How to Open a Furniture Store

Are you thinking about opening a furniture store? Have a seat and get comfortable. There's a lot you need to know.

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. Think of your new business venture as a delicate, beautifully crafted piece of furniture. That piece took painstaking craftsmanship and creativity to bring to fruition. Opening your store will be no different.

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1. Talk It Over

Entrepreneurship is a huge commitment. Every successful business comes with a bevy of time and money obligations. Before you begin, sit down with family and loved ones and discuss your plans with them. Make sure that anyone involved in your finances is aware of your intentions.

Consider all outcomes for your business, good and bad. Weigh the positives and negatives so you can proceed with the utmost confidence later.

2. Write a Well-Researched Business Plan

This is where the real work begins. Researching and drafting a business plan should be a comprehensive, exhaustive endeavor. You'll want to leave no stone unturned as you analyze your industry. Become an expert in the furniture business. Read trade blogs about retail shops and outlets and start conceptualizing your brand.

You'll have a lot of freedom in how you want to draft your business plan. Still, here are a few questions that every new store owner will want to consider:

• Are you buying into an already-existing furniture business or starting anew?
• Will your furniture store rent or buy space for your physical location?
• Are you the sole owner or working alongside other owners?
• Which legal business entity structure will you choose when you register with the state?
• How will you finance the opening of your furniture store?
• Who are your competitors, and is there a market demand for your services in your area?
• What services do modern furniture stores provide, and who must you hire to provide them?
• What are you going to name your furniture store?
• How will you market the store?

As you move on to other steps, you will find that many of the decisions that you make here will pay off later. If you're struggling with the format, do not worry. There are plenty of templates online for you to choose from.

3. Acquire Financing for Your Store

Securing financing for your business is one of the more complex and stressful steps of this entire process. You can expect considerable costs with opening a furniture store. In addition to locking down a location, you'll need to fill your store with inventory and showpieces. You'll also need money for delivery trucks, advertising, and salespeople.

Sit down with a representative from a bank of your choice to determine your loan application process. But know this: Even with outside financing, furniture store owners can expect to personally finance up to a quarter of the store's total budget.

4. Register Your Business as a Legal Entity

In Step 2, you conceptualized your business. Step 4 is where you make that business a reality. Everything you've done up to now has led to this point: Where you register your business as a legal entity with a state governmental authority (typically a secretary of state).

The main reason to register your business is that it affords you 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 entity types don't provide the same risk aversion or tax options as corporations or limited liability companies (LLCs).

LLCs are easy to set up and are generally less complicated than corporations, which 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.

5. Get an EIN From the IRS

Obtaining your Employer Identification Number (EIN) from the Internal Revenue Service (IRS) will be the easiest step of this entire journey. And the best part? It's free.

EINs are nine-digit numbers, not unlike Social Security numbers (SSNs). They allow the IRS to recognize your furniture store so you can pay taxes on it. You can apply for your EIN online, by fax, by phone, or by mail. EINs are a necessary part of doing business, and, as you will see, they can be critical to completing the next step.

6. Open a Business Bank Account

Now that you've established your business as a separate legal entity from your personal affairs, it's time to get a business bank account so that you can make transactions. Business bank accounts allow you to track your business's finances and keep your personal assets separate from your company.

Sole proprietorships and single-member LLCs do not technically need an EIN to apply for a bank account because the owners can use their SSNs. But opening one of these bank accounts makes it easier for businesses to obtain credit. It's never too early for your business to start building good credit!

The key takeaway: If you're planning to run a reputable business, you're going to need a business bank account.

7. Apply for All Necessary Permits and Licenses

Every new business must conform to the standards and regulations of the state where they operate. Permits and licenses are how the government allows you to function in this space. Ideally, you will have determined which permits or licenses you'll need when you drafted your business plan. This step is merely putting that plan into action.

Be mindful of this step. You don't want to pay penalty fines or have your business shut down because you weren't diligent at this stage. To determine which licenses and permits will apply to your furniture store, check with the U.S. Small Business Administration's (SBA's) database.

8. Decide Your Store's Location

When you researched your competitors, what did you notice? You might've noticed that well-run furniture stores have great locations. When scouting for sites, these businesses assess:

• Demand in their market for a furniture store
• Their location's proximity to its competitors
• A site in a busy area that is guaranteed to see customer foot traffic, like a strip mall or business park
• Spacious accommodations for your inventory, your showroom, and any offices you'll require

You'll also need to decide if you plan to buy a property or lease commercial real estate. Consider your budget, both internally from your personal assets and externally from the financing you've raised. Choose a location that suits your needs but is still within your budget.

9. Get Yourself Some Business Insurance

Suppose you've found the perfect location with plenty of foot traffic and high demand for your products. On opening day, your first customer walks in, trips, falls and hurts their knee. That is a worst-case scenario! But these are the things you must consider and prepare for.

Having business insurance means your business can still operate, even in the worst of circumstances. A smart business owner will sign up for the following two types of insurance:

• General liability insurance: This is the kind of insurance that will cover you in the slip-and-fall scenario described above. This insurance will protect your business in the event it faces a lawsuit from a customer.
• Workers' compensation insurance: If you intend to hire employees, your state will likely require you to have this kind of insurance. Workers' compensation insurance protects you in case an employee gets hurt on the job.

Think of business insurance as peace of mind for your store. No matter what happens, you're covered. And in a business with so much foot traffic and heavy lifting, you most certainly want to be covered.

10. Establish Your Brand Strategy and Apply for a Trademark

One of the most fun and satisfying steps to opening your furniture store will be when you devise your store's branding strategy. In this step, you get to be creative and envision how your customers will learn about your brand.

There are all kinds of options available to you in this step. Perhaps you want to enlist the services of a graphic designer to craft a logo for your store. Maybe you want to film a television ad with you as the star. Keep your budget in mind, but don't be afraid to get aggressive in your approach. Which channels are the proper channels for you to tell people about this new store?

When you've conceptualized your store's brand and name, you will need to apply for a trademark immediately. This allows you to enforce your right to the brand name in the event someone else misuses it. You can apply for a trademark with the U.S. Patent and Trademark Office (USPTO). The process is lengthy, sometimes taking up to eighteen months from application to approval. For this reason, apply as early as possible!

11. Hire Workers

The business is coming together nicely, but what's missing? Employees! Now that your business is almost ready to open, you'll want to start hiring workers to get all this furniture moving. Here are few roles to consider:

• Warehouse staff to maintain the inventory
• Movers who can drive the moving truck and deliver furniture to customers' homes
• Salespeople to move inventory from your salesfloor

Make a list of all of the tasks that need to be accomplished in your first month of business, and then assess how many hires you will need to make.

12. Open Your Furniture Store

The day has finally arrived! After so much hard work and dedication, you're ready to open your furniture store to the world. Stay on top of everything, and be diligent in how you maintain financial records. Owning a business is challenging, but if you've followed these steps, you should be able to confront any challenges with confidence and knowledge.

Ready to Start Your Business?

New small business owners need every advantage they can get to help their business stand out. When you are ready to start your furniture business, use our simple DIY business formation process to ensure you meet all the legal requirements in your state.

If you have legal questions, FindLaw's database of experienced professionals can put you in touch with a local small business lawyer.

Related Topics

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• How to Find Commercial Property to Rent
• LLCs
• Checklist: Starting a Corporation