How to Start a Furniture Store

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Quick Reference

Furniture stores help consumers to express their individual style within their homes. These stores can be unique, follow different themes, and offer a curated selection of products to different audiences. If you have an eye for design, enjoy keeping up with the latest home decor trends, and want to build a business of your own, starting a furniture store might be an ideal option.

Business Overview

Furniture stores sell new and/or used furniture, including beds, tables, dressers, couches, and more. Some stores specialize in particular types of furniture, such as high-end designer models or modular furniture. Depending on the type of furniture a store offers, its audience can vary. Most of the time, customers will be homeowners or renters, though college students can be a secondary audience.

Currently, furniture stores face competition from online furniture stores and big-box chains that can offer discounted prices because of their higher volume purchases. However, furniture stores also offer the convenience of providing fully assembled pieces that can often be delivered to a customer’s home.

Industry Summary

The furniture store industry has undergone recent growth and is spurred by increased consumer spending. From 2013 to 2018, the industry grew by 2.9%, resulting in $65 billion in revenue during 2018, according to research from IBIS World. During that time the number of furniture stores grew to 38,647, employing 227,728 staff. While no one company dominates the market, Inter IKEA Systems BV and Ashley Furniture Industries, Inc. hold the largest shares of the furniture market.

Related Industries

Furniture Repair

Industry Trends

Independent furniture stores face competition from warehouses and supercenters (IBIS World). These major retailers have significant store space and are able to offer diverse selections of furniture, including tables, chairs, and more. Because these retailers can purchase in such a high volume, they can offer customers greater discounts than independent retailers can provide. This may prove a threat to the furniture industry.

Furniture purchases are closely linked to disposable income, but in 2019 disposable income is predicted to increase, driving furniture sales (IBIS World). A thriving housing market also contributes to furniture sales as new homeowners tend to spend heavily to furnish their new homes.

Who is the target market for your furniture store?

A furniture store’s target market will vary depending on the store’s location, the demographic the store markets to, and the type of furniture that the store stocks. A store in a lower-income area that stocks affordable, practical furniture can appeal to the general population, but homeowners, renters, and college students, in particular. Alternatively, a store in a higher-end area that stocks designer furniture will appeal to a different market, mainly adult homeowners.

Skills, experience, and education useful in running a furniture store

Anyone can start a furniture store – even with no small business experience – but the following skills and experience can make it easier to get a store up and running successfully.

An eye for design. Being able to spot quality furniture that will be in-demand can help an owner fill a store with products that will draw in customers and sell quickly. Design skills are also necessary for creating attractive window and in-store displays. Pairing furniture together in sets and accessorizing with accents can help draw customers’ attention to furniture and even drive sales.

Customer service skills. Expect to engage with customers daily. Previous customer service experience is beneficial when owning a furniture store, especially since many purchases are expensive. Customers can quickly get upset if a product or delivery doesn’t turn out as planned.

Given the intense pricing competition from warehouse clubs and larger competitors, an emphasis on customer service is critical.

Management skills. Hiring, training and managing employees takes talent, and it’s a necessary and daily part of owning a furniture store. Previous experience as a manager is valuable in the furniture industry.

Marketing skills. A strong marketing plan is essential to launching a furniture store, but ongoing marketing efforts are important, too. Putting items on sale helps to drive the purchase of some higher-cost pieces, but you need to publicize the sale to get people in the door. Familiarity with email marketing, social media, and even print marketing will be important and can save you money over hiring a marketing professional.

Business skills. Furniture store owners don’t need a full business degree to start and manage their stores, but business skills are important. An owner of a furniture store should manage inventory, identify appropriate pricing, market the business, and more. While previous business experience will help, owners can also learn many of these skills through business classes and a business mentor’s help.

Financial Overview

Furniture stores stock large amounts of fairly expensive inventory, so they require a significant investment in order to get them started.

The cost to start a furniture store will largely be based on the size of the store and the expense of inventory. A smaller operation could get started for around $200,000, while a larger, high-end furniture showroom could see startup costs reach $5 million and more.

The majority of costs come from:

  • Purchase of a location unless leasing
  • Renovations to the facility
  • Inventory
  • Delivery vehicles
  • Working capital to fund the first three to six months of salary, rent, internet, insurance, etc.

Working Capital

Furniture stores require significant working capital to operate. A business needs working capital to purchase inventory, which can be a major cost in furniture stores. If inventory doesn’t move quickly, working capital can be tied up in those products, making it difficult to restock in-demand pieces.

How much can you potentially make owning a furniture store?

According to Chron, furniture store sales and profits vary, but retail furniture stores experienced a 45% gross profit margin in 2018. This profit margin doesn’t include expenses like a lease, employee salaries, or other items noted above. Furniture stores averaged $185 in sales per square foot of floor space. More efficient stores achieved $210 in sales per square foot, while the top stores reached $371 in sales per square foot.

Sales and profits will vary according to many factors, including a store’s age, location, the type of furniture sold, and the presence of nearby competition.

Steps to Starting a Furniture Store

Step 1: Write your Business Plan

After coming up with a business idea, the next step in starting any business should be to write a business plan. Not only will a bank or investor require you to have one in order to get funding, but multiple studies have shown that a business plan helps increase the odds of starting a successful business. A well thought out furniture store business plan will serve the entrepreneur as the road map for their business, helping them achieve their business goals.

Related: How to write a business plan
Free sample business plans

Step 2: Form a Business Entity

A business entity refers to how a business is legally organized. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

Related: Comparison of Business Entities

Step 3: Name the Business

Finding the perfect name for a business can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.

Related: Tips and ideas for naming a furniture store

Step 4: Select your Location

It’s generally beneficial for a furniture store’s physical location to be in close proximity to higher-traffic locations and close to homeowners.

The lease costs of a storefront are often higher than typical independent retail businesses simply because of the square footage that a furniture store requires. Additional factors can affect the cost of a lease, including the location of the store. Store space in sought-after active retail spaces will cost more, but it can also increase foot traffic to the business.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

No special licensing is required to open a furniture store, but some general local, state and federal registrations will usually include a sales tax permitEmployer Identification Number, and Occupancy Permit.

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a furniture store is another. Fortunately, the cost to start a furniture store can be quite high, given the cost to remodel a retail building, delivery vehicles, and inventory. Funding for a new start-up can be difficult as banks are typically going to want the borrower to have good credit and personally invest 15-25% in the project’s total cost.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the business’s income and expenses.

Step 8: Get your Marketing Ready

Marketing costs will vary according to the type and volume of marketing. Expect to invest significantly in marketing the furniture store’s grand opening. Afterward, ongoing marketing can help to publicize sales, spread the news about special events, and show off new inventory to draw new customers to the store. Marketing options include social media platforms like Facebook, Instagram, and Pinterest, print advertising, radio and TV advertising, targeted online ads, direct mail, and more. The prices of each type of marketing vary.

Many existing furniture stores still rely on traditional print marketing, which presents a new business opportunity. Developing a functional online store is critical as customers expect a business to have an online presence.

Related: Low-cost ideas to market a new business

Step 9: Obtain Business Insurance

A furniture store needs to be covered by a few different types of insurance to protect the business against some of the most common risks:

  • General liability insurance helps to protect the business if a customer is ever injured while in the store. It can cover expenses like medical bills or legal fees if they occur.
  • Commercial property insurance protects the business from losses in inventory or the store’s building cost in case of a fire, storm, or other events.
  • Workers comp insurance is mandatory for any furniture store that employs staff. If an employee is ever injured while on the job, this insurance can cover related expenses, such as medical bills.
  • Vehicle insurance is necessary to protect a furniture business if a worker gets into an accident while driving the business’s delivery vehicle.

The cost of a store’s insurance policies will vary according to the value of the inventory, the number of staff employed, the store’s location, and other factors. Desired coverage limits and deductibles also affect policy costs. To get a better idea of what insurance may cost, request quotes from several companies and closely compare the policies to decide which plan is right for your needs.

Step 10: Hire Employees

You may start out as the only person working in your furniture store; however, it’s important at some point to bring on employees as retail hours are typically long, and you will need a break or time off if you are sick.

As stores grow in size, they need to be staffed by multiple employees. PayScale states that the average salary for a sales associate is $42,589, and a furniture store manager’s average salary is $52,381. In addition to budgeting for salary costs, full-time or part-time employees can require additional expenses such as paid time off, health insurance contributions, and workman’s compensation insurance.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your furniture store is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up accounting for your business

Things to consider before starting a furniture store

Starting a furniture store is a big undertaking, especially if you plan to sell new furniture. Opening a used furniture store will cost less than a new retail store, but it also requires a strategic plan to constantly acquire new and affordable used furniture. New furniture stores can purchase wholesale furniture from a variety of retailers, but the costs can be significant, especially when the business is just starting up.

When it comes to selling furniture, an understanding of current and evolving home furnishing trends will help to keep fresh and interesting inventory in the store. It’s difficult to run a sizable furniture store entirely on your own, so plan on hiring at least some part-time staff to assist with moving, assembling, and delivering furniture.

Because furniture takes up so much space, a store needs to be much larger than your typical independent retail store to offer a large amount of inventory. While a lease on a larger space will cost more, maximizing your storage space can help you make the most of every inch in the store, offering as much inventory as possible to drive sales. If you can find a quality that makes your store unique and sets it apart from competitors, you can leverage this unique quality to draw attention to your store and position it to be a success.


American Home Furnishings Alliance
Home Furnishings Association
National Furniture Association

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