Business plan for furniture production: cabinet, upholstered, office furniture

General concept of the project

The popularity of upholstered furniture is explained by several factors.
Firstly, its production is increasingly oriented towards “production to order”. Small enterprises engaged in the mass production of large quantities of cabinet furniture and solid wood products find it difficult to compete in the market, while the production of small quantities of upholstered furniture can provide quite acceptable profitability.

Secondly, in small private workshops engaged in the manufacture of custom-made upholstered furniture, a significant part of the work is performed manually, which does not require the purchase of high-performance and expensive production and technological equipment.

Thirdly, furniture production in small enterprises is easily and quickly restructured to produce new products due to changes in consumer tastes and fashion trends.

Fourthly, creating a small furniture manufacturing enterprise is an excellent experience in building a large-scale profitable business in the future.

Fifthly, in the Russian market the niche for making custom-made furniture in small towns and rural areas is practically free, so here the prospects for successful work for small furniture workshops are greatest.

Project Summary

The calculation will be made for a furniture workshop that produces cabinet furniture in the mid-price segment. These are office furniture, kitchens, cabinets, etc. The enterprise will be organized on the principle of an incomplete cycle, that is, suppliers will prepare raw materials, the enterprise will produce ready-made panels for assembly according to the developed drawings. To launch the project, our own funds will be used, which will provide an additional advantage in shaping the pricing policy and a shorter payback period.

Furniture business: how to build a furniture manufacturing business.

Description of the object

Our business plan for the production of upholstered furniture with calculations is designed to assist in the creation and launch of a small workshop that will produce custom-made products. The most productive use of the document is to organize production in small towns. The enterprise must provide a full technological cycle for the production of upholstered furniture and its sale to consumers.

Main range of products:

• Sofas.
• Banquettes.
• Ottomans.
• Armchairs.
• Sun loungers.
• Chairs.

Surprisingly, there is no definition of “upholstered furniture” in the regulatory and technological documentation. The current standards use concepts such as “sitting furniture” and “lying furniture”. Moreover, these products can be made with both soft and hard elements. Therefore, in the generally accepted understanding, upholstered furniture means products whose design contains traditional elements of “softness”: pillows, springs, various fillings, etc.

Project payback period

Effective implementation of an investment project for a furniture business will allow it to be repaid within 3 to 5 years.

Business plan for furniture production: cabinet, upholstered, office furniture

The business plan has a clear structure, contains detailed financial calculations, and the financial model allows you to flexibly change any business parameter. This is the optimal solution for those who plan to attract investments, want to get a loan or have a ready-made template for developing their business plan.

Structure of the financial model of furniture production

A financial model is a separate file in MS Excel format - essentially it is a separate product designed for business planning and calculation of all its indicators. Each of the parameters of the financial model can be changed manually. There are no macros in the financial model. All formulas are transparent and changeable.

Detailed calculation of investments in furniture production

While working on a business plan, we look at dozens of different sources of information. This includes data from equipment suppliers, industry portals, interviews with market experts, and official statistics - such systematic data analysis provides a complete picture of all project parameters: prices, equipment costs, premises costs, costs, etc. .

Business income plan

A necessary component of a full-fledged business plan is a flexible sales plan. It is important, on the one hand, to have a forecast for the business as a whole, and on the other hand, to be able to look at profitability in the context of a separate profit center or even a separate product.

Cash flow forecast for furniture production

The cash flow statement is the most important document in any business plan. Contains comprehensive information about the company's operating, investment and financial inflows and outflows, and also allows you to evaluate the overall picture of the company's performance.

Upholstered furniture market analysis

Statistics show that an average-income Russian changes a sofa or armchair approximately once every 3-4 years. Most of the current upholstered furniture market in the country is products in the mid-price range. They occupy 60% of the market. The share of premium upholstered furniture is relatively small and amounts to about 13%. This is due, first of all, to the high cost of such products. In addition, in this price range, consumers more often choose branded products from foreign manufacturers.

Today, the domestic furniture market is characterized by a decrease in the number of production facilities operating “on stream”. An increasing number of enterprises are moving to producing custom-made products.

It often happens that consumers, following fashion, order furniture that, in terms of its performance characteristics, is significantly inferior to “in-line” products. An example of this is the production of original soft corners with silk or white upholstery. It goes without saying that such furniture is extremely impractical and that when ordering it, the consumer expects a change in “scenery” within one, maximum two years.

This trend is also supported by a financial factor: the activities of enterprises with mass production require significant investments. These resources are directed not only to the start-up needs associated with the purchase of equipment, but also to the current ones, due to the need to purchase large quantities of material, components, upholstery fabrics, etc. If necessary, it can be very difficult to withdraw money from the business in this case, because the funds remain “frozen” in the form of loans, finished products, debts to suppliers of components and materials.

As practice shows, the seasonal factor has a great influence on this business. For example, during a period of decline in demand, out of 1000 products put up for sale, no more than 200-250 pieces are actually sold. To ensure the profitability of the enterprise, it is necessary to target the sales of finished products in the region where it is located. This will not only reduce transportation costs, but also more sensitively respond to changes in the preferences of the main consumers of products, thereby optimizing overall production costs. It will be profitable to supply only premium furniture over long distances.

Furniture store advertisement

Why invest money in advertising? So that people know that there is a company, it is engaged in the arrangement of residential premises, regularly informs clients about the arrival of new collections, the beginning of discounts and, with well-structured work, thereby attracts a new audience.

To develop a business you need a website. You also need pages on popular social networks, a customer base to whom you can send commercial offers by e-mail, printed catalogs with product samples, and branded brochures. Methods are combined with each other and the optimal one is selected.

If you have an initial budget, you can contact a marketer who will conduct a detailed market analysis, help identify the target audience and calculate options for advertising investments with a high probability of return.

For those who start without a financial cushion, there are many options to make themselves known with minimal investment. A fair number of companies sell furniture “from photographs” - they create a page on Instagram or Vkontakte, post pictures of beautiful interiors and offer services for calculation, design and production of identical goods. And, as statistics show, people are ordering.

If the exhibition area is located on the territory of a furniture center, this is already advertising. All it takes is an attractive sign and an original display. Further development depends on the work of consultants and the quality of products.

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If the store is based in a separate building, you should organize a grand opening: print flyers, hire promoters, decorate the entrance and offer pleasant bonuses to the first customers in honor of the start of work.

Description of the object

The most popular types of upholstered furniture in our country remain transforming models. The newly created enterprise will provide a full technological cycle for their production, which includes the following stages.

1. Cutting lumber in a carpentry shop. Here operations are carried out for cutting boards and plywood into blanks and assembling wooden furniture frames.
2. Upholstery of frames. This technological operation is carried out in the upholstery segment of the production facility. During this process, the frame is covered with dornite, then with foam rubber, on top of which the upholstery material is fixed.
3. Installation of soft elements. The main element in most types of upholstered furniture are springs. They perform an orthopedic function and are mounted on products in the form of blocks, which are installed in the center and perimeter of the product. Then the spring blocks are covered with foam rubber.
4. Pasting with protective materials. Dense woven material and spunbond are sequentially fixed on top of the spring block by adhesive, which protect the upholstery from abrasion on the springs.
5. Laying foam rubber or padding polyester. Another soft element about 40 mm high is placed on top of the spacers. The presence of synthetic padding in it will allow the foam rubber to “breathe”.
6. Cutting upholstery materials in the sewing workshop. Here, special equipment is used to perform operations with various types of upholstery: from ordinary fabrics to genuine leather. After cutting the upholstery to the dimensions of the product design, it is “targeted” to the multilayer base.
7. Manufacturing and fastening of covers. Covers are manufactured in strict accordance with the dimensions of the product. They are worn over a frame with a fixed base.
8. Control assembly of the finished product. This operation is carried out in order to check the functionality of all elements of the product’s design and subsequently correct any detected deficiencies.
9. Product packaging in polyethylene and cardboard.

These technological operations differ little in the manufacture of sofas or armchairs. These products only use different transforming mechanisms (if provided for by the design).

It is planned to launch an enterprise that fully implements the technology described above within two months from the start of the project. To do this, you must complete the following steps:

1. Study the state of affairs in this industry and analyze the regional market for furniture production.
2. If necessary, obtain advice from representatives of this business.
3. Draw up a detailed business plan with calculations for your business organization option.
4. Conclude an investment agreement and receive a loan.
5. Register a business.
6. Conclude agreements for the purchase of materials, furniture fittings and other components for the manufacture of upholstered furniture.
7. Select the required production premises and conclude a lease agreement.
8. Purchase technological equipment, install and configure it.
9. Select and, if necessary, train company personnel.
10. Establish markets for products.
11. Organize an active advertising and marketing campaign.

These activities are planned to be completed within the following time frames:

The terms are approximate and depend on the specific conditions of production organization.

Production plan

Production will be built on the principle of incomplete cycle. We will produce popular models of prefabricated cabinets, cabinets, tables and kitchens and other cabinet furniture to order according to the required sizes and configurations. The production will process purchased ready-made chipboards and MDF boards according to specified patterns, installing the appropriate fittings, delivering them to the consumer and assembling them on site.

Premises requirements

You will need two premises: for production and for receiving clients. It's good if they are nearby. In terms of requirements, they differ from each other, because designed for different functions:

• Production premises – area of ​​at least 500-600 m2. Requirements - a spacious heated room on the ground floor, with the possibility of organizing storage space and installing equipment. You also need an equipped entrance and platform for unloading raw materials and materials, and shipping finished products.
• The office must be located in a place accessible to clients, preferably in the center of business and trade activity. It would be optimal to equip a showroom in the office space where product samples will be displayed. Area – 50-60 m2, preferably on the first floor. Mandatory requirements - availability of communications, cosmetic repairs.

Equipment

To produce cabinet furniture parts, you need to purchase the following equipment:

• Machines that are integrated with computer programs for modeling and manufacturing furniture. These are “Astra-Cutting”, “Astra-Furniture Designer”.
• Jigsaw;
• Milling machine;
• Lathe.
• Other small tools.

Staff

Working on a production floor requires certain specialized knowledge and skills. The following workers will be needed:

• Workshop specialists – 5-7 people. Requirements: experience with the main types of furniture machines when processing wood - chipboards (chipboards) and MDF - boards.
• Production foreman (with financial responsibility for raw materials, machines and supplies) – 1 person. Requirements: experience in organizational work, knowledge of all production processes for the manufacture and assembly of cabinet furniture.
• Driver – 1 person.

Raw material suppliers

The raw materials that will be used in production are particle boards (chipboards) and MDF boards. Thus, suppliers of plates (imported and domestic), consumables - adhesives, paints, coatings, accessories - handles, hinges, hinges, drawer guides, fasteners, locks, etc. will be needed.

Requirements for suppliers - a well-known company, the presence of all necessary certificates, the possibility of delivery, preferably - delivery with deferred payment. You can find suppliers through specialized publications or on the Internet, be sure to compare several offers.

Organizational and legal form, taxation system and enterprise registration

The enterprise is created within the framework of the organizational and legal form of LLC (limited liability company). This choice is due to the advantages that this form of business provides: first of all, the ability to work with legal entities and broader opportunities for selling finished products.

The upholstered furniture production workshop will operate under a general taxation system, which provides for the payment of the following taxes:

Registration of a business entity is carried out in the following areas of activity:

• Production of other furniture – OKVED 36.14.
• Retail trade in furniture – OKVED 52.44.1.
• Wholesale trade of furniture - OKVED 51.47.11.

The production of upholstered furniture does not require a license. Certification of products is carried out at the request of the manufacturer in order to increase the competitiveness of manufactured products.

Legal registration of business

Choosing a tax system

In the retail trade sector, there are 4 main tax regimes: UTII (unified tax on imputed income), simplified taxation system (simplified taxation system), OSNO (general taxation system), PSN (patent taxation system).

The most popular is the simplified taxation system (USN). For individual entrepreneurs there are no restrictions on the use of the simplified tax system; for LLCs there are a number of requirements for the number of full-time employees, income and branches.

Note: the tax rate depends on the region, the type of activity of the company and the turnover of funds.

In general, the choice of system looks like this:

• small store without branches - simplified tax system
• store with high, uninterrupted profits - UTII
• seasonal trade, exhibitions - PSN
• cooperation with legal entities, including VAT – OSNO

Choosing a form of ownership

Forms of ownership for the operation of a furniture company 2 – LLC and individual entrepreneur. To work with orders from commercial organizations, you need to register an LLC, and if you work only with individuals, it is enough to open an individual entrepreneur.

To register a company, you must prepare the following documents:

1. Company name
2. protocol for making a decision on opening
3. information about the director and accountant
4. charter indicating the type of activity and the amount of authorized capital
5. Bank details
6. receipt of payment of state duty

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There are few special requirements for the furniture trade. It will be necessary to conclude agreements with Rospotrebnadzor, Rospozhnadzor and MUP Gorenergo.

Recruitment and registration

To launch the project, a staff of employees is required: a director, sales consultants (the number depends on the area and assortment of the store), a designer, an accountant, and a customer service manager. It is also necessary to conclude agreements with transport companies and cargo carriers.

Employees should be officially registered in accordance with the provisions of the Labor Code of the Russian Federation: sign an employment contract, an order for hiring, create a personal employee card and make an entry in the work book.

The usual markup on furniture is +/- 50%, there are models with a 100% markup or more. During promotions, discounts are set at 20%, 30% and up to 50%. The maximum discount is given in order to quickly sell out stagnant goods and purchase a new collection.

Offers that guarantee personal benefit to the client work well: interest-free installments, a loan at a small interest rate, free delivery, measurement or cashless payment.

Working in the same field, entrepreneurs closely monitor each other. One of the ways to influence the consumer market is dumping - artificially lowering prices. Many companies, in order to survive competitors and capture a niche, put price tags below the cost of goods, thereby causing people to feel “there is deception all around, but these are honest.” But sooner or later the price will have to be raised, people will react negatively and again go looking for something cheaper. How to fight dumping? Become colleagues, not competitors, and negotiate on a contractual basis a system of discounts that will be attractive to customers and provide an opportunity for sellers to earn money.

Selection of premises

The production of upholstered furniture is located in rented premises with a total area of ​​at least 440-450 square meters. m. It will contain:

Workshops:

• carpentry (80 sq. m);
• sewing (35 sq. m);
• upholstery (70 sq. m);
• prefabricated (25 sq. m);
• packaging (25 sq. m).

Warehouse and retail premises:

• Warehouse for components and raw materials (50 sq. m).
• Finished products warehouse (100 sq. m)
• Trade and exhibition hall (70 sq. m).
• Company office premises (30 sq. m).

The estimated rent will be 81,000 rubles per month (with an average price of 1 sq. m – 180 rubles).

Business plan for a furniture store

After conducting marketing research, the entrepreneur creates a business plan, which consists of:

• An organizational plan, which specifies the qualifications of personnel, payment, shares in the project, that is, all information about the management of the company.
• Investment plan to outline the stages of project implementation from design to equipment purchase.
• A marketing plan taking into account long-term prospects for opening a furniture store from scratch.
• A production plan that is relevant for a furniture workshop or factory.
• Financial plan for presentation of financing summaries.

A business plan for a furniture store must be written taking into account the individual characteristics of the enterprise. For example, when selling components, there is no need to specify in detail the motivation of staff. The development of a small enterprise through retail does not require a detailed business plan, but the search for investors in the project - on the contrary. The end point of the business plan should be a risk analysis.

Furniture store location and premises rental

The area of ​​the room depends on the format of the work, for example, work according to the catalog will not take more than 10 sq.m. For an exhibition hall you need from 100 sq. m. The location of the store depends on the target audience. Luxury furniture is sold in the city center. In the residential area there are shops that sell goods through the network. Therefore, the objectives of the advertising campaign and methods of attracting the audience largely depend on the location.

Retail space equipment

The store should have 1-2 samples of each type. The list of standard equipment for a furniture store includes:

• stands with examples of materials;
• stands with choice of product color;
• seller's workplace;
• computer.

If a company is engaged in production, equipment is purchased for the office and workshop. In addition, you need to pay attention to the layout of the room.

Compilation of store assortment

Assortments are compiled after studying price dynamics, analyzing competitors and the sales market. The following types of furniture exist:

• soft;
• case;
• wicker;
• frameless.

In addition, furniture is distinguished by purpose:

• household;
• for commercial purposes;
• office.

In a narrow niche, you can provide a wide choice for the buyer.

Suppliers and transport

Supply issues are a separate issue. It is necessary to describe the materials, indicating methods of transportation and storage. It is necessary to agree with suppliers on measures for quality control and timely delivery. In addition, it is important to highlight alternative sources of raw materials in case of unforeseen situations. The cargo transportation company will provide its services for several hours. Often they cooperate with their base of loaders or the driver himself does the loading for a fee. The master goes with the driver to the client and collects the goods, or a collector is hired.

Staff

Employees must be able to distinguish between materials and know the basics of color to consult a client. If an entrepreneur attracts clients through the network, such requirements are imposed on administrators who communicate with the consumer. It is important to specify the reporting procedure, control, penalties and other points for management class=”aligncenter” width=”1440″ height=”700″[/img]

Website and advertising

Buying a domain, renewing hosting, design, content - all this will be created by web designers and content managers. An entrepreneur can contact a full-service advertising agency, which often collaborates with content studios or has in-house specialists. The advertising agency will conduct a full analysis and offer its options on how to promote a furniture business and increase traffic to Internet pages. Depending on the capital, the agency will provide lists of advertising channels and events. In addition, you can hire a marketer who has sufficient skills to maintain pages, website programming, and targeting.

Enterprise equipment

To ensure the normal operation of the upholstered furniture manufacturing workshop, the following equipment is purchased:

In addition, the company purchases a computer, software for a furniture designer, office furniture and accessories, and consumables. Thus, the initial cost of equipping the workshop will be 300,000 rubles (excluding the cost of renting premises).

Technological process for the production of upholstered furniture

Consider the production of sofas

Let's look at the example of making the most popular and technologically complex representative of the “upholstered furniture” category - a sofa . Unlike armchairs, stools and other furniture, this involves the use of a transforming mechanism that turns the sofa into a bed.

So, all sofas have a common component structure:

• the frame is the main structural element on which the remaining parts of the sofa are attached. It performs the main strength functions during the operation of furniture, and is the basis for fastening other parts when forming the appearance and imparting softness;
• elements of “elasticity” (soft fillers and spring blocks);
• transformation mechanism;
• cover with upholstery fabric.

Manufacturing technology:

1) In the carpentry shop, plywood and boards are cut into wooden blanks , which are then assembled into the frame of future upholstered furniture.

Procurement operations take place in the following stages:

• On a cross-cutting machine, lumber (plywood) is cut to length;
• The plywood is cut to width on a circular saw;
• The resulting part is ground on a four-sided machine, after which a tenoning machine cuts out tenons and eyes in it;
• Using hand-held power tools, internal parts are cut out of boards (fibreboard, chipboard);
• The transformation mechanism is attached (for folding sofas);
• The base frame is assembled.

2) The finished frames are sent to the upholstery shop , where they are covered with foam rubber and sprayed with upholstery material. To begin with, a special non-woven material – darnit – is glued onto a wooden base. This helps to avoid knocks and squeaks during operation of the finished product.

3) Soft elements are installed - spring blocks , which perform an orthopedic function. The blocks are fixed evenly along the entire perimeter and in the central part

Foam rubber is glued around the perimeter of the block , which eliminates the possibility of contact with the solid frame frame

5) Dense woven material is glued , which prevents the overlying layer of cushioning material from abrading the block springs.

6) Spangon, foam rubber or coconut coir are most often used as cushioning material.

Spangon and foam rubber (secondary foam) are a cheaper option, but after a year or two of active use such a sofa begins to “sag” and fail.

Coconut coir is a tougher and more durable material that will last about 7-8 years.

7) After the cushioning material there is another element of softness - foam rubber 40 mm high, density 35-42. It is necessary to install a padding polyester between the foam rubber and the upholstery material, which will allow the foam rubber to “breathe”

The sewing workshop uses equipment to work with any type of finishing - from faux fur to genuine leather. Here the cutting of upholstery fabric for future sofas is carried out, which in the upholstery shop is “targeted” to a multi-layer base.

9) Here they sew covers for certain elements of upholstered furniture (pillows, backrests, armrests, seats). They are “dressed” on a base frame with a glued soft filler - foam rubber, padding polyester.

10) After control assembly and finishing, the product is packaged using polyethylene, cardboard and sent to the finished product warehouse.

Recruitment

To work in a workshop for the production of upholstered furniture, the following specialists are required:

For the main production specialties (designer, upholsterer, carpenter, craftsman), recruitment is carried out according to professional suitability criteria accepted in the industry.

Financial calculations

A financial statement for opening a furniture store is prepared in different ways. You can specify the following information in it:

• Calculation standards: prices, tax amount and payment, terms with a detailed description of the first year, inflation rate.
• General production costs are calculated based on production volume (seasonality) and sales plan. This includes expenses for renting premises, wages, advertising, etc.
• The estimate is drawn up to calculate the total expenses that are needed to implement the business plan.

Depending on the season, sales will fall or rise. It is important to create a graph of variables that will allow you to track the company's financial flows.

Marketing and advertising

The company's marketing policy is aimed at forming the opinion among consumers that the upholstered furniture produced has excellent performance characteristics, has a lower cost than its main competitors, and that the company is ready to consider any options for long-term cooperation with the provision of significant price preferences.

To this end, the following promotional activities are planned:

• Preparation and publication of messages about the enterprise in local media.
• Development of a targeted advertising scheme by sending letters to specialized stores and companies.
• Development of the company’s own website with the ability to order products online.
• Activating consumer demand by developing attractive commercial offers and holding promotions.

The main marketing resource of the enterprise is the high quality of its products, which can be purchased profitably directly from the manufacturer.

Risk analysis and insurance

The main risks for production are both external and internal (within the enterprise) factors.

External:

• High level of competition. It is eliminated by strict control over the release of high-quality products, reduction of selling prices, and the introduction of various discount and promotional systems.
• Lack of demand for your products. The issue is resolved by conducting a well-thought-out and planned advertising campaign.
• Increase in prices for materials and other raw materials. It can be solved by constantly monitoring the pricing policy in the furniture materials market and searching for new partners for supplies.

Internal:

• Low qualification of personnel. It is solved by replacing personnel, increasing interest in work by creating working conditions and developing the infrastructure of the production facility, stable and fair wages.
• Equipment breakdown and downtime. It can be eliminated by introducing regular maintenance and timely repairs.
• Finished product defects. It is reduced by the possibility of selling such products at a low price (including for their employees).
• Low production reputation. It can be solved by changing the entire company policy and replacing the management responsible for operational efficiency.

Financial plan

At the initial stage of the enterprise's activities, it is expected to accept up to 100 orders for furniture production per month. In this case, the maximum cost of the product (sofa) will be:

The current expenses of the enterprise will be:

Taking into account the calculations performed, the total cost of products manufactured in 1 month will be 5788.26 rubles. With a profit rate of 25%, the average cost of products upon sale will reach 7235.33 rubles.

Taking into account the payment of taxes, the workshop will receive a profit for the 1st month of operation in the amount of 115,765.78 rubles. The profitability of the enterprise will be 25%, which will make it possible to recoup the costs of its opening no later than four months from the start of work.

Financial section

The main taxes that are payable in accordance with the tax legislation of the Russian Federation are indicated in the table:

More information about what taxes an individual entrepreneur pays can be found at this link. How to choose a tax form for an LLC, read here. How to combine several tax regimes, see this source.

The estimated payback time for the specified costs and sales volumes will be no more than 2 years.

Cabinet furniture production technology

1. Cutting slab materials.
2. Finishing furniture parts with edges.
3. Assembly and addition of fittings.

If the company plans to work with veneer, MDF boards and solid wood, then it will additionally require jointing and milling machines for processing solid wood, grinding and calibrating grinding machines for processing solid wood and board materials, hot and cold presses for veneering board materials with veneer, a varnishing and painting booth for finishing of finished furniture.

The technological process in this case becomes somewhat more complicated and will include three stages: veneering, sanding and varnishing and painting. Organizing such production is many times more expensive, since more equipment is required. Working with laminated chipboard (laminated chipboard) requires the purchase of expensive packaging equipment, as well as large warehouse premises, since the sales volumes of furniture made of laminated chipboard with the same monthly revenue turnover are several times higher (by 300-400%) than the sales volumes of furniture made of solid wood and slabs MDF. The cost of producing furniture from MDF plywood board is five times higher than producing the same model from laminated chipboard - not so much due to the materials, but due to higher labor costs.

If there are very few funds for the purchase of expensive equipment, then the main part of the production processes, including veneering, can be outsourced to third parties. Although this increases the cost of the final product. Outsourcing is beneficial when a company specializes in the production of cabinet furniture from laminated chipboard according to individual orders, but occasionally they come across clients who want to buy something more expensive and more beautiful, and it’s not an excusable thing to miss such a client. In this case, it makes sense to order semi-finished products externally, and only do the assembly yourself. But only very small “handicraft” workshops work this way.

Profitability of the furniture business

The average profitability of such a salon fluctuates around 20%. According to experts and entrepreneurs, the return on the initial investment comes in about 1.5 years. The annual costs are approximately (the cost is indicated in USD):

• rent (49,000);
• payment to employees (37,000);
• purchase of equipment necessary for operation (28,000);
• transport for transportation and delivery (21,000);
• purchase of fuels and lubricants (11,000);
• computer (2,000).

Advertising also plays an important role in the matter of profitability. An optimal advertising campaign for promotion can pay for itself in the shortest possible time, and in addition, it can also increase sales through an increase in the number of buyers.

Other important expenses

The business idea of ​​furniture production also requires “secondary” expenses, which, however, are no less important. These are primarily the costs of paying staff. Since the company will need 10-11 employees (director, accountant, designer, sales manager, foreman, workers, seamstresses, auxiliary workers), you should be prepared for the fact that their monthly labor will be paid at the level of 160-170 thousand rubles. Another important expense is the cost of raw materials. For one sofa they amount to 3 thousand rubles, but if the enterprise produces up to 100 sofas per month (and this is the optimal level), a minimum of 300 thousand rubles will be needed. Also, the production of upholstered furniture requires:

• advertising – 30 thousand.
• payment for utilities – 3 thousand.
• security and alarm systems – 2 thousand.
• telephone and Internet communications – 3-3.5 thousand.
• payment of taxes – 60 thousand.

Company advertising

An important aspect of the successful development of an enterprise is a well-thought-out advertising strategy. Advertising must be active, because there are quite a lot of competitors in this area in every city. A big advantage will be the creation of a company website where you can order the product you like online.

The company must be known to customers, so advertising will first be aimed at brand recognition, increasing consumer loyalty and stimulating demand.