Furniture production business plan: calculation procedure, payback determination, reviews

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

In modern life, no one can do without a cozy and comfortable home without furniture. Literally everything that is connected in our life with home comfort and even luxury is mainly related to high-quality pieces of furniture. Is it possible to imagine a kitchen, living room, bedroom and children's room without sofas, wardrobes and beds? It is possible to develop a business in the furniture industry in two scenarios - to sell furniture already assembled by someone or to manufacture your own. Often novice entrepreneurs, deciding to work in the field of furniture sales, forget to study the needs and specifics of their consumers' requests. To become successful, it is important to develop a furniture production business plan in advance.

In what form is it necessary to register an enterprise

It is important to note that the legal form that is needed for this type of business is an individual entrepreneur (individualentrepreneur). This can be explained by the fact that the clients are ordinary citizens, that is, private individuals. But if it is expected that customers will appear among legal entities, it makes sense to register an LLC (limited liability company).

Business Relevance

Opening a furniture company is a really good decision, because solid and stylish furniture is always in constant demand. But despite this, it is important for aspiring entrepreneurs to remember that there is strong competition in this industry. In order to attract the attention of potential customers with your products, you need to competently approach the organization of the company, that is, draw up a real business plan for furniture production with calculations.

Concept development

What should be considered at the first stage of opening your own company? In the furniture production business plan, it is worth determining what kind of furniture to offer to consumers. According to the functional value, it is divided into the following groups:

• storage systems (dressers, cabinets, racks, cabinets);
• furniture for "relaxation" (beds, chairs, armchairs, sofas);
• dining, coffee and writing tables.

Depending on the design features, pieces of furniture can be:

• embedded;
• collapsible;
• transformable;
• sectional.

A finished furniture production business plan should include a description of the materials from which it is planned to make products. For production may apply:

• natural wood;
• MDF;
• chipboard;
• dense plastic;
• glass;
• metal, etc.

It is important to take into account furniture production and furniture samples in the business plan, namely their detailed descriptions.

An excellent option is the manufacture of custom-made furniture, taking into account all the wishes of customers. Thanks to the original design, interesting shapes and stylish arrangement of colors, it is possible to create truly unique projects. In addition, the manufacture of wicker furniture is considered a profitable business, because such products are sold out quite well in spring, summer and autumn.

Steps of building a business

To successfully implement a furniture production business plan, you need to understand the sequence in which to act. Milestones:

• Registration of an enterprise, which includes the preparation of documentation and its submission to the tax department.
• Search for suppliers of materials and necessary fittings. It is desirable to give preference to those companies that are located next to the assembly shop. This will minimize the risk of delaying the delivery of raw materials, eliminating the stoppage of the production process.
• Purchase of special woodworking equipment.
• Rent space.
• Furniture making.
• Carrying out an advertising campaign.
• Create a quotation and search for distribution channels.

Production technology

If you want to build a successful business, it is important not onlydraw up a successful business plan for furniture production with calculations, but also deal with the intricacies of assembling furniture. Consider the main manufacturing technology of products:

• development of the design of furniture items using a special program;
• cut materials for details of future products;
• formation of mounting holes;
• PVC film sticker, veneer or laminated film;
• furniture assembly.

Financial calculations

To realize the business plan for opening a furniture production, you should, of course, invest start-up capital in the business. To open your own workshop, you will need the following amounts:

• for the purchase of equipment - from 1 million rubles;
• initial purchase of material and accessories - from 150 thousand rubles;
• notarial paperwork and company registration - from 30 thousand rubles.

Besides this, it is important to remember that there are monthly costs that must also be included in the furniture production business plan:

• subsequent purchase of consumables and raw materials - from 150 thousand rubles;
• payment for renting premises - from 50 thousand rubles;
• staff salary - from 100 thousand rubles;
• utilities - from 20 thousand rubles;
• advertising campaign costs - from 10 thousand rubles.

With an average employment, monthly income from the sale of furniture will be from 400 thousand rubles. If you deduct the cost of paying from this amountwages, taxes and other expenses, the amount of net profit will be from 60-70 thousand rubles.

As a result, the starting capital will be from 1.2 million rubles, the monthly profit from the sale of furniture - from 80 thousand rubles, and the payback period of investments - from 14 months.

Working space requirements

Renting a space should be taken seriously, because it will directly affect the he alth of staff and productivity. When choosing working areas, preference should be given to a well-ventilated and dry room, which should be located on the ground floor. It must meet the following requirements:

• total area - from 500 sq. m;
• availability of all necessary communications, for example, a ventilation system, water supply and sanitation;
• 380W power grid;
• availability of accessible access roads and the possibility of forming convenient loading platforms.

The working area should consist of several zones: a production workshop, a showroom, a warehouse for storing materials and finished products. Of course, such conditions are ideal for doing business, which will minimize many costs, but this is not always possible. Most often, warehouses are located a block or even more distance from production facilities.

Equipment

To cut the material, cut recesses for fasteners and even to connect structural elements, you should have the appropriate tools andtechnique. This is mandatory indicated in the business plan of furniture production for Ukraine, Russia and other countries. What kind of equipment for furniture production should business owners buy? The standard kit includes the following tools and machines:

• network drill driver;
• panel saw;
• milling copying equipment;
• drilling and filler equipment;
• edge bander.

Staff

Do-it-yourself furniture production requires experience, specific knowledge and certain professional skills. From this we can conclude that before starting production, it is necessary to hire qualified employees who are able to manage professional tools and machine tools that are installed in the workshop. The staff must include:

• directors;
• manufacturers;
• accountant;
• specialists in cutting and assembling furniture (about 5 people);
• designer;
• manager;
• support workers (2 people).

It should be determined in advance how and who exactly will deliver the furniture if customers do not have time to take out the products themselves. If you plan to deliver orders on your own, then you will additionally need a driver. Since the manufacture of cabinet and other types of furniture is not the safest, experts recommend starting a safety magazine. In it, each of the employees must systematically sign, butonly after organizing a lecture on safety rules.

Recruiting Tips:

• The order pick-up point should have sociable people who can easily find a common language with potential customers.
• When applying for a job, you should pay attention to the personal qualities of a person.

Advertising and sales of finished products

A business plan for the production of furniture facades and main structures must necessarily include advertising costs. To attract buyers, you can use a variety of methods:

• creating your own site or a business card site, promoting them and actively attracting subscribers;
• placement of advertisements in interior magazines, on radio and television;
• mounting banners on special billboards in the city, on public transport.

You can sell furniture wholesale and retail, while agreeing with supermarkets, specialized stores and shopping centers. In the case when your company produces products in large volumes, it is advisable to open furniture stores in which only your products will be sold. It is also important to display this in the furniture production business plan, a sample with calculations of which is presented in this review. You can also partner with large organizations.

Possible risks

Owners of their own business should remember that there are some risks in the business of manufacturing furniture structures:

• increasing the cost of raw materials, and, accordingly, increasing the cost of production;
• loss of market share due to ever-increasing competition;
• Production downtime due to a power outage or broken tools.

By foreseeing possible risks and choosing the right strategy, novice entrepreneurs will be able to quickly recoup all financial investments, and eventually receive a stable high income.

Further business development

Success in the furniture business directly depends on how much you manage to stand out among the "rivals". In fact, there are many options:

• free shipping and assembly;
• low furniture assembly cost;
• seasonal discounts and promotions;
• pranks, etc.

If the strategy of an enterprise is aimed at high-speed stamping of cabinet furniture, then you should not forget about the quality of products. Try to look for new types of furniture, expand the range, and you will be able to distinguish yourself from competitors who most often tend to copy each other.

It is important to think about what presents can be presented to regular and new customers. Investors who are lured into small businesses through franchising will also play a big role. Sales will not increase if you run a large advertising campaign, give bonuses, and at the same time answer an incoming call from a potential client in a sleepy and boring voice.

In a word - create! Despite all the prospects of furniturebusiness, due to the loss of competitiveness of foreign manufacturers, this niche will not remain empty for a long time. As in any business, the one who consistently works on it will win.