How to start furniture business

Furniture business making has huge market potential in this current scenario. This article is comprehensively discussing all the details to start and run a furniture business. As we all know, furniture is extensively using in everywhere of the world.

Furniture is essential and unavoidable in any places or institutions such as houses, hospitals, offices, schools, hotels etc. Therefore furniture manufacturing business and its sales both as wholesale and retail has big business opportunity. This article emphasizes all the technical and practical aspects to start such type of a business.

furniture business

Furniture has different kinds of uses in different fields. Different kinds of raw materials are also using to make various furniture. Even though furniture is mainly made by wooden materials, it also can be made by using steel and aluminum metals.

Among wood we have real woods and play woods. Here we are trying to explain about the business idea of wooden furniture. This business idea can be divided into three categories such as furniture manufacturing business, retail furniture business and wholesale furniture business.

Furniture manufacturing business

Firstly we can discuss about furniture manufacturing business in detail. When we are planning to establish a furniture making business, we have to be clear about many issues.

There are various kinds of products in furniture such as tables, bed, shelves, dining tables, computer tables sofa set, office furniture etc. If you are planning to enter furniture manufacturing business. Initially you have to decide which kind of product is your are going to make.

To decide the product, first of all you should make a market study by using your experience and idea. As best business strategy, it is better to specialize in the production of that particular product alone.

The attractive thing is that we can start this kind of a unit without a huge amount of initial investment. It is also beneficial to reduce the initial pressure and risk in business. Following section is analyzing all the matters which you have to take care when you are planning to start a furniture manufacturing unit.

Investment for furniture manufacturing business

In any kind of manufacturing unit, it is essential to have a specific amount of fixed investment. In furniture manufacturing business, the main items of investment expenditures are building, machinery, electrical expenditures and working capital.

Building investment

Firstly, we can analyze about the matters which you have to take care when constructing the building for furniture manufacturing business. The most important thing which you have to consider here is that area of production.

You should be vigilant to not to select an area to built your plant which will make disturbances for people who are living the surrounding of the unit. It is better to build the building in industrial areas, if possible.

If you are constructing building in your own property, make sure it has the distance of 10 meters minimum from others property. It will be more desirable to collect the consent letter from the families who are living the surrounding of the building to establish the unit.

Even though it will not make any considerable issues and environmental problem. It will produce and spread wood powder in the atmosphere. So, it will be more feasible to construct the unit where the numbers of neighboring residents are nil or very less.

It is enough to have a shed with 10 meters length and 5 meters width as manufacturing area. Approximately, it needs the area of 550 square feet in total. To construct this kind of a shed, it need about the cost of RS 134000.

Machinery investment

In the making process of furniture, various types of machines are using like different cutting and sharpening machines, and edge clearing machines.

The main machines for this process are granter machine, cutting machine and edge clearing machine. if you are planning to establish it as a large scale operation, you can use many more sophisticated and advanced machines like bending machines.

As it is labor intensive production process, it needs mare amount of skilled labors than machinery. It will be enough to have 1 lakh rupees to organize these necessary machines. The amount of machinery is depends on the size of the unit and the requirement and interest of the investor.

Electrical investment

Electricity connection can be access both in single face connection and three phase connection. It depends of the capacity of the machine which you are using on the production. For electricity connection and its work, it cost about RS 75000.

You can decide the type and size of production based on the working capital which you own. Anyhow, you can expand your business of furniture manufacturing on the basis of your financial capacity and amount of working capital. Thereby you can increase your earning and profit margin.

Raw material for furniture making unit

The main raw materials for furniture making unit are wood, gum, nail and other items for beatification process like mice. When you are using latest technologies you have to use polishing materials of oils, paints and other chemicals for its modification. To access all these items, we should have required amount of working capital.

License for furniture manufacturing business

When the people are constructing a very small size of furniture making unit in remote areas. Usually they will not take any kind of licenses to establish the unit.

They produce different items of products based on the advanced orders from show rooms and other businesses. But if you are establishing a minimum size of furniture manufacturing business, it is necessary to have required licenses.

Because, manufacturing and sales of the furniture business should be in accordance with the law and regulations of the government as all other products. Otherwise, you might be facing any problems and adverse consequences from the government and public.

As all other kinds of units, it also needs NOC and other papers from Panchayath. The legal procedures are subjected to the capacity of machineries which you are using in the production process.

If you are using small size of machineries, it is enough to have Panchayath licenses alone to run the unit. But if you have power consumption of more than 5 HP, you should have consent from pollution control board. If you have a wider business connection and supply outside of your neighboring surrounding, it is compulsory to have GST registration. By GST registration, you can supply your goods to anywhere in the country.

Marketing tips for furniture

Marketing is very important in furniture manufacturing business. Many of its related issues we have already discussed in this article. As we already said, firstly you have to decide your product which you are going to produce.

you should specialize in the production of that good by ensuring its quality and designs by using your skill. By this you can expand your business. For example, if you are producing sofa set, you must concentrate only in the production of sofa set by producing different of its types. It will be helpful demand more of your product in market.

The main markets of furniture manufacturing units are furniture shops. All most all furniture shops have their own manufacturing sections and units. Usually the furniture shops are making dining tables, beds and shelves in these units. Therefore, by producing those products, we cannot increases and expand our sales and demand in the market.

Select items

So, it is better to produce other items of products like chairs, sofa set, office chair and tables and other rare products in your manufacturing unit. Try to supply the products to shops as early as possible and thereby you can use those shops as warehouse for our products.

It will be beneficial to display our products to the public without creating a warehouse and show room by ourselves. If you are adopting his method, you cannot gate ready payment for your product. Anyhow you can sell your entire product in maximum shops. Now we can examine its profit margin.

Profit margin from furniture

In the furniture business, the amount of profit is mainly determined by your purchasing ability. The important raw material in this process is wood. Various type woods with different quality are available at many places. The main issue in this business is to find those places and suppliers to get wood at maximum possible lowest price.

This is the crucial aspects to determine profit. Anyhow, on an average, a manufacture can earn about 40% or above profit margin from this activity. If you have good network of shops and good purchasing capacity with big market, you can earn he amount profit within short time from this business. Because, it’s turnover and expected profit potential is very high.

5 Important tips for furniture business

  1. Selection of skilled labours is very important in this business. The terms and conditions should clearly define when hiring ach labours. If your providing an additional incentive or bonus to your skilled labours more than the usual wage of a carpenter, they will stay with you for long time by using their maximum skill and productivity. So, skilled labours are the valuable asset of a manufacturing unit.
  2. Second important business trick is related to the selection of products and its design. It is very important to select highly demanded product providing with unique and attractive design. It will be beneficial to attract more customers to your product.
  3. Third this is related to your ability of wood purchasing at maximum possible lowest price. The skill and your bargaining power to buy wood will be the secret of your business success.
  4. Other important thing is the quality and price of the product. The quality of your product is entirely decided by yourself. If you are offering your product at maximum possible lowest competitive price by ensuring the maximum quality, your product will have consistent demand for your product in market for a long time.
  5. The last, but not least, is related to finical capacity and marketing. The matters related to marketing have explained above in detail. The relation between financial capacity and working capital with the possibility of expansion and development of the business also have discussed above in detail

Furniture retailing business

To run a successful furniture retailing business, it is desirable to have an idea and relation with furniture and its manufacturing. If you do not have an experience in working in furniture shops or its manufacturing units.

It will be very difficult to know the secrets of this business and optimum utilization of its business potential. So, it is not desirable to establish furniture show rooms directly without and direct or indirect connection with furniture.

Anyway, we can briefly explain all the important matters to consider when a new entrepreneur is establishing a retail furniture show room. Firstly he has to construct or arrange an adequate show room. Now we can look at the major issues to take care when taking a show room.

Select location

The facilities or capacity of the show room and it location are very important in this matter. If you are a retailer of a furniture shop, the area of show room should be adequate to stock adequate amount of furniture. It is very important to display maximum number of products. The required amount of working capital to fill this show room is also very important in this regard.

Customer care

Customer care and link with customers is very crucial in this business. It will be helpful to increase your sale volume. Another main thing related to retail furniture show room is purchasing skill. The selection of products to your show room is very significant.

Purchasing skill

Try to purchase only highly demanded product with variety and attractive designs. Make sure to stock only demanded and trendy products in market. It is important to reduce the stock of traditional and less demanded product to minimum level.

The scale and margin of profit of a retail sow room is depends on their volume of sales. The power to canvas and attract customers will highly influence the level of profit.

Whole sale furniture business

The prospects and potential of whole sale business in furniture is very limited. As we already said, it market potential at whole sale level is very low. The man reason for this low scope is that most of the retail shops might have their own manufacturing unit. Almost all manufactures also selling it directly to retail shops. Therefore, the whole sale business scope in this area is very low.

This article has touched and explained all the matters to establish and run a furniture business in detail. The article has structurally classified into three categories of furniture manufacturing business, furniture retail business and whole sale business. If you have any doubt or if you need any clarification regarding this explanation, you can comment in the comment box. To know about other type of business, y can use the link of “related business”. All the information given this article is purely based on our study and experience in the market. Therefore, the success and failure of your business entity which you have established based on this article is not in our responsibility.

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