Entrepreneurs Open an upholstery shop

The rising cost of life today has caused many people to implement various measures to get
the most out of their assets. To this end, in the case of furniture, a very popular practice is
upholstery, through which its useful life is prolonged. The direct consequence is an increase
in the profitability of companies in such a field, therefore, below we offer you a basic guide
so that you can take advantage of such an opportunity and start your own company.

The fundamental tool to start a company is to prepare a Business Plan, with which you can
measure the viability of your project and guarantee its success. Its basic components are:

1. MARKET STUDY. It will allow you to know the needs of your future clients, their
consumption habits and the competition. The study considers a:

- Analysis of the offer. Identify how many similar businesses exist in the area, as well as
the characteristics they have.

- Analysis of demand. It allows you to know potential clients to establish the services that
should be offered.

- Price analysis. Compare competitor prices.

To complement this research, you can carry out a SWOT diagnosis, through which you will
know the strengths, weaknesses, opportunities and threats that your company will face,
providing you with valuable support in decision making.

2. LOCATION AND FACILITIES. Make sure your location is located in a place with
regular traffic, also considering that the community or market segment you want to serve is
located there.

For a microbusiness in this field, the optimal size of the establishment should be a
minimum of 50 m2, in which you can establish the following areas:

• Raw material and tools warehouse

• Furniture warehouse

• Finished product warehouse

• Cutting, sewing and finishing area

• Office

• Bathroom
3. TEAM. For your business to operate smoothly, you will need the following furniture,
machinery and equipment:

• Sewing machine

• Air stapler and equipment

• Foam rubber cutter

• Hermmex type die-cutter – 2

• Carpenter's hammer (3)

• Manual electric drill (1)

• Table (3)

• Banks (6)

• Upholstery hammer (3)

• Scissors (3)

• Saw (1)

• Berbiquí (1)

• Meter (3)

• Scale (3)

• Squads (3)

• Plumb line (1)

• Screwdriver set (3)

• Mechanical clamps (3)

• Nail pliers (3)

• Office team

4. SUPPLIERS. Make sure that your supplier can supply you with the products you require
on the date, quality, quantity and conditions necessary for the correct operation of your
business. To acquire the machinery, you can mainly use the directories of:
• National Chamber of Commerce, Services and Tourism.

• National Chamber of the Processing Industry.

• Yellow Section Telephone.

Additionally, you can consult the Mexican Business Information System (SIEM) via the
Internet.

5. STAFF. To start operations, you need to hire the following personnel:

• General Director: as supervisor, in charge of production, process control, administration,

finance and marketing.

• Operational Personnel (3): to carry out the production process.

• Auxiliary Personnel (3): supports the production process.

• Administrative Assistant: payroll manager.

• Production Supervisor: monitor the process.

6. PROVISION OF THE SERVICE. The main upholstery services that you need to offer to
the public are:

• In home furniture: chairs, living rooms and sofa beds.

• In offices: chairs and armchairs.

• In automobiles: awnings and interiors.

• In houses: walls and ceilings.

Your services must be characterized by:

• Provide clients with fixtures, floors and walls that look elegant and clean.

• Restore and remodel utility and comfort functions of furniture and accessories.

• Print a touch of artistic harmony in terms of colors and shapes in furniture, accessories,
floors and walls.

It is recommended that operations in a company of this type be carried out between 8:00
a.m. and 4:00 p.m.
7. CORPORATE IMAGE. This will constitute the cover letter of your company, so you
must:

• Choose a descriptive, original, attractive, clear and simple name.

• Design a logo representative of the business.

• Apply the image on the company's premises: place an advertisement that identifies its
location, paint it with the chosen colors, display the logo, etc.

• Develop the mission, vision, values, etc.

It will also be necessary for you to apply this corporate image when promoting your
company.

8. INNOVATION. To improve the penetration of your business in the market, you can
apply one or more of the following strategies:

• Provide high quality service.

• Provide adequate customer service.

• Extreme punctuality.

• Establish competitive prices.

• Set up some promotions.

9. LEGAL FRAMEWORK. Below we offer you some of the procedures you must carry
out to set up your upholstery business in Mexico City. All of them are subject to
modifications ordered by the corresponding authorities:

• Constitution of companies before the SER.

• Notice of use of permits for the incorporation of companies or change of name or

company name.

• Public registry of property and commerce.

• Registration in the RFC / tax ID.

• Zoning certification for specific use.

• Land use license.

• Business registration with the IMSS and Infonavit.

• Opening statement.

• Advertising license.

• Registration of fixed sources and wastewater discharge.

• Constitution of the joint training and training commission.

• Notice of statistical manifestation.

• Safety and operation approval.

• Internal civil protection program.

• Minutes of integration into the safety and hygiene commission in the workplace.

• Approval of training and training plans and programs.

• Registration in the payroll tax register.

• Registration in the Mexican business information system (SIEM).

Assemble an Upholstery
Business plan. Assemble an Upholstery

1.- THE BUSINESS IDEA.

Our immediate objective is to set up a company dedicated to the restoration and

manufacturing of upholstered furniture.

The upholsterer is the person whose job is to weave tapestries, upholster furniture, chairs,
sofas, etc., or sell carpets, curtains and other decorative elements. This work can be carried
out by hand or industrially.

2.- IDENTIFICATION OF ENTREPRENEURS

This project is ideal for those people who have knowledge in the upholstery sector; That is,
they have received adequate professional training and have sufficient work experience.

Furthermore, it is recommended that the person who is going to embark on this type of
business enjoys advanced notions and skills in the world of decoration.

3.- DESCRIPTION OF THE PRODUCT-SERVICE/MARKET

• THE PRODUCT OR SERVICE:

The main activities that businesses dedicated to upholstery usually carry out can be
divided into two:

1. Manufacturing: It involves making all types of upholstered furniture; sofas, armchairs,

chairs, headboards, etc. both in models with standardized measurements and in special
measurements. Additionally, the customer should be given the opportunity to choose from a
wide range of fabrics. It is, therefore, a meticulous work of artisanal manufacturing.

To achieve this goal, you must have a team of craftsmen with extensive experience (chair
makers, upholsterers and varnishers), who deal with the different phases of the furniture
manufacturing process.

In this sense, we are going to assume for this business that this activity begins to develop
once the business has established itself since the investment involved in carrying it out is
much greater. Therefore, at first, this manufacturing activity will be subcontracted.

2. Restoration: It involves the repair of upholstered furniture, either rehabilitating any

problem that the upholstery has, or directly changing it for a new one, which is called
reupholstering. This process is carried out with the same techniques used in the past, that is,
webbing and springs are restored, the burlap is changed, the horsehair is replaced and it is
upholstered with different types of fabric, carried out by professional artisans who carry out
the operations. manually.

In addition, a home pick-up and delivery service for the work must be available, so that the
client does not have to worry about transportation. In addition to these three main lines of
activity, the business must provide the possibility of formalizing free, no-obligation
estimates, as well as carrying out (minor) work at the client's home, when this is possible.

Once the business grows, you can choose to diversify the business and include decoration
among the company's services, based on custom clothing. In this sense, the client would be
offered personalized project advice and a subsequent budget that would include everything
the client needs to know (taking measurements, preparation, installation, delivery times,
etc.) to make the decoration a reality. of your space (homes, offices, offices, hotels,
residences, etc.). Likewise, the client must have a wide variety of fabrics to choose from,
either in catalogs and samples where the client can differentiate different types of clothing:
blinds, mattresses, stretcher skirts, covers, etc.
• THE MARKET

In Spain, around 68% of furniture consumption goes to home furnishings.

Spanish families spend an average of about 400 euros on furniture per year. This per capita
consumption of furniture in Spain, although it has improved, is still low compared to the
community average.

According to sector data, the purchase of furniture renovation accounts for 56.5% of
expenditure and the remaining 43.5% corresponds to first purchases.

In the upholstery and decoration sector, thematic fairs dedicated to this market segment
take on special importance. Thus, the Decosit fair in Brussels is the main event in the
upholstery and decoration sector and attracts the main global buyers of the product.

According to data extracted from the Spanish Institute of Foreign Trade (ICEX), statistics
on the final sale of products decorated with upholstery, in first place are contemporary style
upholstery. They are preceded by products based on traditional designs, which group the
French, Country and Italian styles, representing 23% of the upholstery. Next is the
traditional Victorian genre, and in fourth place is the style based on the eighteenth century.

Upholstery in the furniture sector in the United States has always been considered a
traditional style market. However, the data reveal that trends have changed in recent years,
giving way to more modern fabrics, a trend that is reaching our country.

Regarding the way of competing within the sector and facing Large Retail (large
specialized stores, hypermarkets, specialized discount stores, groups of buyers, etc.), the
most recent trends consisting of the search and maintenance of the quality of products by
the artisan trade as a strategic weapon to achieve differentiation within this sector.

• THE CUSTOMERS

The client to whom this business is directed does not have a defined profile since it can be,
from a person who wants to upholster old armchairs, to young people who are going to
settle in a new apartment and are going to decorate it, that is, any person who want or need
to make an investment in the decoration of your home.

Furthermore, it is not only individuals who demand upholstered furniture, but within the
sector other types of clients stand out, such as hotel facilities, nightclubs and closed public
spaces in general.

It is also possible to count as clients with distribution and sales companies of furniture or
decoration products, which carry out a specific order or series of furniture upholstery, for
subsequent sale in the store.

• THE COMPETITION
In the analysis of the competition, we can highlight:

 Upholstery and restoration companies like the one shown in this project.
 Companies that group together in the same business all the services necessary for
the development of a project and its materialization.
 Furniture companies, which offer designer and already upholstered products.
 Another group of competitors, such as large stores, department stores, etc. which
have departments of furniture, fabrics and other decorative items.

They will also be competition, although not direct:

 Fabric stores for curtains, duvets, upholstery, etc.

 Furniture factories with sales to the general public.
 Antique stores will also be competition, although they are aimed at a more exclusive
audience.

• SALES PLAN

When you are in a position to start the upholstery business, all you need to do is offer the
services. In principle, it begins with orders from family, friends and acquaintances. The
best propaganda is “word of mouth”. If you work with quality and with reasonable prices,
clients will soon begin to multiply.

When a client is satisfied, we can give company cards so that they can recommend the
service to those acquaintances and family members they know and who may need to use
our services.

The service provided to the client is essential for the clientele to become established. Here,
knowing how to collect the client's expectations in a budget is especially relevant, with an
outline of the work to be done, the amount it amounts to, payment method (50% at the
beginning and 50% at the end) and delivery time.

More profitable than advertising in the media or mailboxing may be attendance at a

specialized fair in the sector or agreements with furniture establishments. These are
inexhaustible sources of clientele.

New technologies must represent one of the main forms of promotion. The Internet is an
access source of information for any potential buyer or client. Having your own website
provides many advantages: it works as a business card and means of contact for clients, it
advertises you in the market, and you can even sell your products through this medium.

In these upholstery businesses, a common form of communication has been, especially in

small municipalities, for the company itself, through the transport element, to advertise
with a loudspeaker installed in it, through the streets of the town. .

4.- LOCATION
In this section you must indicate:

The location of the company: municipality, area (indicating whether it will be located
in an industrial estate, shopping center...)

The proximity of the company to communication routes. It is advisable to attach a

map or plan of the area, where you can see the location of the company

Municipal or regional policies to support the installation of new companies.

The existing supplies and services in the area.

The possibility of sourcing raw materials and other products in the area. The
possibilities of subcontracting services or jobs with other companies.

5.- ORGANIZATION PLAN AND HUMAN RESOURCES

This type of business is usually run by the same entrepreneur, that is, they are set up by
people who know the world of upholstery closely.

The main tasks that the entrepreneur must assume will be:

 Production and restoration tasks : To carry out these tasks, knowledge of the
upholstery technique is needed as well as the handling of the machinery and tools
necessary for the development of the activities.
 Business management : This type of knowledge (accounting, taxes...) can be
outsourced to an external consultancy if the entrepreneur does not have it.

The person will be registered in the Special Regime for Self-Employed Workers of Social
Security. If the business evolves favorably, an apprentice could be hired to get started in
upholstery and help meet the growing demand.

6.- ECONOMIC-FINANCIAL PLAN I. INVESTMENTS AND FINANCING.

For the development of the activity, the following INVESTMENTS will be necessary:

Location of Facilities.

The upholstery business does not have major location constraints so it is perfectly
transferable to any geographical area. It is not necessary for the premises to be located in an
area with a large amount of public traffic, so it will be easier to find a rent that is not too
high. However, location in neighborhoods with high population density is recommended.
In any case, to analyze the convenience or not of locating the business in a certain area, it is
necessary to do a prior market study to determine if the clients that will be under the area of
influence of the company and the existing competition in this area make The location or not
of the business in that area is advisable.

Facility Characteristics

For this type of business it is necessary to have a premises that has a minimum area of
about 60 m2 divided as follows:

 Office- Client Reception : Where clients who request an arrangement or estimate

are served with an area of 10 m2.
 Workshop : Where the upholstery restoration process is carried out, with an area of
40 m2.
 Warehouse : Both raw materials (fabrics, stock, etc.) and auxiliary materials (tips,
screws, staples, glues, cardboard, etc.) are stored, with an area of 5 m2.
 Toilets and changing room area : with an area of 5 m2.

In addition to the above, the premises must have a municipal opening license and meet the
hygienic, acoustic, habitability and safety conditions required by current legislation.

Local Conditioning Costs

This includes concepts related to:

External conditioning : Signs, windows, closures, etc.

Internal conditioning :

The premises must be adapted so that it is in conditions for use. Furthermore, the law
requires the incorporation of a toilet for personal use. To condition the premises, a series of
works will have to be carried out that will depend on the state in which it is located. In this
way, the construction license, the work and the costs of the project will also incur a cost
when starting the activity.

These costs can be around €7,656.00 (VAT included) although this figure varies greatly
depending on the state in which the premises are located. In this way, the previous amount
can be greatly reduced if the premises have already been previously conditioned.

equipment

The most advisable option is to acquire the machinery that is essential when starting the
activity or second-hand, and later, as the business consolidates, gradually incorporate new
elements and machinery that allow for more efficient production and a greater number of
products. .
The necessary machinery is the following:

 Cutting machines.
 Manual machine for punching stencil silhouettes.
 Vertical foam or wadding cutting saw: fixed.
 Sewing machines.
 Electric serger.
 Glue application booth.
 Manual pincer stapling machines.
 Combined button covering machine.
 Portable drilling/screwing machines.
 Spring cutting shear to size.
 Leather and fabric marking table.

The equipment and machinery necessary to carry out the activity in the upholstery, amounts
to a cost of €11,136.00 (VAT included).

Informatic team

For this type of business it is advisable to have a computer equipment with software for
business management, printer and fax. The cost of this computer equipment is at least
€1,650.00 plus €264.00 in VAT.

Utensils

To begin the activity it will be necessary to purchase basic tools, although later and
depending on the needs of the different jobs, other more specific tools will be acquired.

 Tools and equipment : Cutting templates, hangers, scissors, tweezers, staplers,

pliers, sewing machine needles, paint brushes, hammers, spatulas, nail removers,
catufos, straight and curved basting needles, measuring tapes, zipper applicator,
rasp, saws, blades, etc.
 Protective elements : In the development of the work, the necessary means of
occupational health and safety will be used and the legal regulations in this regard
will be observed.

The overall cost of the tools, fixtures and protective elements has been estimated at
€3,132.00 (VAT included).

Initial Stock and Consumption Materials

The first purchase of consumer materials, according to companies specialized in the sector,
will have to include: pencils, tailor's soap, upholstery and leather, auxiliary fabrics,
cardboard, foam boards and blocks, sewing threads, zippers, rolls of tape, buttons ,
lubricants, wooden and metal frames, springs and straps, glues, solvents, staples, nails,
screws, locks. We will acquire the fabrics according to the specific work to be done, for
which we must have a sample book that we will show to the clients.

The cost of this purchase amounts to 2436 euros

Establishment and start-up expenses

Included here are the amounts that must be disbursed to establish the business. Among
these amounts are: Technical project, City Council fees (opening license); contracting
electricity, water and telephone registration; notarial, administrative and other
documentation expenses necessary to start the activity.

These establishment and start-up costs, in the case of starting the business as a self-
employed person, will be approximately €2,204.00 (VAT included). This amount varies
greatly from one case to another as it will depend on the cost of the technical project, etc.
Furthermore, it will increase if it is decided to create a company.

Bails:

It is common to request a rental guarantee or deposit equivalent to two months' rent for the
premises, which can be around €1,560.00 (this cost will depend greatly on the conditions of
the premises and especially its location). .

Other Investments

For this business it is advisable to have a van that allows the transport of unupholstered
furniture to the establishment and once upholstered to the customer's home. This will also
mean added value for our business, thus differentiating us from competitors who do not
provide this service.

The cost of this element will depend on the characteristics of the vehicle chosen. In this
study we propose the purchase of a commercial vehicle with an approximate cost of
17,400.00 (VAT included).

It is necessary to highlight at this point the existence of a second-hand market for

commercial vehicles.

Working capital

When estimating the working capital, a sufficient amount has been considered to cover
payments during the first 3 months, that is: Rent, salaries, social security, supplies, advice,
advertising, etc.

Monthly payments
 Rent. 904.8

Supplies. 162.4

Commertial expenses. 110.2

Expenses for External Services. 110.2

Personal expenses. 1290

Other expenses. 319

Full payment in 1 month. 2896

Maneuver Fund 3 months (approx.) 8689

The initial investment necessary to carry out this project is summarized in the
following scheme (in euros) (without VAT)

Premises Adequacy: 6600

Furniture and fixtures: 1500

Computer Equipment and Software: 1650

Equipment: 9600

Initial Stock and Consumables: 2100

Establishment Expenses: 1900

Bails: 1560

Maneuver Fund: 8689

Utensils and Tools: 2700

Other Investments: 15000

Total: 51299 (Total without VAT)

FINANCING PLAN : To finance this business there are several options:

Own Sources. It is financing that comes from the entrepreneur's own resources:
money, goods in kind, etc.
 Outside Sources . Any type of financing that comes from third parties outside the
company: bank financing (through credits, loans and discounts), financing from other types
of companies, mutual guarantee companies and venture capital entities, etc.

Investment support. Aid and subsidies generally coming from institutions and
Public Administrations. They are resources that the company obtains from generally public
organizations. They usually consist of loans at a cheaper interest rate than the market rate
and non-refundable aid to encourage business creation.

7.- ECONOMIC-FINANCIAL ANALYSIS II. INCOME AND EXPENSES

EXPENSE FORECAST

The estimate of the main monthly costs is as follows (they do not include VAT):

Variable costs:

Variable costs are estimated at 25% of the volume of income for the month.

Rent:

For this business it is necessary to have a premises of about 60 m2. The average price will
depend largely on the location and conditions of the premises; for the study, a price of
€780.00 has been estimated.

Supplies , services and other expenses:

Here expenses related to supplies such as: electricity, water, telephone, etc. are considered.
Services and other expenses (cleaning, consumption of bags, office supplies, etc.) are also
included.

These expenses are estimated at around €140.00 per month.

Commertial expenses:

To publicize the business and attract customers, we will have to bear certain commercial
and advertising expenses of about €95.00 per month.

Expenses for external services:

Thus, the total expenses for external services will be €95.00 per month.

Personal expenses:
To carry out the study, it has been considered that the business will be managed by the
entrepreneur, who will be the manager of the business. In addition, a couple of receptionists
will be hired, one full-time and one part-time, two part-time monitors and one person. in
charge of track maintenance.

Personnel expenses will be distributed monthly as follows (includes the pro rata of extra
pay):

 Entrepreneur (self-employed) 1,290 + 0

Other expenses:

We consider here an item for other possible expenses such as repairs and fuel consumption
as well as other expenses not included in the previous items (taxes and insurance, etc.). The
estimated amount will be €3,300.00 per year, so your monthly amount will be €275.00

Amortization:

The annual depreciation of property, plant and equipment has been estimated as follows:

Premises Adequacy: 660

Furniture and fixtures: 300

Computer Equipment and Software: 412.5

Equipment: 1920

Utensils and Tools: 540

Other Investments: 3000

Total: 6832

(*) The amortization of the adaptation of the premises has been carried out over 10 years.
The amortization period for the adaptation of the premises would be that corresponding to
its useful life, and the existing tax tables could be applied for this purpose. However, given
that it has been assumed that the premises will be rented, said useful life is conditioned by
the term of the rental contract if it is shorter than that.

In addition, the amortization of expenses to be distributed over several years (establishment

and start-up expenses) would have to be included:

Establishment Expenses: 633.33

Annual Total: 633.33

Total Estimated Fixed Expenses/month . 3297

Total Estimated Variable Expenses/month . 25%

TOTAL MONTHLY EXPENSES: 4396

INCOME FORECAST:

It is a sector in which prices vary greatly, especially due to the great variety of raw
materials and fabrics used in the products that vary their quality. Prices can be quoted based
on the specific work to be performed or by the hour.

The pricing strategy for a company like the one developed in this project must be based on
offering a quality product at competitive prices. Therefore, pricing will be oriented based
on the competition's prices.

However, if a higher quality product is offered, prices slightly higher than market prices
may be applied.

It will be important to maintain a good relationship with suppliers, to obtain good prices
from them, speed of service and obtain an image of seriousness. This way, customers can
be offered better benefits, and the final margin will be higher.

8.- FORMAL ASPECTS:

Choice of Legal Form. Choose and justify the type of company chosen.

An important decision that we must make is the type of company we establish. This
decision is conditioned by:

The number of promoters that make up the project.

The type of activity of the company.

The limitation of liability to third parties.

The tax aspects.

The capital to start the activity.

The advantages and disadvantages of each of the legal forms.

Other requirements:

Some requirements that, in general, are required for opening a dance hall are:

1. Municipal operating license:

For it to be granted, a certification from a technician is necessary that certifies that the
adaptation of the premises has been carried out under his direction and in accordance with
the regulations. In addition, insurance must be taken out to cover the risks of fire and civil
liability against third parties, a periodic inspection plan for fire protection equipment and an
emergency plan. All this with a technical sheet where its characteristics are specified.

2. Licenses for activities and facilities:

In order to start the business, the opening license must be requested from the competent
authority.