Opening a refurbished furniture store? Know your startup costs!

Introduction

Renovated furniture stores are on the rise and becoming more and more popular. The used furniture market is expected to reach USD 25,034.1 million by 2027 and has yet to be a widely accepted option for owning quality furniture on a budget. Moreover, it is widely considered an environmentally conscious and sustainable choice.

Starting a remodeled furniture store can be a great business opportunity if done right. But it is important to take into account the costs associated with the establishment and the different aspects that will serve to ensure the success of your business.

This article will examine the costs associated with starting and running a refurbished furniture store, dive into the various factors you need to consider, and reveal helpful tips for running a successful store. Read on to find out everything you need to know to get your refurbished furniture store off the ground.

Start-up costs

Starting a remodeled furniture store involves a variety of start-up costs. These include store rent or lease for premises, disposal of premises or refurbishment, employment costs such as salaries and benefits, furniture, equipment and storage , insurance coverage, legal and accounting services, IT technology and infrastructure, licenses and permits, and advertising and marketing expenses. Here is an overview of the average cost ranges associated with each of these:

These expenses vary depending on the type of remodeled furniture store you are looking to open and the intensity of establishment required. It is important to prepare a detailed budget and research all the costs involved before starting the process.

Store rent/lease for premises

When opening a remodeled furniture store, an important consideration is the cost of rent or a lease for the space. According to Statista, the cost of commercial real estate rent per month in the United States averaged .28 per square foot in 2019 . The cost of renting or renting for a space varies depending on its size, location, and any special features it may have.

Many cities may have higher costs for their commercial real estate. For example, in New York, commercial rent rates come from –0 per square foot. If the store is located in a popular shopping area with lots of foot traffic, rental costs could be even higher.

Additionally, the length of the rental agreement is an important factor in determining the overall price. Most commercial leases are long-term, ranging from two to ten years, and can require a substantial sum of money. The amount requested upfront is usually based on the size and location of the space and the creditworthiness of the tenant.

When it comes to furnishing a new store, most contractors try to find ways to save on cost. Some may choose to work with a commercial real estate broker who specializes in finding office/retail space that fits their budget. Others may negotiate with landlords for more flexible terms and more reasonable rates. Additionally, many store owners choose to rent furniture, rather than buying it. Furniture rental can cost to per square foot per month , but it offers the flexibility to upgrade furniture as the store grows.

Escaping from the premises / renovation

Renovation is an essential part of setting up a renovated furniture store because it allows customers to experience a clean and well-maintained environment. This includes installing new fixtures and finishes, such as flooring, paint, countertops, and lighting. Also, following current trends can help make your store more modern and appealing to customers.

According to the latest statistical information, the cost of disposing of the premises / renovation can vary from ,000 to ,000 USD . This includes basic renovations such as adding new flooring, wall coverings and ceiling treatments, as well as more extensive improvements such as installing modern lighting, energy efficient HVAC systems and updated hardware and devices. Although this cost may seem high up front, these improvements can significantly increase the value of the store and attract more customers.

Aside from the cost of new fixtures and finishes, renovations also have labor costs. Depending on the scale and complexity of the job, labor costs for your remodeled furniture store can range from ,000 to ,000 per job . It’s important to shop around and get multiple quotes from different contractors to ensure you get the best deals.

Additionally, you may also need to consider additional costs such as permits, certification fees, and installation fees, which can range from ,000 to ,000 depending on the type of renovation. While these additional costs may seem overwhelming, they are necessary to keep the store compliant with building codes and regulations.

Employment expenses such as salaries and benefits

When it comes to considering the cost of opening a remodeled furniture store, one of the main factors is employment expenses such as salaries and benefits. According to the United States Department of Labor, the average annual salary for furniture store and repair workers was ,490 as of May 2019. Salaries can vary based on experience, skills, and location.

In addition to wages, employers must consider the cost of providing benefits such as medical insurance, paid vacations and pension plans. According to the Bureau of Labor Statistics, employers spent an average of .52 per hour on employee benefits for all workers in private industry in March 2020, while the cost of manufacturing durable products was slightly higher at .01 per hour.

While these costs may seem daunting, there are various strategies to mitigate the employment expenses associated with starting a remodeled furniture store. Consider hiring part-time or seasonal workers to call on customers and help with sales, such as a marketing specialist or customer service representatives. Additionally, by utilizing existing resources and training existing employees, employers can reduce training costs. Focusing efforts on the effective use of existing staff will help minimize the amount spent on salaries and benefits.

Furniture and storage equipment

Opening a remodeled furniture store requires an initial investment in equipment and furniture storage, both of which can be surprisingly expensive. Refurbished furniture has become a popular option recently, but it’s important to understand the cost implications and make sure you’re budgeting for the early stages of planning your furniture store.

Furniture Equipment: Furniture equipment includes items like work benches, hand tools, power tools, hand tools, and jumpsaws. Depending on the type of refurbished furniture you are selling, you may need additional items like sanders, dust collectors, and guns. The cost of these items varies greatly depending on quality and brand, but you can expect to pay anywhere from 0 to ,000 for the necessary equipment.

Storage: Depending on your location and the size of your store, the cost of storage can vary significantly. If you have an existing space that you can use, you will be able to save money. But if you need to rent space, storage expenses can add up quickly. The average cost of a small storage unit is around 0 per month, but this can increase significantly depending on the size and location of the space.

By analyzing the latest statistical information, the cost of furniture equipment and storage for a remodeled furniture store can range from 0 to over ,500. It’s important to take these costs into consideration when planning your store’s budget, as the upfront cost of equipment and furniture storage can be a major contributor to your store’s success.

Insurance cover

When it comes to opening a remodeled furniture store, insurance coverage is a critical consideration. It not only protects your business but also provides coverage for its employees and customers, ensuring operations run smoothly in the event of an accident or injury. Before your remodeled furniture store can open its doors, you will need to purchase an insurance policy to protect yourself and your business.

Types of Insurance Coverage for Renovated Furniture Store

• Property insurance – covers all physical assets owned by you, the business owner. This may include loss of revenue incurred if operations are disrupted due to damage to building or furnishings.
• Liability Insurance – covers the costs of any lawsuits that may arise from customers or other third parties.
• Worker’s Compensation Insurance – covers medical bills and lost wages if an employee is injured on the job.
• Product Liability Insurance – covers any loss of a defective product.

Cost of insurance coverage for refurbished furniture store

The cost of insurance for your remodeled furniture store will depend on several factors, including the type of business and the size of the operation. The average cost of insurance coverage for a remodeled furniture store is around ,000 to ,000 per year, but this can vary significantly depending on the coverage you choose. It’s important to shop around, compare prices, and make sure you’re getting the right coverage for your needs.

Legal and accounting services

Opening a remodeled furniture store can involve a number of legal and accounting fees, including business registration and accounting setup and maintenance fees. Depending on the legal structure of the business, you may need to pay for legal expenses such as documents, settlements, and insurance coverage. The cost of legal and accounting services can vary widely.

Score International’s research indicates that the cost of opening a business with legal services can range from 0 to ,500, although in some cases it can cost as much as ,500. Costs can include filing fees and document preparation, as well as setting up separate bank accounts, processing employee benefits, complying with rules and regulations, and more. When it comes to accounting, setup fees can range between 0 and ,000, depending on the complexity and size of the business. In addition, accounting maintenance fees can range from 0 to 0 per month.

The actual cost of legal and accounting services will depend on individual business needs. It can be a good idea to research different service providers and make sure you understand the cost breakdown before making any commitments. The cost of legal and accounting services should be a priority to ensure legality and accuracy for any business.

IT technology and infrastructure

Opening and running a refurbished furniture store requires significant initial investment and ongoing operational costs. One of these costs is in terms of technology and IT infrastructure . According to market research from Technavio, the global furniture automation technology market is expected to reach USD 11.55 billion by 2020.

Modern furniture stores need a robust assortment of IT and technology infrastructure for effective and efficient day-to-day operations. This could include the following:

• Accounting and inventory management software to keep track of orders and payments
• An enterprise resource planning system to track employee performance and productivity
• Customer relationship software to manage interactions with customers and suppliers
• A website to showcase product offerings and take orders
• An e-commerce platform with shopping cart and payment options
• A secure network to store data
• An analytics platform to monitor and measure store performance
• A mobile app for mobile ordering and payment processing
• POS system for in-store customers

The cost of implementing the aforementioned technology varies depending on the size and complexity of the store as well as other factors. For example, the cost of setting up an online store with a shopping cart and payment options could range from 0 to ,000. Additionally, maintaining an in-store POS system could cost around to per month. Additionally, depending on the size and customer base of the store, the cost of network setup and infrastructure could range from a few thousand to several lakhs of US dollars.

It is also important to consider the cost associated with staffing and training an IT team. This could include the cost of hiring IT professionals and training staff members on the use of new technologies. Depending on the size and complexity of operations, costs could range from a few hundred to a few thousand dollars per month.

It is obvious that investing in the right technology and IT infrastructure is essential for the success of modern furniture stores. However, the cost of this is substantial. This is why it is important to carefully consider all the costs involved before investing in technology or IT infrastructure.

Licenses and permits

When starting a remodeled furniture store, obtaining the necessary licenses and permits is a must. The exact licenses and permits you need to operate vary depending on where your store is located. Generally, you will need to obtain a basic business license, a sales tax license, and an Employer Identification Number (EIN). Depending on your city and state, you may also need other local licenses or permits.

Basic Business License : The cost of a basic business license varies by state and municipality. Typically, the one-time fee to get the license is minimal, usually in the low 100s.

Sales Tax License : All businesses must register for a sales tax license for each locality in which they do business. The need for a sales tax license, however, does not necessarily mean that a business will collect taxes from customers. It depends on the product and whether state and local laws require companies to collect taxes from customers who purchase it. Depending on the state, a sales tax license can cost anywhere from to 5.

Employer Identification Number (EIN) : All businesses must obtain an EIN, which is valid for a lifetime. The fee for an EIN is .00.

It is important to consult your local government to ensure that you are in compliance with all necessary licenses and permits. Failure to do so could result in fines and other penalties.

Advertising and Marketing

Having a well-thought-out advertising and marketing strategy is essential to the success of any new business, including a remodeled furniture store. The cost of launching such a marketing strategy will depend on the type of advertising and marketing methods you use, how you use them, and how much you are willing to spend.

According to the Statista report in 2018, the average advertising and marketing spend in the United States was ,261 per capita. Breaking that figure down, digital advertising accounted for nearly half of the total , hitting ,937 per capita. Traditional ad spend was still a large portion, 3, with direct mail and telephone solicitation accounting for 5 and 3, respectively.

If you’re starting a remodeled furniture store, it’s a good idea to spend a little more on digital advertising because that’s where most people are looking for furniture these days. Digital advertising methods include:

• Social media campaigns running on platforms such as Facebook, Twitter and Instagram;
• Local search engine optimization (SEO) efforts such as Google AdWords;
• Display ads running on online marketplace websites;
• Pay-per-click (PPC) advertising campaigns.

Due to the nature of the business, you’ll also want to incorporate more traditional advertising methods to get the word out. This could include things like newspaper and magazine ads, publication posting campaigns, radio and TV ads, and even flyers and posters.

The cost of your advertising and marketing efforts will depend on the method you choose as well as the amount of money you have allocated for the campaign. However, it is important to remember that the cost of Advertising and Marketing is an investment in your business – without it, you are unlikely to be able to reach the right customers and generate the sales needed to make your business successful.

Conclusion

Starting a refurbished furniture store is a great business opportunity with a wide range of potential for success. However, it’s important to be aware of the costs and resources you’ll need to get your store up and running, as well as the ongoing energy and maintenance costs associated with keeping it up and running.

By understanding the costs associated with opening and running a remodeled furniture store and the various factors you will need to consider, you can ensure that you are making the right decisions and minimizing potential risks.

In summary, the costs associated with opening and running a refurbished furniture store include:

• Store rent/lease for premises
• Escaping from the premises / renovation
• Employment expenses, such as salaries and benefits
• Furniture, equipment and storage
• Insurance cover
• Legal and accounting services
• IT technology and infrastructure
• Licenses and permits
• Advertising and Marketing

Careful planning, budgeting, and research can help you better understand the costs involved and ensure you have what it takes to launch and sustain your remodeled furniture store. Good luck!