Contents

Executive summary.....................................................................................................................1
Business overview...........................................................................................................................1
Purpose of business..........................................................................................................................2
Product description..........................................................................................................................2
IN-SCOPE.......................................................................................................................................2
Product Description.................................................................................................................2
Your USP.........................................................................................................................................3
Sourcing...................................................................................................................................3
Technology..............................................................................................................................4
Market analysis............................................................................................................................4
What is Office & Shop Furniture Manufacturing industry in the UK?.......................6
Office & Shop Furniture Manufacturing in the UK industry statistics.......................6
Market opportunities and risks....................................................................................................6
Opportunities...................................................................................................................................6
Demographic and lifestyle changes are impacting buying habits and preferences..................7
The impact of the growth of renting......................................................................................7
Challenges and Trends Facing Furniture Manufacturers.......................................................7
Trend No. 1: More People Are Renting.............................................................................8
Trend No. 2: Single-Person Households are Increasing................................................8
Trend No. 3: Different Generations Have Different Lifestyles........................................9
Trend No. 4: Online Retailing..............................................................................................9
Risks..............................................................................................................................................10
Threat of Larger Companies and Economies of Scale..............................................................10
Relationships Established by Existing Companies....................................................................10
Advertising and Product Differentiation...................................................................................10
Strategic Barriers.......................................................................................................................11
Target market.............................................................................................................................11
Market Segmentation.............................................................................................................11
Market Needs.........................................................................................................................12
Competitor Analysis..................................................................................................................12
.......................................................................................................................................................13
Main Competitors..................................................................................................................13
Marketing strategy and plan......................................................................................................14
Strategy and Implementation Summary........................................................................................14
Marketing Strategy................................................................................................................15
Strategy Pyramids...............................................................................................................16
Promotion.............................................................................................................................16
Sales Programs.......................................................................................................................17
Sales Plan............................................................................................................................18
Channels..............................................................................................................................18
What is the growth potential for a furniture store?................................................................18
Operations..................................................................................................................................19
IKEA’s business and operating models: a match made in heaven.....................................19
What happens during a typical day at a furniture store?.......................................................21
What are some skills and experiences that will help you build a successful furniture store?
...............................................................................................................................................22
Finding requirements and rationale...........................................................................................22
Financials for first 3 years.........................................................................................................23
Cost: Set up and running cost........................................................................................................23
Sales revenue projection................................................................................................................24
Profit loss account..........................................................................................................................24
Cash flow forecast.........................................................................................................................24
References......................................................................................................................................25

Furniture Business
 Executive summary
Business overview

Upcycling is a process in which used or waste products and materials are

repaired, reused, repurposed, refurbished, upgraded and remanufactured in a
creative way to add value to the compositional elements. It has been part of
human life throughout history, and the past few years have seen its revival,
driven by multiple factors including growing concern for the environment
and resource scarcity. Upcycling increases quality and lifetimes of materials
and products, reduces wastes, creates employment opportunities, and
encourages sustainable consumer behaviour. Despite such benefits and
increasing interest, upcycling is largely considered as a niche practice. One of
the important gaps in the current state of knowledge on upcycling is a lack of
systemic understanding about challenges and success factors relating to
scaling up upcycling businesses. This paper aims to address this gap by
employing a broad range of methods for reaching its goal, including literature
review, stakeholder analysis, semi-structured interviews, group model
building, development of causal loop diagrams, and a workshop with
stakeholders and experts to validate causal loop diagrams and discuss
promising interventions and how to proceed. The results identified potential
actors for the success of upcycling businesses, key challenges and success
factors, causal linkages among the challenges and success factors, key system
mechanisms, and interventions for scaling up upcycling businesses.
Collaboration across the upcycling value chain involving a wide range of actors
is also discussed.

Purpose of business
 Product description

Living-Room & Dining-Room Furniture

Bedroom Furniture
Kitchen Furniture
Plastic & Other Furniture
Office Furniture
Lamps & Lighting
Floor Covering

IN-SCOPE

 Seats and Sofas

 Beds and Mattresses
 Tables and shelves
 Rugs, lamps and lighting
 Other furniture of various materials

Product Description

1. Our main line is the Fulham computer desk in several versions. This is an elegant
piece of office furniture designed to look good in executive office or home office,
and at the same time be ideal for real use of the computer. The two critical elements
of ergonomics--keyboard height and angle and monitor height and angle--are
completely adjustable. Cable runs and shelving add to the utility of the executive
computer, without sacrificing elegance.

2. We also make complementary pieces to fill out the office suite, including file
cabinets, printer stands, and bookcases.

3. We also make custom designs to fit exact measurements.

Your USP
Sourcing

Our Putney location is a distinct advantage for manufacturing. We also have an

established relationship with a high quality lumbar yard to supply the high quality wood
we use to manufacture Fulham Furniture. We can buy higher quality oak and cherry than
either of our competitors. Since our sales increased over the last two years, we have been
able to buy at better prices, because of higher volumes.

We work with one wood supplier. Bambridge supplies most of our oak, and a bit of
cherry and some other specialty woods. Bambridge has been in business for as long as we
have, and has given us good service and good prices. This is a good, stable supplier.
Bambridge works with Duffin Wood Products as a good second source, particularly for
cherry and specialty woods.

We also work with a number of specialty manufacturers for furniture fittings, drawer
accessories, glass, shelving accessories, and related purchases.

Although we aren't a major player compared to the major furniture manufacturers, we are
one of the biggest buyers of the custom materials we need. Most of our suppliers are
selling through channels to hobbyists and carpenters, so they treat us as a major account.

Technology

We depend on our dominance of the latest in technology of ergonomics, combined with

classic design elements of fine furniture. We must remain on top of new technologies in
display, input and output, and communications. For example, our latest models are
 already assuming the desktop digital scanner as a frequent accessory, and audio for use in
creating presentations, email attachments, etc.

Our assembly patents are an important competitive edge. No competitor can match the
way we turn a drawback--having to assemble the product--into a feature. Our customer
surveys confirm that customers take the interlocking assembly system as an enhancement
to the sense of quality.

Market analysis

Nowadays, consumers are replacing their furniture more frequently than in the past, which
is largely due to increasing standards of living and a steady increase in disposable income
across the board. These are some of the factors driving the continuous growth of the
Furniture market. Moreover, aesthetic reasons coupled with the need for consumers to be
comfortable in their apartment, as evidenced by the Living Room and Dining Room segment
being the largest segment of the Furniture market, and the adoption of online shopping are
major contributing factors to the constant growth of the market.

The Furniture market is mostly driven by consumer spending in general. Consumer spending
takes various factors into account; such as per-capita income, household debt levels, and
consumer expectations. The steady increase in disposable income and the consequent rise in
living standards are responsible for the continuous growth of the market, as is the constant
demand for furniture. The growing number of internet and smartphone users has not only
changed consumer behavior, but has also fundamentally changed the sales channels and retail
landscape. The adoption of online shopping by consumers has made furniture one of the fastest
growing markets in that regard.
 Revenue in the Furniture market amounts to US$86,239m in 2020. The market is
expected to grow annually by 0.7% (CAGR 2020-2023).
 In global comparison, most revenue is generated in the United States
(US$261,496m in 2020).
 In relation to total population figures, per person revenues of US$1,270.35 are
generated in 2020
The Furniture market's largest segment is the Living Room and Dining Room Furniture
segment. It includes furniture found in living rooms, parlors, lounges, lobbies and dining rooms.
The segment is especially propelled by consumer’s need for comfort in their homes. In 2018, the
segment’s worldwide revenue amounted to US$435 billion.

The Bedroom Furniture segment includes everyday bedroom items such as beds, mattresses as
well as closets, nightstands and dressers. In the rather conservative Bedroom Furniture market,
innovation comes from retailers focusing on offering comfort and convenience directly to
consumers. The Bedroom Furniture segment accounted for 21% of the Furniture market’s
revenue in 2018.

The growth of the Kitchen Furniture segment is driven by improvements in materials and designs
which are used to provide consumers a wider range of products. Revenues accruing from this
segment reached US$151 billion in 2018; an increase of 3.4% in comparison to 2017.

The growth of the Office Furniture segment is driven by factors such as the development of
innovative products as well as the adoption of modern and high-quality ergonomic furniture by
offices. By 2023, the worldwide Office Furniture segment revenue is forecast to reach
approximately US$133 billion.

The Lamps and Lighting segment accounts for 15% of the Furniture market’s revenue and is
mainly driven by the push for stricter regulations across the globe with regards to more energy-
efficient light sources.

Improved comfort, water resistance and durability of floors, as well as consumers tendency to
buy more expensive goods, are fueling the growth of the Floor Covering segment. Revenues in
the Floor Covering segment amounted to US$146 billion in 2018.

This Plastic and Other Furniture segment includes furniture made of materials other than wood.
The worldwide revenue of US$22 billion in 2018 is expected to increase to US$24 billion by
2023.

The following trends currently shape the market: augmented reality apps, generative designs,
eco-friendly materials, and integrated technology. From 3D-printed furniture to smart lightening,
the Furniture market is experiencing innovations in design, production, and material.

What is Office & Shop Furniture

Manufacturing industry in the UK?
Industry Definition
Operators in this industry manufacture furniture for use in offices, shops and other
public areas. They also manufacture furniture for establishments such as hotels,
restaurants, theatres, cinemas, schools and laboratories. Furniture made from stone,
concrete or ceramic is excluded from the industry.

Office & Shop Furniture Manufacturing in the UK

industry statistics
 Market Size: £2bn
  Number of Businesses: 953
 Average Industry Profit Margin: x.x% 
lock
 Industry Employment: 17,697

Market opportunities and risks

Opportunities

The Furniture Retail Market is a vital part of the wider economy and an important
indicator of trends in the wider consumer retail markets. According
to Marketresearch.com, the global market for furniture and floor coverings is
forecast to reach $695 billion by 2019.1
Demographic and lifestyle changes are impacting buying
habits and preferences
Home office furniture
The growth in home working, not just caused by the ongoing rail disputes, is driving
the demand for home office furniture with a forecast global market growth of 5.58%
between 2014 and 2019.1
Small households
The growth of one and two person households means that there is more demand for
small and easily portable furniture.

 in 1981, 20% of the 20.2 million UK households were single occupancy

 in 2016 there were 27 million households in the UK Of these, 28% consisted of
just one person
The impact of the growth of renting
The same trend away from large, long lasting purchases is fuelled by the shift in
housing tenure. Over the last five years there has been a 28.3% growth in the UK
private rented sector. 2 The typical owner occupier stays in their property for an
average of 13 years 4 compared to a private renter who stays for 17 months 5. It
follows that people with a longer-term view of their housing are more likely to invest
in higher value items than those who anticipate packing their belongings into a van
and squeezing them through an undersized doorway every few years.

Challenges and Trends Facing

Furniture Manufacturers

With the growth of millennial consumers buying furniture, U.S. furniture manufacturers

are moderately optimistic about the steady increase of new furniture sales in the coming
years. The National Association of Realtors forecasts existing-home sales growth of 4%
for the residential property market in 2018, which could, in turn, have a positive
impact on the moderate furniture industry performance.

Overall, the U.S. furniture market is expected to experience growth. The market

registered a 4.5% increase in growth in 2016, placing its overall value at $114 billion. 
Although the first six months of 2017 saw a softened increase of 2.5% in consumer
spending year over year, the U.S. furniture market is anticipated to grow at a
“compound annual growth rate of 2.9% through 2019.”

While the demand for furniture in California and the U.S. have remained strong overall,
California's household furniture manufacturing industry — which has an estimated
revenue of $3 billion — has stagnated over the past five years. This is due, in part, to an
increasing import penetration and high in-state operating costs.

Furniture manufacturers in California and abroad need to be abreast of emerging trends

that are shaping a new furniture industry landscape. The trends focus mainly on the
fundamental shifts in U.S. consumers’ buying preferences due to changing lifestyles.
They can either pose some challenges or open doors to new opportunities.

Trend No. 1: More People Are Renting

According to a new Pew Research Center report, 36.6% of household heads rented
their home in 2016, the highest since 1965. Rising home prices, apprehension from the
burst housing bubble, rising student debts, and the delay of millennials to get married or
start their own families are some of the reasons owning a home is not a priority, as yet,
for some Americans. Additionally, the U.S. consumer goods rent-to-own market, which
includes businesses like Rent-A-Center and Aaron’s Inc., is increasingly growing and is
expected to continue that upward trend through 2020.

The challenge and opportunity: Renters are likely to look for more affordable furniture
options in the same manner as landlords will opt for more cost-effective furnishings for
their home rentals, with a growing number renting their furnishings rather than outright
buying them. A growing trend also is leading toward consumers shopping for smaller
furniture to fit their rental homes or apartments where space may be at a premium. To
turn this challenge into an opportunity, furniture manufacturers may want to add more
items to their inventory of inexpensive, streamlined or multipurpose furniture to suit
these smaller living spaces, as multifunctional furniture is rapidly gaining popularity.

Trend No. 2: Single-Person Households are

Increasing
24% of households in California are single-person households, according to 2016
Statista data. Single-person households are expected to increase over the next 15
years, according to a 2015 article by Deloitte Insights. And smaller households are
opting to live in apartments or smaller homes. This calls for the demand of smaller
homes, an increase in availability of more modular, space-saving and multifunctional
furniture, and furniture for storage.

The Challenge and Opportunity: Furniture manufacturers should take this as both a

challenge and opportunity to create new designs as an addition to their portfolio of
offerings, further promoting their brand.

Trend No. 3: Different Generations Have

Different Lifestyles
The bulk of the furniture market is composed of millennials, generation X, baby
boomers, and seniors. With lower disposable income and higher levels of debt,
millennials tend to delay the decision to start a household — which poses a potential
problem because they represented 37% of the furniture and bedding market in 2014.
They also have different shopping habits (more online-centric) than other generations
and tend to prioritize more sustainable product purchases.

The GenX group, which tends to be more affluent and represented 30% of the market,
have different tastes or needs when it comes to furniture and buying preferences. The
baby boomers and seniors are the settled consumers and they represented 29% and
4% of the market, respectively.

The challenge and opportunity: The generational demographic of consumers calls for

furniture manufacturers to diversify their products to cater to the specific needs of each
group. While this may mean additional investment on new design and innovation, it also
creates new possibilities for additional revenue sources and a motivation to embrace
more sustainable processes and resources.

Trend No. 4: Online Retailing

Online retailing has been around for some time but it will continue to be a preferred
buying channel for millennials in particular. With instant access to catalogs and price
lists, customers have a clearer idea of what they want.

The challenge and opportunity: Online retailers have taken away a good portion of
the market share of brick-and mortar retailers. Not all is lost for store owners if they start
embracing online and mobile technology and deploy them in their physical stores. For
manufacturers, the increase in online shopping means an opportunity to sell to online
retailers that are not limited to a physical geographic area.

Innovation is critical to the future of furniture manufacturing. The steady growth

prospects of U.S. furniture manufacturing have attracted a host of companies to
introduce innovative furniture creations. A quick search on YouTube can result in videos
that show furniture that can be assembled in minutes without tools or multifunctional
furniture that converts or includes hidden storage. And a furniture manufacturer
has designed smart furniture that is able to monitor and record health-related data, such
blood pressure, breathing, heart rate and body temperature.

Risks

People looking to enter the furniture business should consider its several potential barriers.
 Threat of Larger Companies and Economies of Scale

Large furniture companies can make it difficult for smaller furniture businesses to attract customers when they

enter a market. Large companies often are household names, have significant resources for marketing

campaigns and can take advantage of economies of scale, thus decreasing their manufacturing costs and prices

charged to the consumer. As an example, the largest furniture store in the world, IKEA, has the ability to

leverage its size to lower manufacturing costs and provide furniture at low prices.

Relationships Established by Existing Companies

Furniture purchases are often large expenditures where families look for both exceptional quality and value.

National or international chains can take advantage of brand recognition and reputation to attract customers,

making it difficult for new furniture stores to attract a clientele. Furniture stores of any size that have been part

of a community for many years may also pose a similar threat to a new store. Family and neighborhood

connections may have generations of customers returning to the same store.

Advertising and Product Differentiation

Furniture stores that have a unique product or style may do well to open in a market with existing stores.

However, there may be significant costs to advertising and marketing campaigns meant to broadcast the niche

qualities of the store. Robert M. Grant in his book "Contemporary Strategy Analysis" states that late entrants

into a consumer goods market may experience higher costs for advertising and promotion compared with

established or early market entrants. The total approximate cost is over 2 percent of sales revenue.

Strategic Barriers

Strategic barriers are created by existing companies to prevent other businesses from establishing themselves

in the market. These barriers can be difficult for new furniture companies to circumvent. The Organization for

Economic Co-operation and Development cites the creation of exclusive dealing arrangements as one type of

strategic barrier an established company may set up. Creating barriers based upon exclusivity may result in an

anticompetitive environment and make it difficult for a new furniture store to attract business.
 Target market

Market Segmentation

 Corporate executives: our market research indicates about 250,000 potential

customers who are managers in companies of more than 100 employees. The target
customer is going to be at a high executive level, in most cases, because the purchase
price is relatively steep compared to standard office furniture.

 Small business owners: our customer surveys indicate a strong market among the
owners of businesses with fewer than 100 employees. There are 3 million such
businesses in this country, most of them with concentrated ownership that makes the
owners potential customers.

 Home offices: the home office business has proliferated during the 1990s, and we
also have home offices for people employed outside the home. This is a big market,
some 3 million home offices, growing faster than other markets. A home office does
not necessarily imply a home business--just that a homeowner has designated a room
in their home as an office.

 Our segment definition is of itself strategic. We are not intending to satisfy all
users of office furniture intended for use with personal computers, but, rather, only
those who are most demanding. We are definitely out to address the needs of the
high-end buyer, who is willing to pay more for quality.
 In our particular market, we also seek the buyer who appreciates two attributes:
the quality of furniture workmanship and the excellence of design, with an
understanding of technology and ergonomics built in.

Market Needs

We understand that our target market needs more than just office furniture. The need
grew out of the special needs of personal computing, when combined with office
furniture--keyboards at correct height, monitors at correct height, proper channels for
cables, and other amenities. Our target customer wants to have all of that plus fine
furniture. There is a need for quality, reassurance of wood and good workmanship. We
don't just sell office furniture, we sell office environment and design, plus workmanship.

Who is the target market?

Some clients change out their furniture as home fashion changes, ordering
a new sofa every few years.Your return clients will generate the most
income. At the same time, everybody needs to buy beds, so creating a
welcoming environment that appeals to most people is crucial. Colleges
and property maintenance companies will purchase large quantities of
inexpensive furniture on a regular basis.

Competitor Analysis
The report covers major international players operating in the UK Home Furniture Market. In
terms of market share, few of the major players currently dominate the market. However, with
technological advancement and product innovation, mid-size to smaller companies are
increasing their market presence by securing new contracts and by tapping new markets.
The main key player in the Furniture market with regards to market share is the Swedish
company, IKEA. With more than US$45bn, IKEA has by far the highest sales among furniture
companies. However, since eCommerce is further driving the growth of the furniture industry,
Wayfair, one of the largest online-only home goods retailers, has a major potential for its future
business.

Within our niche we have two significant competitors, Devonbrooke Computer Furniture
and ZedNadir Manufacturing. Devonbrooke is a bigger company but like us, operating
mainly in our same niche, whose marketing is better than its product quality. ZedNadir is
a subsidiary of XXX Furniture, a major furniture manufacturer, which has recently
targeted our niche.

In general, however, our competition is not in our niche. We compete against generalised
furniture manufacturers, cheaper computer-related furniture, and the mainstream
merchandise in the major furniture channels and office supply stores. It isn't that people
choose our competitors instead of our product, it is that they choose lesser quality,
mainstream materials instead of the higher quality furniture we offer.

Main Competitors
Devonbrooke Computer Furniture
Devonbrooke has been operating since the middle 1980s, and grew up with computer-
related furniture. It was one of the first, certainly the first we are aware of, to develop
personal computer desks and market through advertising in computer magazines. Today
they are about twice our size. They have a very nicely done catalogue and good
relationships with two distributors.

Strengths: good marketing, strong advertising budget, relationships with distributors,

strong direct sales.
Weaknesses: the product is more standardised, and of lesser quality, with less sense of
design and materials and workmanship.

ZedNadir Manufacturing
ZedNadir Manufacturing is a division of Haines Furniture, the second largest
manufacturer of mainstream home furnishings. Haines bought ZedNadir three years ago
and is focusing on our niche. We see very good quality product, and an excellent sense of
design, but little movement in channels or catalogues.

Strengths: financial backing, product quality.

Weaknesses: ZedNadir has not seemed to understand our niche, where to find the buyers,
how to market as a specialty niche instead of the more traditional furniture channels.

Marketing strategy and plan

Strategy and Implementation Summary

We focus on a special kind of customer, the person who wants very high quality office
furniture customised to work beautifully with modern technology including personal
computers, scanners, internet connections, and other high-tech items. Our customer might
be in larger comanies, small or medium business, or in a home office with or without a
home-office business. What is important to the customer is elegance, fine workmanship,
ease of use, ergonomics, and practicality.

Our marketing strategy assumes that we need to go into specialty channels to address our
target customer's needs. The tie-in with the high-end quality catalogues like XXX is
perfect, because these catalogues cater to our kind of customers. We position as the
highest quality, offering status and prestige levels of purchase.

The product strategy is also based on quality, in this case the intersection of technical
understanding with very high quality woodworking and professional materials, and
workmanship.

Our most important competitive edge is our assembly strategy, which is based on
interlocking wood pieces of such high quality that assembly is not only a pleasure for our
customers, it is actually a feature that enhances the sense of quality

Marketing Strategy

Our product is positioned very carefully: this is high-quality office furniture combining
workmanship and ergonomics for the customer who understands quality, is a user of high
technology equipment, and is willing to spend money on the best. Unlike the mainstream
products, we do not use laminates or cheap manufacturing technology.

Our marketing strategy is based mainly on making the right information available to the
right target customer. We can't afford to sell people on our expensive products, because
most don't have the budget. What we really do is make sure that those who have the
budget and appreciate the product know that it exists, and know where to find it.

The marketing has to convey the sense of quality in every picture, every promotion, and
every publication. We can't afford to appear in second-rate catalogues with poor
illustrations that make the product look less than it is. We also need to leverage our
presence using high-quality catalogues and specialty distributors.

Strategy Pyramids
Our main strategy at Willamette Furniture is to position ourselves at the top of the
quality scale, featuring our combination of superb technology and fine old-fashioned
woodworking, for the buyer who wants the best quality regardless of price.

Tactics underneath that strategy include research and development related to new
designs and new technology, choosing the right channels of distribution, and
communicating our quality position to the market.

Programs are mainly those listed in the milestones table, including new design
programs, new equipment to keep up with design, channel development, channel
marketing programs, our direct sales, and our continued presence in high-end catalog
channels and new presence in the web.

Promotion
Our promotion strategy is based mainly on making the right information available to the
right target customer. We can't afford to sell people on our expensive products, because
most don't have the budget. What we really do is make sure that those who have the
budget and appreciate the product know that it exists, and know where to find it.

The marketing has to convey the sense of quality in every picture, every promotion, and
every publication. We can't afford to appear in second-rate catalogs with poor
illustrations that make the product look less than it is. We also need to leverage our
presence using high-quality catalogs and specialty distributors.

How to promote & market a furniture store

In the early days you will need to focus on drawing new customers into
your beautiful showroom. You will need to saturate your local
market. Get involved in the local Chamber of Commerce, rent out tables at
local fairs, and sign up as a supporter for local charity events. Regular
marketing will involve promoting seasonal items such as outdoor furniture
in the summer, dining sets for the holidays, and office furniture in the fall.
You will need to constantly update your ads and sales.

How to keep customers coming back

Your first customers will come to visit when they think that you will offer a
comfortable and fun shopping experience. It isn't everyday that you buy a
bed, so when you do it should be something of an occasion. They will
come back for the living room set when they received attentive service, a
fair price, timely delivery, and a sense that you valued their business.

Sales Programs

Specific sales programmes:

1. Catalogue sales: develop placement with one additional catalogue catering to the
high-end office executive, paying of course for space and positioning. The budget is
£10,000 for this programme, due March 15, with Jan responsible.

2. Distributor sales: we need to develop at least new distributor, spending for co-
promotion as required, and making direct sales calls. The specific responsibility is
Jan's, and due date is May 15, with a budget of £15,000.

3. Direct sales: we will do a mailing of a new in-house catalogue, developed by the

marketing department, to add to our direct telephone sales. Jan will be responsible,
without a budget or a deadline because the catalogue is a marketing programme.

https://www.bplans.com/uk_furniture_manufacturer_business_plan/financial_plan_fc.php
Sales Plan
Our strategy focuses first on maintaining the identity with the high-end buyer who
appreciates the best available quality, but is also very demanding regarding computer
systems and technology. We've been able to find these customers using a combination
of direct mail catalogs and direct sales to distributors.

For the next year we continue to focus on growing presence in the high-end direct mail
catalog that finds our specialty customer. We will work with Sharper Image and
Broadview more than ever, and we expect to gain position in the major airline catalogs
as well. Specialty retail is a new channel that could become important for us.

Our work with distributors has been promising. We hope to continue the relationship
with distributors selling directly to larger corporations, even though this takes working
capital to support receivables.

Channels
Our past marketing strategy assumes that we need to go into specialty channels to
address our target customer's needs. The tie-in with the high-end quality catalogs like
Sharper Image is perfect, because these catalogs cater to our kind of customers. We
position our products as the highest quality, highest price offering in any channel mix.

By including our products in these high-end catalogs, we were able to successfully

target the specific niche that was our marketing milestone. This has provided the
foundation for a move to internal catalog production. With a higher degree of information
control internally, these catalogs will target the same audience, but will include more
extensive information in terms of quality, examples, testimonials, and information
tailored to past sales experiences.

What is the growth potential for a furniture

store?
The most successful furniture stores don't have unique furniture to sell, but
create a shopping experience and atmosphere that encourages their
shoppers to linger, test, and discover their favorite item among many
options. When you build that unforgettable service experience combined
with reasonable prices, it is possible to expand your furniture store into a
chain.

 Payment Options

At Bill The Carpenter™ Furniture, Inc., Our payment policy is all inclusive because we are
quite aware that different people prefer different payment options as it suits them. Here are
the payment options that will be available in every of our outlets;

 Payment by cash
 Payment via Point of Sale (POS) Machine
 Payment via online bank transfer (online payment portal)
 Payment via Mobile money
 Payment with check from loyal customers

In view of the above, we have chosen banking platforms that will help us achieve our
payment plans without any itches. Our bank account numbers will be made available on our
website and promotional materials to clients who may want to deposit cash or make online
transfer for furniture purchased

Operations

IKEA’s business and operating models: a match made in

heaven

With revenue of over 29 billion euros in 2014, 315 stores in 27 countries,

9,500 product types, and 147,000 employees, IKEA Group is one of Sweden’s
best-known companies. IKEA designs, manufactures, and supplies quality
furniture at low prices to make it accessible to the majority of people. IKEA’s
furniture products are designed to be sleek and minimalist, and manufactured
to be easy to assemble and maintain.

IKEA is a great example of a company that effectively aligns it business model

and operating model. In order to deliver on its customer promise of providing
quality furniture at affordable prices, IKEA relies on its value chain to optimize
its production and overhead costs, as exemplified below:
Product design process:
In order to reach the shop floor, a product must meet four criteria: affordability,
sustainability, good design, and functionality. Interestingly, the design-
planning of any product starts by first setting a price at which a product will be
sold. As part of that, designers have to select which design elements, raw
materials, and production techniques to use in order to reduce production
costs. Furthermore, the designers often work on the factory floor, directly
interacting with the manufacturing team in order to understand the capabilities
and constraints of the manufacturing department, thereby streamlining the
design process and minimizing the cost of the prototyping phase.
In addition to that, IKEA standardizes the production processes by using a
limited selection of raw materials across the product ranges and it uses the
same base design for different products (example: the chairs from the PELLO
series have the same base design as chairs from the POÄNG chairs). This
level of standardization results in lower rates of defect and scrap, therefore
less waste and cost.

Production & Distribution:

IKEA has over 50,000 SKUs; in order to relieve the challenge of product
variability, IKEA relies on extensive forecasting, and usually planning
production five years in advance. Similar to Toyota’s Heijunka practice, IKEA
relies on long-term planning to evenly balance production volumes across its
network of more than 1,000 third-party manufacturers. As we learned in the
TOM course, spreading out production demand allows for suppliers to have a
uniform cycle time which ultimately leads to lower production costs per unit.
Furthermore, with the help of an Advanced Planning and Scheduling software,
IKEA allocates production to suppliers based on each supplier’s production
capacity and raw material availabilities.
After productions, the products are transported to a network of 47 IKEA-
owned, highly-automated distribution centers located in 17 countries. In order
to optimize on warehousing and transportation requirements, the finished
products are tightly packed into flat packages. This type of packages makes
the finished goods easy to transport (leading to decreased transportation
costs) and easy to store (leading to decreased warehousing costs).
Retail:
After customers browse the shop floor and select the items to purchase, they
head to the store’s warehouse to retrieve the packages themselves. Because
the customers are responsible for picking up their packages, IKEA does not
have to hire labor that would otherwise assume such a responsibility. This
helps drive down IKEA’s labor cost.
Consumers play another role in IKEA’s low-cost strategy. Because the
customers are responsible for transporting the furniture out of the store and
assembling it, IKEA further saves on labor, shipping and overhead costs
associated with furniture assembly and delivery.

Overall, I think IKEA effectively manages several key elements of its value
chain from design-process to its retail stores, and it has access to customer’s
demand patterns. With this information flow and control from one end of the
supply to the other, IKEA is able to smoothen the bullwhip effect that other
firms typically experience. This in turn helps IKEA drive operational
efficiencies throughout the supply chain, resulting in reduced costs and lead
times. Given IKEA’s strong financial performance with profit margins of over
11%, I believe that that IKEA’s business and operating models are strongly
aligned with one another.

What happens during a typical day at a furniture

store?
If you operate a furniture store, on any given day you might be expected to:

 Ensure all the furniture displays are spotlessly clean and attractive
 Work with customers to find the right piece of furniture that matches
their style and budget
 Review new collections of furniture and decide which ones your store
will sell during the next season
 Place orders with furniture factories to meet customer orders or to
have "in-stock" for immediate delivery
  Provide a welcoming environment for your shoppers which may
include snacks, coffee, or extra entertainment
 Design new displays for incoming furniture collections
 Offer in-home consultations for customers seeking to develop a
unified design
 Schedule furniture deliveries for customers

What are some skills and experiences that will

help you build a successful furniture store?
The successful furniture store business owner will be able to:

 Select and display popular and beautiful pieces of furniture

 Provide a welcoming and exceptional shopping environment
 Deliver excellent customer service on every single sale
 Train a friendly and knowledgeable sales staff ready to support the
shopping experience
 Maintain a good profit margin through use of good business skills
 Establish positive relationships with a variety of furniture
manufacturers
 Suggest attractive combinations of furniture, carpeting, lighting, and
other design elements for a more personalized experience

Finding requirements and rationale

 Financials for first 3 years

Cost: Set up and running cost

how much does it cost to start a waste and recycling company?

Depending on what area you are going into, start-up costs for waste and recycling can vary.
According to Colin of Green Works, it has become more expensive of late – possibly as a
result of the drop in commodity prices:
“Startup costs were initially very low, and there was relatively easy access. Those costs have
risen quite considerably, but it's still not as expensive as the cost of entry into other forms of
business like financial services for instance – because the quality of the staff you need is
quite different.”
There's a degree of investment, and just how great this investment is may depend on your
focus; i.e. whether you'll need space for storage or a workshop; machinery for processing or
manufacturing; a fleet of vehicles; or skilled staff.
If you require a large square-footage for a warehouse most of your money will go into
premises.
A vehicle fleet can cost a lot too, depending on what kind of product you're picking up, and
exactly what model you go for. Trucks can vary from £30,000 to £10,000, to just a few
hundred in the waste business, depending on your specification.
You also need to factor in costs for applying for planning consent, licensing your service and
your fleet.
Remember however that you can subcontract out a lot of these things: you don't necessarily
have to have a fleet, machinery and premises yourself, particularly when first starting out.
What are the costs involved in opening a furniture
store?
Your largest costs for opening a start-up furniture store will be invested in
the store front and your display inventory. In order to create the most
attractive displays, you need at least 50,000 square feet. You may need a
large warehouse in order to deliver furniture in a timely manner to your
customers. Your store should be centrally located in order to provide the
most convenient service to as many people as possible. Design
consultants will garner the highest salaries. Expect to invest between $1
million and $20 million depending on the size and complexity of your
furniture store showroom and warehouse.

What are the ongoing expenses for a furniture

store?
Payroll will be a significant part of daily expenses for your sales, design,
and delivery crews. You will change out your displays twice a year, and
that will be a major line item on your annual budget, but some of those
pieces can be sold as-is at a later date. You will need to keep some
inventory in your warehouse, but most items ship straight from the factory
to your customers' homes.

How does a furniture store make money?

You will generate income by selling a large quantity of furniture to as many
people as possible. You buy the furniture from factories at wholesale prices
and sell at a higher price, netting a profit.
How much can you charge customers?
Bargain furniture can be priced starting at $50 for an end table. Custom
orders of silk upholstered sofas and mahogany dining sets climb
up to $10,000. Mid-line pieces tend to average between $1,000 and
$2,000.

How much profit can a furniture store make?

While your furniture store can bring in well over $1 million in annual sales,
the furniture industry boasts one of the smallest profit margins in the retail
industry. Your profit over wholesale will be about 40%. However, most
stores anticipate a 2% net profit after operating expenses and payroll is
covered. As the business owner, you may enjoy an annual income of
between $150,000 and $300,000.

Sales revenue projection

Profit loss account

Cash flow forecast

References

https://www.thoughtshift.co.uk/furniture-retail-market-trends-and-statistics/
https://mordorintelligence.com/industry-reports/uk-home-furniture-market
https://www.ibisworld.com/united-kingdom/market-research-reports/office-shop-furniture-
manufacturing-industry/
https://smallbusiness.chron.com/risk-entry-furniture-industry-33458.html
https://www.sciencedirect.com/science/article/pii/S0921344919303349#sec0065
https://www.bhf.org.uk/what-we-do/news-from-the-bhf/news-archive/2019/october/uk-adults-
wasting-furniture