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How To Open a Furniture Store

Furniture Store Shoppers

If you're considering opening a furniture store business, there's much to consider. The furniture market is competitive, and launching a business that can survive is challenging.

Whether you plan to offer your customers affordable pieces or top-of-the-line luxury, opening a furniture store takes time, dedication, and a solid plan. You'll also need to address several legal and regulatory requirements.

This article will guide you through the process of opening your own furniture store. The following business planning and legal steps will help you lay the foundation for a successful and compliant business.

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1. Evaluate Your Business Idea

Entrepreneurship is a huge commitment. Every successful business comes with a significant time and financial obligation. Before you begin, sit down with family and loved ones and discuss your plans. Ensure everyone involved with your finances is aware of your potential business venture.

Starting any type of business involves financial risk. Your income stream may be inconsistent, or you could lose money, especially at first. One of the most critical things to consider is whether you can afford to take that risk. If so, also ask yourself:

  • Do your experience, skills, and motivation support a successful business?
  • Does your target market need a furniture store?
  • Can you get the supplies, staff, and support you need to be successful?
  • Is the competition manageable?
  • Does your furniture store have the potential to be a profitable business?

These questions can help you assess your business idea and prepare for the realities of entrepreneurship. You'll also address some of these questions in detail in your furniture store's business plan.

If you decide to pursue your idea, you can proceed confidently through the next steps.

2. Write a Well-Researched Business Plan

Researching and drafting your business plan will likely be the most exhaustive part of your small business process. You'll want to analyze the furniture industry and become an expert in the business. Read trade blogs about retail shops and outlets and start conceptualizing your brand.

You'll have some space for creativity in how you draft your business plan. Still, there are several questions every small business plan should address:

  • Are you buying a franchise, taking over an existing business, or starting your own store from scratch?
  • Will your furniture store rent or buy space for your physical location?
  • Are you the sole owner or working with other owners?
  • Which business structure will you choose when registering with the state?
  • How will you finance your startup costs?
  • Who are your competitors, and is there a demand for your services in your market?
  • What types of furniture, products, and services will your store offer, and who must you hire to provide them?
  • What is the business name for your furniture store?
  • How will you market and promote your store?

Another crucial part of your business plan research is determining your niche. Furniture stores typically operate in a competitive business landscape. So, it's important to establish what sets your store apart. Some examples include:

  • Multifunctional pieces efficient for small spaces
  • Sustainable and eco-friendly furniture
  • Furniture rental
  • Custom, made-to-order furniture or woodworking
  • Home-compatible or “smart" home furnishings
  • Discount furniture with lower price points

Be as detailed as possible. Much of your work in this stage will inform later steps of your business formation.

If you're struggling with your business plan, help is available. Online templates can help you with your planning. The U.S. Small Business Administration (SBA) also offers low-cost and no-cost business counseling to eligible small business owners.

3. Get Financing for Your Store

Opening a furniture store can be costly. In addition to locking down a location, you'll need to stock your store with inventory and showpieces. You'll also need capital for delivery trucks, advertising, and staffing. If you hire professional help, like an accountant or business attorney, you'll also need to factor in professional fees.

Even with outside financing, furniture store owners can expect to personally finance up to a quarter of the store's total budget.

thorough business plan is essential when approaching lenders and investors. Be prepared to speak confidently about your plans' contents, especially the sections on:

  • Profit margins
  • Financial projections
  • Market analysis

Even with business loans and investments, you may need to access funds to cover everyday operational expenses, especially in the beginning. If you take out a commercial credit card, carefully research several cards' terms and benefits. A commercial line of credit can also help build your business credit.

4. Register Your Business as a Legal Entity

Next, register your furniture store as a legal business entity with your state's corporations office, typically a secretary of state.

Registering your business affords a greater level of legal protection. When a business doesn't register with a state, the law views those businesses as sole proprietorships with a single owner or general partnerships with multiple owners. These default entities don't provide the same risk aversion or tax options as corporations or limited liability companies (LLCs).

LLCs are easier to set up and generally less complicated than corporations. Corporations tend to be larger entities with multiple shareholders. Both entity types protect owners' personal assets from any debts or claims against the company. They also allow the owners to decide how they want to be taxed.

For these reasons, new business owners tend to opt for the safety and security of LLCs or corporations. If you're unsure, an experienced business attorney can help you determine the best type of legal entity for your business model.

5. Get an EIN From the IRS

You will need a federal Employer Identification Number (EIN) from the Internal Revenue Service (IRS). EINs are nine-digit numbers the IRS uses for identification and tax purposes. It's like a social security number for your business. You will need your EIN before you can open a business bank account and hire employees.

The IRS does not charge a fee for an EIN. Apply on the IRS website to get your EIN instantly and at no charge. Watch out for commercial sites that charge a fee for an EIN—many of them look like the official IRS website.

6. Open a Business Bank Account

Once you've established your business as a separate legal entity and gotten your EIN, open a business bank account to make transactions. Business bank accounts allow you to track your business's finances and keep your personal assets separate from your company. Avoiding commingling funds simplifies your recordkeeping and makes it easier for you to accurately track business expenses and cash flow.

A separate bank account also further protects your personal assets from your store's liabilities and adds credibility to your business.

7. Obtain the Necessary Business Licenses and Permits

Your new business must conform to the rules of the state where it operates. You may also have local regulations your business must adhere to. Your location and scope of business will determine the specific permits and licenses you may need. But your store will likely need:

  • Sales tax permit
  • Zoning and land use permit
  • Certificate of occupancy
  • Sign permit
  • Builders' permit, if you have to perform renovations on your commercial space

Ideally, you already identified necessary permits or licenses when you drafted your business plan. Now, you just have to apply for and secure them.

Contact your local business licensing authority to see what licenses and permits your store needs. Failure to follow your jurisdiction's regulations can lead to penalties with steep fines. You even risk your local or state government shutting down your business.

8. Decide Your Store's Location

When you researched your competitors, what did you notice? You might have noticed that well-run furniture stores have great locations. When scouting for storefronts, you should assess the following:

  • Market demand for a furniture store
  • Location's proximity to its competitors
  • Potential for guaranteed customer foot traffic, like a strip mall or business park
  • Spacious accommodations for your inventory, showroom, and office space

It's also an option to forego a brick-and-mortar retail store and run an online business instead. This will still require securing commercial space to store and ship inventory. If you operate your business solely online, integrate e-commerce strategies that empower customers to purchase without seeing the products in person. This can include:

  • Virtual showrooms and consultations
  • Live chat and customer service
  • 360-degree product viewers and augmented reality (AR) technology

You'll also need to decide whether to buy or lease commercial real estate. Consider your budget, including your personal investments and outside financing. Choose a location that suits your business needs but is within your budget.

9. Get Adequate Business Insurance

Having business insurance means your business can still operate even in the worst of circumstances. At a minimum, your furniture store should carry the following insurance:

  • General liability insurance protects your business from property damage, theft, personal injury liability, and other unexpected events. For example, you'll be protected if a customer slips and falls in your showroom and sues your store.
  • Workers' compensation insurance is required in most states if you hire employees. Workers' compensation protects you if an employee is hurt on the job.

You may want to get additional policies for your store. Consider your business's unique risks and potential liabilities when determining adequate insurance coverage. An insurance broker or business attorney can also recommend appropriate coverage.

10. Establish Your Branding and Marketing Strategy

Building your store's branding and marketing strategy is an opportunity to flex your ingenuity and creativity. You will envision how potential customers will learn about your brand during this process.

There are several options to market and promote your store, and you may have to adjust your plan. Use your target market research from your business plan to inform which channels and strategies you'll use to reach your audience. Some ideas include:

  • Hiring a graphic designer to craft a branding package for your store, including a logo
  • Filming a television commercial
  • Contacting local news outlets for publicity coverage
  • Creating an online presence with a user-friendly website and engaging social media profiles
  • Traditional channels like direct mail and print advertisements
  • Search engine optimization (SEO), email marketing, and text marketing
  • Grassroots efforts (getting involved in your community and local market)
  • Partnering with other entrepreneurs, like interior designers and cleaning companies

Word-of-mouth is still an effective marketing method. Consider offering a referral program to incentivize customers to tell others about your store. You can also reward shoppers with discounts or other perks for leaving reviews on platforms like Google and Yelp.

Review advertising laws that may affect your marketing plan, like website legal requirements. You must also use certain disclosures when advertising online.

12. Apply for a Trademark

When you've conceptualized your store's brand and name, you should apply for a trademark. This allows you to enforce your intellectual property rights in the event of infringement.

You can apply for a federal trademark with the U.S. Patent and Trademark Office (USPTO). The process is lengthy, sometimes taking up to 18 months from application to approval. You can also apply for a trademark at the state level, although this isn't always necessary if you have a federal trademark.

12. Review Employment Laws and Hire Employees

You'll likely need to hire several employees to help with day-to-day operations. The specific number you'll need depends on your business size, budget, and scope of operations. A few of the roles you may need to hire for include:

  • Warehouse staff to maintain inventory
  • Movers and delivery drivers
  • Sales associates to help customers find the right pieces of furniture
  • Store manager
  • Logistics coordinator
  • Maintenance and janitorial staff
  • Visual designer or stager

If you're launching an online-only business, you will need other roles like phone and chat agents and order fulfillment staff. Post available positions with well-written job descriptions on online job boards like Indeed, ZipRecruiter, and LinkedIn.

Hiring and employing staff comes with legal responsibilities. Review local, state, and federal hiring and employment laws before you start sourcing talent. For example:

  • Certain questions are illegal to ask in an interview
  • Employing minors comes with additional regulations
  • Employers must verify each employee's identity and eligibility to work in the U.S.
  • Employers cannot discriminate based on race, color, religion, gender or gender preference, or national origin

You may want to perform background checks on every hire. This is especially true for those who deliver to customers' homes or have access to financial and payment information.

You can also use FindLaw's Employment Law Resources section for more information on hiring and employment laws.

13. Open Your Furniture Store

After much hard work and dedication, you're ready to open your furniture store. Consider a grand opening party to celebrate your new business with your customers.

Owning a business is challenging. Be diligent in maintaining financial records and get help when needed. Even the most experienced business owners need professional support or guidance at times.

Ready To Start Your New Furniture Store? Get Legal Help

New small business owners need every possible advantage to help their business succeed. Launching and operating your own business is complex. You'll have to juggle business planning, operations, legal considerations, and more. Some entrepreneurs can do this independently, and some benefit from legal help.

Contact a local small business attorney to see how they can help and support your furniture store venture. An experienced attorney can advise you on how to structure your business, licensing, intellectual property, employment laws, and more. This can give you clarity and peace of mind to focus on the day-of-day of starting and running your business.

Another option is FindLaw's simple DIY business formation process. This online tool will guide you through the process and help ensure you meet all necessary legal requirements.

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