Furniture Store Business Plan Template

Written by Dave Lavinsky
furniture business plan template
Table of Contents
Table of Contents

Furniture Store Business Plan Template

If you want to start a furniture business or expand your current furniture store, you need a comprehensive business plan.

You can download our furniture store business plan template (including a full, customizable financial model) to your computer here.

 

Sample Furniture Store Business Plan

Below is a furniture store business plan example with each of the key sections to help you write a furniture store business plan for your own company.

I. Executive Summary

Business Overview

[Company Name], located at [insert location here] is a new, furniture retail store focusing on home furnishings and decor. Our products will be primarily from local manufacturers, highlighting the talent and high design sense of area businesses and craftspeople.

Products and Services

[Company Name] will offer home furniture (tables, chairs, desks, couches, shelves, cabinetry, beds, bed stands, ottomans, stools), soft goods (pillows, tablecloths, bed linens, rugs, carpets), lighting (lamps, ceiling fixtures, wall fixtures), and decor (mirrors, frames, wall hangings, other decorative items). The store will feature a rotating display of a specific designer or manufacturer’s work in our front window and front area of our store, along with information about the “story” of that designer. Transactions will be completed by skilled salespeople on the floor of the store, who will offer a high level of customer service and develop ongoing relationships with customers. Delivery of large items will be offered to customers.

Customer Focus

[Company Name] will primarily serve the residents who live within a 10-mile radius of our store. The demographics of these customers are as follows:

  • 27,827 residents
  • 1,750 workers (who do not live the neighborhood)
  • Average income of $54,700
  • 38.9% married
  • 49.6% in Management/Professional occupations
  • Median age: 34 years

Management Team

[Company Name] is led by [Founder’s Name] who has been in the home decor business for 20 years. While [Founder] has never run a retail store himself, he was director of operations at a local hardwood furniture manufacturing plant. As such [Founder] has an in-depth knowledge of the furniture business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

Success Factors

[Company Name] is uniquely qualified to succeed for the following reasons:

  • There is currently no furniture store devoted to local manufacture in the community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when launched, both from customers and from suppliers.
  • Our location is in a high-volume area with little direct traffic, and will thus be highly convenient to significant numbers of passersby each day.
  • The management team has a track record of success in the furniture business.
  • The furniture retail business is a proven business and has succeeded in communities throughout the United States.
  • Market trends, such as the growth in American support for American manufacturers, are countering the high level of imports into the USA.

Financial Highlights

[Company Name] is currently seeking $460,000 to launch. Specifically, these funds will be used as follows:

  • Store design/build: $170,000
  • Working capital: $290,000 to pay for marketing, salaries, and land costs until [Company Name] reaches break-even.

Top line projections over the next five years are as follows:

FY 1FY 2FY 3FY 4FY 5
Revenue$1,080,000 $2,472,768 $2,830,825 $3,240,728 $3,709,986
Total Expenses$962,000 $1,539,107 $1,719,742 $1,901,321 $2,112,641
EBITDA$118,000 $933,661 $1,111,082 $1,339,407 $1,597,344
Depreciation$25,600 $25,600 $25,600 $25,600 $25,600
EBIT$92,400 $908,061 $1,085,482 $1,313,807 $1,571,744
Interest$29,946 $26,202 $22,459 $18,716 $14,973
Pre Tax Income$62,455 $881,858 $1,063,023 $1,295,091 $1,556,772
Income Tax Expense$21,859 $308,650 $372,058 $453,282 $544,870
Net Income$40,595 $573,208 $690,965 $841,809 $1,011,902
Number of locations11111
Average customers/day2022232527
Number of orders3,6007,7768,3989,0709,796

 

II. Company Overview

Who is [Company Name]?

[Company Name] located at [insert location here] is a new, furniture retail store focusing on home furnishings and decor. Our products will be primarily from local manufacturers, highlighting the talent and high design sense of area businesses and craftspeople.

[Company Name] was founded by [Founder’s Name]. While [Founder’s Name] has been in the furniture business for some time, it was in [month, date] that he decided to launch [Company Name]. Specifically, during this time, [Founder] took a trip to Fort Lauderdale, FL. During his trip, [Founder’s Name] frequented an independently-owned furniture store that enjoyed tremendous success by focusing on locally-made products. After several discussions with the owner of the store, [Founder’s Name] clearly understood that a similar business would enjoy significant success in his hometown.

Specifically the customer demographics and competitive situations in the Fort Lauderdale location and in [insert location here] were so similar that he knew it would work. Furthermore, after surveying the local population, this theory was proven.

[Company Name]’s History

Upon returning from Fort Lauderdale and surveying the local customer base, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].

[Founder’s Name] has selected three initial locations and is currently undergoing due diligence on each property and the local market to assess which will be the most desirable location for the store.

Since incorporation, the company has achieved the following milestones:

  • Developed the company’s name, logo and website located at www…
  • Determined the list of products to be offered
  • Determined equipment and inventory requirements
  • Identified fifty craftspeople and businesses as potential suppliers and received preliminary interest from them

[Company Name]’s Products

Below is [Company Name]’s initial product list. As you can see all items are classified under the following four main categories:

  1. Home Furniture
  2. Soft Goods
  3. Lighting
  4. Decor
[Company Name] Initial Product List
Home FurnitureLighting
Dining TablesTable lamps
Dining ChairsStanding lamps
Living Room ChairsWall fixtures
CouchesCeiling fixtures
OttomansChandeliers
Easy Chairs
Coffee TablesD‚cor
ShelvesMirrors
CabinetryTapestries
BedsFrames
Bed-side tablesFramed Art
StoolsWall Hangings/Accents
Wall Fountains
Soft Goods
Pillows
Pillow cases
Bed linens
Tablecloths
Towels
Bathmats
Doormats
Rugs
Carpets

The store will feature a rotating display of a specific designer or manufacturer’s work in our front window and front area of our store, along with information about the “story” of that designer. Transactions will be completed by skilled salespeople on the floor of the store, who will offer a high level of customer service and develop ongoing relationships with customers. Delivery of large items will be offered to customers.

Store Design

[Company Name] will develop a 15,000 square foot store whose key elements will include the following:

  • Main Showroom
  • Side Showrooms
  • Warehouse
  • Administrative Office
  • Restrooms

Below please find a rough sketch of the floor plan:

The retail location has 50 dedicated parking spots which should suffice even in peak hours.

[Company Name] plans to be open 7 days a week, from 10 AM to 7 PM. As demand dictates, we may extend or reduce our hours.

 

III. Industry Analysis

[Company Name] directly or indirectly competes with all furniture providers nearby our store that offer upscale, quality furniture. Competition will come from department stores, specialty furniture stores, and furniture chain stores. Direct competition will come from companies offering locally manufactured home furnishings and decor similar to [Company Name].

Industry Statistics & Trends

The following industry size facts and statistics bode well for [Company Name].

According to Research and Markets’ Household Furniture Consumption report, the U.S. retail furniture market is estimated at $78.5 billion. This translates to roughly $260 annual furniture spend per capita for Americans. At manufacturer’s prices the market is estimated at $30.7 billion. The report says that “over the last two decades household furniture purchases increased significantly from $29.3 billion to $78.5 billion, or 168%. In other words, sales increased at an average annual pace of approximately 5.5% over the period.”

The current contraction in home sales is causing furniture sales to decrease temporarily.
However, home sales are expected by most analysts to be on the rise again by the time [Company Name] is launched.

The following statistics are from Research and Markets’ report and other sources.

  • “38.0% is wooden case-goods (mainly bedroom furniture), 33.9% is upholstered furniture (mainly chesterfields and matching chairs), 17.1% is mattresses and foundations, and the remaining 11.0% is metal furniture (mainly outdoor furniture).”
  • “The number of households in the United States will grow by about 12.5% over the next decade (that is about 1.2% per year). This pace is a bit faster than the 8.0% pace for the total population.”
  • Buying local products reduces pollution, bolsters the local economy, and contributes to the attainment of higher living standards for one’s community.

 

IV. Customer Analysis

Demographic Profile of Target Market

[Company Name] will serve the residents of [company location] and the immediately surrounding areas.

The area residents we serve are affluent and are expected spend more on furniture per capita than the national averages.

The precise demographics of the town in which our retail location resides is as follows:

WilmetteWinnetka
Total Population26,09710,725
Square Miles6.893.96
Population Density3,789.202,710.80
Population Male48.04%48.84%
Population Female51.96%51.16%
Target Population by Age Group
Age 18-243.68%3.52%
Age 25-345.22%4.50%
Age 35-4413.80%13.91%
Age 45-5418.09%18.22%
Target Population by Income
Income $50,000 to $74,99911.16%6.00%
Income $75,000 to $99,99910.91%4.41%
Income $100,000 to $124,9999.07%6.40%
Income $125,000 to $149,9999.95%8.02%
Income $150,000 to $199,99912.20%11.11%
Income $200,000 and Over32.48%54.99%

Customer Segmentation

We will primarily target the following three customer segments:

  1. Couples Residing In Area: The store will attract both young couples decorating and furnishing their first home and older couples replacing furniture items or outfitting a second home.
  1. Women Residing in Area: Home furnishing decisions are primarily made by women, and they are expected to be interested in the high design sense offered with our products.
  1. Tourists: Tourists visiting the area will be interested in locally made goods rather than looking at furniture they could purchase anywhere. [Company Name] will become a tourist destination due to its large showroom of local furniture.

 

V. Competitive Analysis

Direct & Indirect Competitors

The following furniture stores are located within a 10-mile radius of [Company Name], thus providing either direct or indirect competition for customers:

Joe’s Furniture

Joe’s Furniture is described by their own marketing as “selection that can’t be beat” and has been in business for 32 years. Joe’s offers a wide variety of furniture and decor options.

Joe’s focuses on national and regional manufacturers that each sell a wide variety of products. Joe’s generally has low, medium and high-priced options for each type of furniture or decor. Joe’s does not sell at least 75% of the local suppliers that [Company Name] has spoken with. Joe’s is also located on the outskirts of town and does not offer delivery services, referring customers to third-party delivery companies.

Beautiful Living

Beautiful Living has been in business for 5 years focusing on living room and bedroom furniture items, and does not carry items for other rooms. All items offered are medium or high-end.

Beautiful Living offers much greater customer service than Joe’s Furniture and its salespeople are much more knowledgeable about furniture and home design. However, the location is only 5,000 square feet and, therefore, can offer only a limited selection on-site at any given time. Additional sales are made via catalog by showing customers other options.

IKEA

IKEA opened a location five miles way from [Company location] one year ago. IKEA has been successful, selling low-priced furniture primarily to young residents and college students, but is also victim of community backlash. There was a high level of controversy when it moved to town, with a large and vocal group of townspeople believing this move would hurt local furniture retailers.

[Company Name] has several advantages over IKEA including:

  • IKEA works on a self-service model and has very limited customer service and sales help
  • IKEA requires home assembly and does not offer delivery of furniture
  • IKEA’s products are manufactured remotely and feature a Swedish design sensibility, which is not for everyone

We expect that IKEA will continue to thrive based on its location and excitement about a recognizable chain among some townspeople. However, we expect that more and more customers will frequent [Company Name] based on the focus on customer service, local products, and the fact that we are independently owned and operated. Many of those who spoke out against IKEA are likely to support [Company Name] for the very same reasons.

Competitive Pricing

Type of furnitureJoe'sBeautifulIKEA
Couch$300-$400$400-$600$500-$700
Dining Table$500-$600$700-$800$600-$800
Dresser$300-$400$350-$550$200-$400
Arm Chair$300-$430$400-$550$200-$425

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include:

  • Locally-Made Products: [Company Name] will work with the best local suppliers for its items, ensuring that 90% of items will come from within a 100-mile radius of the store. Local residents appreciate this support for local manufacturers and tourists appreciate that they will find items that they cannot find where they are from.
  • Management: Our management team has years of business and furniture experience that allows us to sell to and serve customers in a much more sophisticated manner than our competitors.
  • Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all the local leaders and newspapers, as well as furniture suppliers. As such, it will be relatively easy for us to build branding and awareness of our store and to establish a product line.

 

VI. Marketing Plan

You can download our furniture store business plan template (including a full, customizable financial model) to your computer here.

The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.

The [Company Name] Brand

The [Company Name] brand will focus on the Company’s unique value proposition:

  • Offering high-quality, locally-made furniture, soft goods, lighting and decor items
  • Telling the “stories” of manufacturers and craftspeople within the store
  • Providing excellent customer service, from a hands-on sales team to delivery options

Promotions Strategy

[Company Name] expects its target market to be individuals living within a 10-mile radius of its store. The Company’s promotions strategy to reach these individuals includes:

Direct Mail

[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will offer discounts and/or provide other inducements for people to visit the store.

Public Relations

We will contact all local and area newspapers and television stations and send them a press release describing the opening and unique value proposition of [Company Name].

Advertising

[Company Name] will initially advertise in local newspapers and sponsor community events in order to gain awareness.

Ongoing Customer Communications

[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products, and more.

Pre-Opening Events

Before opening the store, [Company Name] will organize pre-opening events designed for local merchants and press contacts to create buzz and awareness for [Company Name].

Pricing Strategy

[Company Name] pricing will be appropriate for the high quality and level of service associated with the store. However, the store will carry products offered at a range of prices to allow even those with modest budgets to have options. Pricing for similar items will be higher than Joe’s Furniture and IKEA, and lower than Beautiful Living.
 

VII. Operations Plan

Functional Roles

In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:

Administrative Functions

  • General & administrative functions including legal, marketing, bookkeeping, etc.
  • Sourcing suppliers and managing supplier relations
  • Hiring and training staff

Warehouse Functions

  • Warehouse management
  • Delivery services management

Retail Functions

  • Floor sales and customer service
  • Writing and producing copy for featured manufacturer’s “stories”
  • Janitor/maintenance personnel to keep the store clean

Milestones

[Company Name] expects to achieve the following milestones in the following [] months:

DateMilestone
[Date 1]Finalize lease agreement
[Date 2]Design and build out [Company Name]store
[Date 3]Hire and train initial staff
[Date 4]Launch [Company Name]store
[Date 5]Reach break-even

 

VIII. Management Team

Management Team Members

[Company Name] is led by [Founder’s Name] who has been in the home decor business for 20 years. While [Founder] has never run a retail store himself, he was director of operations at a local hardwood furniture manufacturing plant. As such [Founder] has an in-depth knowledge of the furniture business including:

  • Warehouse management and operations
  • Delivery management
  • Furniture design basics
  • Furniture marketing
  • Hiring and training workers

[Founder] is a member of the American Home Furnishings Alliance (AHFA) and has spoken at AHFA conferences on best practices in manufacturing furniture and the value of locally made furniture for marketing, environmental, and economic purposes.

[Founder] graduated from the University of ABC where he majored in Engineering.

Hiring Plan

[Founder] will serve as the store manager. In order to launch the store, we need to hire the following personnel:

  • Sales manager (requires retail experience in a home-related field)
  • Salespeople (3 to start)
  • Part-Time Bookkeeper (will manage accounts payable, create statements, and execute other administrative functions)
  • Warehouse/Delivery staff (2 to start – responsible for warehouse stocking, deliveries, and set-up of showroom floor as directed by store manager)

 

IX. Financial Plan

Revenue and Cost Drivers

[Company Name]’s revenues will come from the sale of furniture and decor items to customers.

The major costs for the company will be cost of goods sold (supplier costs), salaries of the staff, and rent for a prime location. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.

Capital Requirements and Use of Funds

[Company Name] is seeking a total funding of $460,000 to launch its store. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.

Specifically, these funds will be used as follows:

  • Store design/build: approximately $170,000
  • Working capital: approximately $290,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even

Key Assumptions & Forecasts

Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.

Number of customers per dayPer location
Year 14
Year 24
Year 35
Year 45
Year 55
Average order price$1,000.00
Annual increase in order price6.00%
Annual Lease (per location)$50,000
Yearly Lease Increase %2.50%

5 Year Annual Income Statement

Year 1Year 2Year 3Year 4Year 5
Revenues
Product/Service A$151,200 $333,396 $367,569 $405,245 $446,783
Product/Service B$100,800 $222,264 $245,046 $270,163 $297,855
Total Revenues$252,000 $555,660 $612,615 $675,408 $744,638
Expenses & Costs
Cost of goods sold$57,960 $122,245 $122,523 $128,328 $134,035
Lease$60,000 $61,500 $63,038 $64,613 $66,229
Marketing$20,000 $25,000 $25,000 $25,000 $25,000
Salaries$133,890 $204,030 $224,943 $236,190 $248,000
Other Expenses$3,500 $4,000 $4,500 $5,000 $5,500
Total Expenses & Costs$271,850 $412,775 $435,504 $454,131 $473,263
EBITDA($19,850)$142,885 $177,112 $221,277 $271,374
Depreciation$36,960 $36,960 $36,960 $36,960 $36,960
EBIT($56,810)$105,925 $140,152 $184,317 $234,414
Interest$23,621 $20,668 $17,716 $14,763 $11,810
PRE-TAX INCOME($80,431)$85,257 $122,436 $169,554 $222,604
Net Operating Loss($80,431)($80,431)$0$0$0
Income Tax Expense$0$1,689 $42,853 $59,344 $77,911
NET INCOME($80,431)$83,568 $79,583 $110,210 $144,693
Net Profit Margin (%)-15.00%13.00%16.30%19.40%

5 Year Annual Balance Sheet

Year 1Year 2Year 3Year 4Year 5
ASSETS
Cash$16,710 $90,188 $158,957 $258,570 $392,389
Accounts receivable$0$0$0$0$0
Inventory$21,000 $23,153 $25,526 $28,142 $31,027
Total Current Assets$37,710 $113,340 $184,482 $286,712 $423,416
Fixed assets$246,450 $246,450 $246,450 $246,450 $246,450
Depreciation$36,960 $73,920 $110,880 $147,840 $184,800
Net fixed assets$209,490 $172,530 $135,570 $98,610 $61,650
TOTAL ASSETS$247,200 $285,870 $320,052 $385,322 $485,066
LIABILITIES & EQUITY
Debt$317,971 $272,546 $227,122 $181,698 $136,273
Accounts payable$9,660 $10,187 $10,210 $10,694 $11,170
Total Liabilities$327,631 $282,733 $237,332 $192,391 $147,443
Share Capital$0$0$0$0$0
Retained earnings($80,431)$3,137 $82,720 $192,930 $337,623
Total Equity($80,431)$3,137 $82,720 $192,930 $337,623
TOTAL LIABILITIES & EQUITY$247,200 $285,870 $320,052 $385,322 $485,066

5 Year Annual Cash Flow Statement

Year 1Year 2Year 3Year 4Year 5
CASH FLOW FROM OPERATIONS
Net Income (Loss)($80,431)$83,568 $79,583 $110,210 $144,693
Change in working capital($11,340)($1,625)($2,350)($2,133)($2,409)
Depreciation$36,960 $36,960 $36,960 $36,960 $36,960
Net Cash Flow from Operations($54,811)$118,902 $114,193 $145,037 $179,244
CASH FLOW FROM INVESTMENTS
Investment($246,450)$0$0$0$0
Net Cash Flow from Investments($246,450)$0$0$0$0
CASH FLOW FROM FINANCING
Cash from equity$0$0$0$0$0
Cash from debt$317,971 ($45,424)($45,424)($45,424)($45,424)
Net Cash Flow from Financing$317,971 ($45,424)($45,424)($45,424)($45,424)
SUMMARY
Net Cash Flow$16,710 $73,478 $68,769 $99,613 $133,819
Cash at Beginning of Period$0$16,710 $90,188 $158,957 $258,570
Cash at End of Period$16,710 $90,188 $158,957 $258,570 $392,389

 

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