Think about the vibe you’d like your furniture to give as you think about where you want to see it.
You should also consider where you will sell your furniture. Will you see it locally to the businesses down the street? Or will you sell it internationally and have to make shipping arrangements?
2. Conduct A Market Analysis
Once you determine your niche, you can conduct a market analysis. This means you need to examine your competitors carefully.
Where does your competition lie? Do you have a competitor in your own community? And if so, what will make your business successful in this market?
Look specifically for what your competitor is not offering, and ask yourself if you can offer this for customers. Conducting market analysis will help you determine appropriate pricing for your product as well.
3. Determine Your Source: Virtual or Brick and Mortar
Ultimately, we all work from a brick and mortar building (unless you’re conducting business in a tent). However, you need to determine early on if you plan on having a concrete storefront or a virtual storefront or both.
If you plan on running an online business alone, you will need a campaign to make your business known. Use social media carefully and effectively.
If you’re not a Facebook junkie, then consider the cost of a social media marketing company to help you make your furniture company’s name and brand clear.
If you plan on having a virtual storefront, determine if you’ll need storage. It may work well to begin your business in the garage of your house, but as it grows, you will want more space. Begin to scope out warehouse space or the cost of building your own storage area.
4. Determine Your Location Carefully
If you plan on having an actual storefront with your fancy name on the top, consider your location and the market surrounding it. Do some on-the-ground research. Walk around the neighborhood.
Remember to not just consider the cheapest rent. What will be the best location for your business? Where do you see the most traffic that would stop at your store?
Pay close attention to the traffic patterns in your potential store’s neighborhood. Also, consider where your customers will park and if there is adequate parking.
If you’ll ever need to expand, you should also look into the zoning laws in that neighborhood.
If you’re civically minded, you can also consider how your business would contribute positively to the neighborhood. How could your business be a good neighborhood to the stores around it?
5. Create a Legal Structure
If you want your business to thrive and be protected, consider the legal structure you want for your business. Consult a CPA or an attorney or another business advisor for what legal structure makes the most sense for your business.
You basically have three options: a corporation, a partnership, or sole proprietorship. Each structure has its benefits and detractors. Research these with a business advisor to learn which works best for you.
Then register with the Secretary of State. If you want a legal business, you need to do the paperwork. This means you also should obtain a federal tax identification number from the IRS and learn if you need a state tax id number.
Every state is different, so determine right away if you need a state tax id number.
6. Ask If You Need a License or Permit
States vary on their requirements. Call your state’s office of economic development or visit their website to determine if you need a business license.
Even trash collectors need a license in some states. So do all your groundwork early on so you do not find yourself in trouble once you officially open your business.
7. Write a Business Plan
Your business plan is a multi-part document that explains your plan to anyone interested in your company. This force you to lay out the important elements of the company. If you ever need a small business loan, you will need this plan. It consists of the following elements:
- Your company’s description
- An explanation of your target customer
- An explanation of the market analysis of your business
- A definition of your business structure
- A description of your product line
- The marketing strategy that will lead your business to success
- Your financial projections for the next five years
These items in one neat document will work well as a concise business plan.
8. Consider Guarantees and Warranties When Starting a Furniture Business
You’re selling a product that people either will rest themselves or their valuables on (chairs and tables), and unless you have a loyal customer base from the start, you have no reputation behind this product.
Thus you need to have a guarantee behind your product to make it more attractive and viable to a customer or you need a warranty that will tell your customer you’re behind your work.
Make sure your insurance carries product liability This will help protect you should something go wrong with your furniture.
9. Remember You’re Running a Business
You most likely already love your product. You understand the difference between vintage oak furniture and elegant Eero Saarinen furniture.
So as you go into business, remember, you’re running a business. If your business does not make a profit, then you’re just dabbling in a hobby. You will have to make hard decisions, and you will have to do things you don’t enjoy (like filing paperwork).
But to own your dream business of selling furniture, remember, you’re running a business.
Not everyone dreams of starting a furniture business. But if you do, then stay focused on the tasks at hand. Consider the nine steps, and focus on the end product of owning your own furniture business.
For more interesting articles on running a business, check out some of the other sections of our blog.