How to Start a Furniture Business: Everything You Need to Know
Figuring out how to start a furniture business is much like starting any other type of enterprise.4 min read
Figuring out how to start a furniture business is much like starting any other type of enterprise. Before you get to things like choosing a location, creating a business plan, and obtaining licenses and permits, you'll need to think about your motivation for starting a business, write a mission statement, and consider what a fair price point for your furniture might be and whether that's viable for your income needs. These points are highlighted in more detail below.
Starting Your Own Furniture Business
A formal design education or years of carpentry experience are fine, but you'll need to understand what customers want and how to tailor your craft to meet those needs. This is the foundation of starting a custom furniture business. Follow these tips to avoid some easy-to-make mistakes and run a profitable business:
- Budget and starting capital. Determining how much money you'll need to open your doors is challenging. For a new entrepreneur, focus on needs, not wants. You might want to open a trendy designer spot in a popular district, but that could cost millions to get started. Alternatively, you could start an online shop and work with customers directly for less than $5,000.
- Don't commit until you know what customers like. Even if you carefully research demographics in the neighborhood and think you understand customer tastes, you may be surprised by what pieces are in demand and what goes out of stock. Try to offer a variety of items and services, and don't put all your eggs in one design basket until you have some real-world experience with what your customers want.
- Account for daily business tasks. Marking and discounting furniture prices, updating your inventory, managing a warehouse space, and handling customer service and sales are parts of running a business that will pull you away from actual design work. If you're committed to a physical storefront, you may have to hire some help with these things.
- Think of your market. If you run an online shop — either exclusively or in addition to a physical store space — you could sell pieces internationally. Promoting products overseas will be totally different from your domestic operations, and you'll also have to consider shipping, customs costs, and other red tape.
Writing a Mission Statement for Your Furniture Business
Writing a mission statement will help you set yourself apart from competitors, define your initial vision and stick to it moving forward, and determine the best way to invest in your passion for custom furniture. To develop a strong mission statement and vision for your brand, ask these questions:
- Why do you want to open a furniture business?
- Do you want to make a short- or long-term commitment to this industry?
- What's your unique value to an already saturated marketplace?
In addition to these questions, decide how you want to sell. Designers can open a shop to sell directly to consumers, produce affordable and quality furniture for businesses in the hospitality industry, or design custom pieces to be sold through someone else's brick-and-mortar store.
You'll find competitors no matter which you choose. One of the surest ways to be happy running a furniture business is to focus on your passion for design and set up your shop so that it complements your personal drive. Your mission statement should reflect that vision and what makes your craft unique for customers.
Setting a Fair Price for Your Goods and Services
Setting a fair price point is a next important step. This incorporates not only your style and materials used but also the value of the type of product you're designing and its manufacturing quality. Calculating the value of your products will inform your business model, how you advertise, your mission statement, and every other aspect of your operations moving forward.
Picking the perfect price point is critical to your business success. Setting a price too high means you'll be keeping low inventory and selling to a small segment. Selling too low means you're competing with all other cost-effective companies, including overseas manufacturers who may be able to drive prices even lower than yours.
It's better to charge a fair rate based on your unique value to consumers. To narrow down what a good price point is for you, consider the following:
- The type of furniture you sell and what you offer that customer can't find elsewhere.
- Who you sell to. You might want to sell directly to customers, but another option is to sell your custom pieces through someone else's storefront. This would allow you to focus on your designs and on building business-to-business relationships.
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