How to Open a Furniture Store — Ultimate guide
Craft Your Business Plan
If you have an eye for attractive home furnishing pieces and a sound mind for business, then you are in the right place. In the United States alone, the home furnishing niche rakes in around $10 billion per month, and globally, the market is valued at close to $500 billion. However, just because you can match colors and styles doesn’t mean your business will be successful. You need to have an organized plan, a knowledge of the costs involved, and a prime location to open your doors.
It is never recommended that you go into any business without first conducting some research and putting pen to paper. Any successful business must start with a business plan, and within that plan, you’ll outline what is known as a SWOT analysis. A SWOT analysis is inclusive of four factors and will help you take a good look at the business you’re about to open. They are:
- Strengths. What can you offer that you feel no one else can? Or, asked a different way, what do you think you do really well in this field? The answers to those questions will help you figure out how to position yourself properly so that you attract as many customers to your store as possible.
- Weaknesses. Where can you make improvements within your business model? Are there any resources you don’t have? Once you answer these, you can fill in those gaps to ensure a more successful entrepreneurial experience.
- Opportunities. What are they? What are the interior design trends or the fads that you can capitalize upon? How can you take your research of the market and turn them into strengths that you implement within your company? In this section, think also about the location of your furniture store. Are you opening your doors in an area that is saturated with other options? Is your building easy to find and to access? The answers to those questions will determine the difference between someone that is an opportunity and something that is an obstacle.
- Threats. Are there threats present, especially in the form of competition? What are experts saying about the growth of your particular industry in the next ten years? Again, answer those questions to safeguard yourself against any business failures.
There is no doubt that you will be competing with big name home furnishing stores, boutique shops, and chains, but identifying all of the four factors above will make you less susceptible to hiccups and unexpected issues on your business journey.
Figure Out Your Style
It is important to follow the trends in the home furnishing world, as these can be ever changing. Have you ever walked into someone’s home and immediately realized that their decor was outdated, or that it belonged to a bygone era? That is what you want to avoid.
A quick search on the Internet will yield you results about the popular design trends of the year and/or of the decade. Some notable trends include:
- Sustainable furniture made from materials that have been recycled or repurposed
- Build-your-own furniture that can be assembled and disassembled relatively quickly
- French-inspired furniture
- Mid-century modern furniture
- Minimalist furniture
What you offer to your customers will also heavily depend on the area in which you are selling. If you are located in a more upscale and “chic” city, then you can expect the latest trends to be the most desirable. It is important to research not only what is popular, but what is most requested within your specific area.
Register Your Business Entity
Once you have listed all of your costs, you will have to decide how you want to register your business. There are a variety of classifications when it comes to this process, known as business entities. These business entities include:
- Sole proprietorship
- Limited Liability Company, or LLC
First, you should choose a name for your store that you will register as your official business name. Be sure to check with your state and the federal registry to make yourself aware of other business names so as not to either duplicate or have a name that sounds too similar to another store.
Second, decide what kind of an entity you’d like to register as. Recall that an LLC, or a Limited Liability Company, is an entity which protects you as the individual. Should your store be sued, your personal assets would be protected.
Third, register for all of the necessary taxes. You can do this easily by first applying for an EIN, or an Employer Identification Number through the IRS website. Then, be sure to register for the required state and federal taxes.
Finally, be sure to secure all of the necessary permits, licences, and other paperwork associated with opening your furniture store. Your best bet is to check with a business attorney and to determine the legal documents you will need according to your location (state, federal, etc.)
Get Your Finances in Order
Yes, part of your business model will include a section about finances, but this is a big one, so it gets its own step. Everyone knows that financially, the most difficult year in a business’s life is the first. That is because of the start-up capital required to get your business off the ground.
When getting your finances in order, you are going to want to ponder a few things. The first set of calculations you might want to make is what you can afford in rent. The more furniture you plan to sell, the bigger the space you will need, which will in turn mean a higher per-month rent. If you want to go for a more antique or boutique feel, you might not need as much space. The location of your store will also determine your rent, as you will find that prices in a bustling city will be higher than those in a suburban or a more rural area.
The second set of calculations you’ll want to make involve the one-time payments and the recurring payments. Of course, there will be more one-time payments related to opening your business, and then eventually, you will have recurring payments (such as rent or a mortgage, employee salaries, taxes, and more). Some costs you will need to consider:
- Equipment costs. Think of how you will store some items, and/or if you will need delivery trucks to get your furniture to your clients. If the answer is yes, you will have to factor in the number of trucks needed.
- Point of Sale system. A reliable one will cost you a few thousand.
- Inventory. A bigger store’s inventory costs can put you above $100,000. Again, this depends on quantity and variety of items.
- Rent and insurance. This goes without saying, but is necessary to factor in.
- Employee costs. Depending on how many employees you have, this number will change.
When done right, and if you keep yourself organized, you will eventually see a return on your investment. Do some research into which banks can give you a small business loan with the best rates. You should also consider applying for a business credit card and a business bank account. It is important to keep your personal account and your business account separate.
Hire your Team
One of the biggest mistakes a business owner can make is putting his/her trust in the wrong people. For this reason, it is crucial that you build the best team you can for your furniture store. Since some of these employees will be on the floor making the sales, it is important that they not only have a knowledge of design and furniture, but that they are also charismatic and have a warm way with people.
The size of your team will be dependent upon how big your store is and how much inventory you have. It is always recommended that you hold interviews to select the best candidates for the positions you will need to fill. Your employees will more than likely fall into the following categories:
- Bookkeeper / Secretary
- Delivery drivers
Of course, some employees might not mind holding more than one title. But be prepared to look for a combination of both: employees who will work in one category, and employees who will do more than one. You will be the fallback on everything, since it is your business. When it comes to instructors, however, go for those who have a high level of expertise. The experience your clients get when they walk through your doors is crucial, so you must build your staff with the most knowledgeable individuals you can.
You’ve done the research, established your business entity, found your location, and built your team. The last step before cutting that ribbon is to market yourself. How are you going to let people know that you’re opening your doors? If you don’t mind word of mouth and going around on foot, a great way to advertise yourself is to hand out flyers throughout the community to let people know that you’re open for business.
You might also consider taking out an ad in the local newspaper or working with one of the restaurants in the area to see if they will let you advertise there (think of those diner menus that feature local businesses).
Social media can also be a vital tool in getting the word out about your business. Platforms such as Facebook and Instagram allow you to create a business profile where you can highlight pieces of furniture or provide design ideas to potential customers.
Finally, consider investing a bit of time and money into a website. Your website should allow people to do the following:
- See your inventory and pricing
- Make a purchase online
- Contact you
Many people want to compare prices or look at elements such as color and design before they actually commit to a purchase, so having a well-organized and easy to navigate website will make the process better for everyone involved.