Production of upholstered furniture as a business

Everyone knows that “man” and “sofa” are inseparable concepts. The sofa is the best friend of any man, because on this beautiful and very comfortable piece of furniture you can relax after a hard day at work, cheer for your favorite team in a pleasant environment, or spend time with your family watching an interesting movie. But the most enterprising heads of the family know how to not only relax with their “friends,” but also make very good money.

Our guest today has been producing sofas for wholesalers for several years now. Ilya Zakirov gladly agreed to share his story with the editors of the journal Reconomica . During the interview, the man told how he started his business, what difficulties he had to overcome on the path to success, and also gave some useful advice to everyone who wanted to repeat his experience.

Relevance of the idea

The business of producing upholstered furniture is very relevant today. Finished products occupy about 15% of the entire furniture market. The idea of making upholstered furniture is especially interesting for small and medium-sized businesses. The popularity of such entrepreneurship is explained by the following reasons:

Many people now prefer to order furniture rather than buy ready-made ones. Large factories do not do this, but for small entrepreneurs the niche will be very successful and in demand.
Possibility of using manual production. This, in turn, allows you to significantly reduce the start-up costs of starting your own business.
Flexibility. Small entrepreneurs quickly respond to the emergence of new fashion trends and take into account the wishes of their customers. And if the production of a new model of upholstered furniture in a large factory requires restructuring, which will take several months, then in a small manual workshop it will take literally a couple of days to change the direction of activity.
Exclusivity. Through the use of special materials and accessories, individual models are created, which especially attracts people with high social status and financial standing.

How much profit will furniture production bring as a business?

If you spend 3 thousand rubles on making one sofa, you can sell it for at least twice as much. However, usually clients are willing to pay more for a sofa - 7-10 thousand rubles. Thus, when producing 100 units per month, you can receive 700 thousand - 1 million rubles in profit. True, half of the amount will be spent on taxes, the purchase of raw materials, and wages for employees. At first, an entrepreneur may have 200-300 thousand rubles of net income left in his hands. However, this will be enough for the furniture production business idea to pay for itself in 4-5 months. In the future, profits can be increased by introducing new furnishings into the assortment and acquiring more customers, and in general, the entrepreneur can count on quite successful work, especially if he never skimps on the quality of his products. Similar articles:

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List of manufactured goods

The production of upholstered furniture as a business begins with determining the range of finished products. In general, regulatory and technical documentation and all existing standards do not use the concept of upholstered furniture. Many of its varieties can be tough. Upholstered furniture has several special elements:

springs;
pillows;
fillers.

Most often, the list of upholstered furniture includes sofas, armchairs, ottomans, banquettes, couches and chairs. An entrepreneur can engage in the production of one or several types at once. The more diverse the assortment, the more clients the businessman will be able to attract.

Description of the object

Our business plan for the production of upholstered furniture with calculations is designed to assist in the creation and launch of a small workshop that will produce custom-made products. The most productive use of the document is to organize production in small towns. The enterprise must provide a full technological cycle for the production of upholstered furniture and its sale to consumers.

Main range of products:

Sofas.
Banquettes.
Ottomans.
Armchairs.
Sun loungers.
Chairs.

Surprisingly, there is no definition of “upholstered furniture” in the regulatory and technological documentation. The current standards use concepts such as “sitting furniture” and “lying furniture”. Moreover, these products can be made with both soft and hard elements. Therefore, in the generally accepted understanding, upholstered furniture means products whose design contains traditional elements of “softness”: pillows, springs, various fillings, etc.

Features of the upholstered furniture market

Most often, furniture is bought by wealthy people. They prefer to make repairs and replace sofas and armchairs every few years. However, the premium segment occupies no more than 13% of all furniture produced in Russia. And mid-price range products account for about 60%. This variation is explained by the fact that when purchasing expensive furniture products, customers often prefer foreign brands rather than domestic ones. In general, the trends in the furniture market are as follows:

In-line production of upholstered furniture is becoming less and less relevant. People prefer to have things made to order. This allows you to get an interesting product that has no analogues. It is the creativity of design that largely attracts buyers. Many are even willing to sacrifice the practicality of furniture for the sake of its stunning appearance. For example, many people decide to buy a white or silk sofa, knowing about the need to carefully care for it.
If an entrepreneur wants to succeed in the furniture production industry, then he needs to be prepared for the fact that serious working capital will be required, despite the low price of the necessary equipment. Such expenses are needed for constant purchases of raw materials and materials. It is important to always have a large selection of fabrics, upholstery, and filling available. Otherwise, the furniture manufacturing process may take a long time, which will have a bad effect on demand. And during periods of calm, even greater working capital may be needed.
You should not rely only on selling finished products through stores. Statistics show that only about 20–25% of the goods are sold this way.
You need to focus on the region in which the production workshop is opened. Transporting furniture will require a significant investment of money and time, which means that the amount of profit received will also decrease. It is better to reduce the price of the product, but sell it in your region, actively promoting your own brand.
Domestic buyers prefer upholstered furniture with collapsible mechanisms. This is especially true for sofas. The most popular transforming models are “dolphin” and “Eurobook”.

Taking into account all these features, an entrepreneur will be able to build a reliable and profitable mini-factory for the production of upholstered furniture.

Business registration

An entrepreneur who is determined to start producing furniture must undergo official registration. You can open an IP. For large sales volumes, it makes sense to choose an LLC. When registering, a businessman must indicate the following OKVED codes:

36.14 – for the ability to produce furniture;
51.47.11 – for wholesale sales;
52.44.1 – for retail sales.

Furniture production does not require licensing. However, to obtain a quality certificate, finished products must comply with existing GOSTs. It is unlikely that clients will want to buy furniture without confirmation of its quality, especially when it comes to sales to other legal entities.

Production technology

Before organizing a business, an entrepreneur must study in detail and establish the technology for the production of upholstered furniture. The quality of the finished products and their compliance with standards and requirements will depend on this. The production of different furniture has its own characteristics. The most difficult thing to make is sofas. We will consider a step-by-step plan for their production. Everything will depend on the type of sofa. Here are the main components for the production of upholstered furniture (sofa):

Frame . Is the main element. Responsible for the strength of the sofa throughout the entire period of operation. The remaining parts of the furniture unit are attached to the frame.
Spring mechanisms . This also includes soft fillers that regulate the level of softness.
Transformation mechanism.
Cover with padding.

The production process itself looks like this:

First, wooden blanks are made. To do this, take plywood and boards and saw them into parts of the required size.
Frame assembly. Mechanisms for transformation are also attached to it.
The assembled frames are covered with foam rubber, and then framed with upholstery material using a construction stapler. To prevent the finished product from knocking or creaking, a special material – darnit – is glued onto the wood.
Next, spring blocks are inserted. They are evenly distributed over the entire surface of the seating area.
The surface is covered with foam rubber around the perimeter - this will allow the spring mechanisms not to come into contact with the solid frame.
The springs are then covered with high-density woven material. It increases the service life of furniture upholstery.
Padding material is used on top. For budget furniture it is foam rubber or spangon. But more expensive products are lined with coconut coir, which increases the service life to 7–8 years.
After this, foam rubber is used again, only 4 centimeters thick. It is laid out on padding polyester, which is necessary to create a breathable surface for the foam rubber.
Next, the upholstery fabric is cut to the required size and attached to the frame of the product.

After all stages are completed, the product must be checked, and only then packaged in a plastic case and cardboard. In this form it is stored in the warehouse until it is sold. If the enterprise is small, then the furniture is often packaged from the production workshop and sent directly to the buyer.

What are the manufactured products?

Today the market is able to offer simply a huge amount of upholstered furniture, which is characterized by comfort and beauty. Therefore, when making, for example, a sofa, you must find out what it contains. This is required to ensure that the customer is satisfied with your work. You will have to be thorough in purchasing the necessary equipment for the production of upholstered furniture and carrying out all the technology for its production. So, in order for everything to go smoothly, you need to know that the product consists of:

A cover made of upholstery material.
Springs and many other soft parts.
Support
Mechanisms of transformation.
Frame

Finding suitable premises

Furniture production will require renting or purchasing premises. To work you may need:

production workshop - area can vary from 30 to 250 m2;
warehouse – from 50 to 200 m2, depending on the scale of production and the level of logistics at the enterprise;
office - about 20 m2, where clients will be received, where you can also place samples of your products.

Small-scale production can do without its own office. It is more logical to place the production workshop and warehouse together in an industrial zone, and the office in the city center. This way you can achieve maximum efficiency, saving on rent.

Special requirements apply to the warehouse and production workshop. They must meet the following parameters:

ensuring all fire safety requirements;
sufficient space to accommodate equipment or finished products;
Constantly maintaining the temperature at 10–150C;
the ability to regulate humidity (the room should be dry enough);
mandatory equipment for workplaces.

Subsequently, an entrepreneur may think about renting premises for his store. This option should be considered by those businessmen whose factory has become famous and recognizable in the city or region.

Furniture production as a business: main investments

For full-fledged operation, the enterprise will need a whole set of equipment, and the following amounts should be allocated for it:

38-40 thousand - for a grinding machine
30-32 thousand – for a multi-rip edger
20 thousand – for a combined machine for wood processing
20 thousand - for a cross-cutting machine
19 thousand - for a circular saw
14-15 thousand - for a milling machine
11 thousand - for drying equipment
10 thousand – for hand-held power tools (various screwdrivers, hammer drills, drills, etc.)
8-9 thousand - for a lathe
8 thousand – for cutting tables (2 pieces will be needed)
5-6 thousand - for a special class sewing machine
4-5 thousand – for pneumatic clamps
2-3 thousand – for pneumatic staplers for fastening upholstery fabric
2 thousand – for cutting tools (knives and scissors)
1-1.5 thousand - for an air gun, necessary for attaching spring blocks
500 rub. – for measuring materials and marking tools

In total, the equipment will cost about 200 thousand rubles. Moreover, the production of upholstered furniture requires various purchases for the office - office equipment, office furniture, warehouse furniture... All this will cost about another 100 thousand rubles. And, of course, you will need to spend money on renting production space. Its area must be at least 450 square meters. m, which is enough to accommodate carpentry, upholstery, sewing shops, assembly and packaging departments, warehouses for raw materials and finished products, a small office and even a small exhibition hall. As a rule, on average such premises cost 180 rubles. for 1 sq. m, therefore, the monthly rent will cost 81 thousand rubles.

Purchase of necessary equipment

An obligatory step in opening your own production is the purchase of equipment. A large workshop will require not only professional machines, but also serious software. The final list of equipment depends on the specifics of the work. To make upholstered furniture you need the following tools:

jigsaw;
lathe;
milling machine;
format cutting machine;
sander;
screwdriver;
a circular saw;
furniture stapler;
trim;
special tables;
sewing machine.

It is important to take into account the various features of the tools when choosing. For example, the ratio of price and quality, warranty period of service, convenience, duration and complexity of repairs and replacement of parts will be important. At first, you can purchase equipment in the amount of 50,000 rubles. As your income grows, you should invest your profits in your own development. Let the money go to purchase more professional and automated equipment. If demand is high enough, you can think about increasing the number of jobs.

After installation of all equipment, it will be necessary to obtain permission to work from all regulatory authorities.

Additionally, you will have to allocate funds to purchase software. It will be necessary for modeling, visualization and further design of manufactured furniture. Such a program can not only show how a sofa or other product will look externally, but also indicate the exact amount of materials needed and provide diagrams for cutting parts. This will add another 50,000 rubles to expenses.

It will not be possible to do without purchasing vehicles to deliver furniture to clients. It is better to buy it outright or get it on credit/leasing. The average cost of a truck is 800,000 rubles.

Search for reliable suppliers of raw materials

The number of suppliers of raw materials in the furniture industry is quite large, therefore the prices for their products are approximately the same. When searching for the most suitable partner, you need to rely not only on cost characteristics. It is important to further evaluate the following features:

Range . You need to try to find a supplier who could provide the enterprise with everything necessary. This will eliminate the need to spend a lot of time on negotiations.
Variety of prices . It is necessary that one supplier has components of different price categories - from very low to high. This will allow you to purchase everything necessary for the production of furniture of different price categories in one place.
Delivery times . The faster the supplier can bring the order, the more profitable and fruitful the cooperation with him will be. With such a partner you can always agree on the rapid supply of missing raw materials in record time.
Availability of loyalty programs . If a supplier offers discounts and additional bonuses to its regular customers, it means that it is also interested in long-term cooperation.
Business reputation . You can find out about the supplier from other clients and company employees.
Location . It is good if the supplier is based near the production workshops of the enterprise. Then transportation will be fast, and therefore less expensive. It is important that the supplier’s warehouses have a special loading area.
Loading quality . The more carefully the supplier handles the goods, the fewer problems there will be with raw materials.

All together this will ensure fruitful and mutually beneficial cooperation for a long time.

Staff

The production of upholstered furniture will require hiring staff. A small factory will cost a few people, but representatives of a medium-sized business may need about 10 people. Employees will include:

Sales Manager;
technologist;
production shop workers;
pickers;
driver;
cleaning woman.

It is important that all of them are officially registered for work and are familiarized with safety requirements upon signature.

Sales channels

There is no point in investing a lot of money in advertising for a small production. But a large enterprise should allocate funds for promotion in order to attract as many interested customers as possible. Small-scale production may be limited to the following types of advertising:

distribution of leaflets and business cards;
placing advertisements in local print media;
placement of goods in construction and finishing stores;
establishing contacts with design and repair companies;
creating your own website, blog, group on a social network.

It makes sense for larger entrepreneurs to think about advertising on radio and television. They can make signs around the city, place advertisements on large buildings, and open points of sale in shopping centers.

Marketing and advertising

The company's marketing policy is aimed at forming the opinion among consumers that the upholstered furniture produced has excellent performance characteristics, has a lower cost than its main competitors, and that the company is ready to consider any options for long-term cooperation with the provision of significant price preferences.

To this end, the following promotional activities are planned:

Preparation and publication of messages about the enterprise in local media.
Development of a targeted advertising scheme by sending letters to specialized stores and companies.
Development of the company’s own website with the ability to order products online.
Activating consumer demand by developing attractive commercial offers and holding promotions.

The main marketing resource of the enterprise is the high quality of its products, which can be purchased profitably directly from the manufacturer.

Financial results

To open his own production of upholstered furniture, an entrepreneur will need equipment (from 100,000 rubles), transport (800,000 rubles), renovation of premises (50,000 rubles), other expenses - 50,000 rubles. In total, the starting investment will be 1,000,000 rubles. The following cost items will be included in the calculation of monthly expenses:

rent (40,000 rubles);
salary (60,000 rubles);
raw materials (25,000 rubles);
transport and utility payments (25,000 rubles).

The total cost is 150,000 rubles. From the sale of finished products, a small production can earn 250,000 rubles in a month if it independently transports, assembles and installs furniture. Then you can earn 100,000 rubles. Taking into account taxes, the profit will be equal to 85,000 rubles. The profitability of such production is 34%, and the payback will be 11.76 months, that is, at least 1 year.

Memorable cases from work practice

I would like to add that the best time was the winter of 2017. At that time, I opened my own website and received a good number of applications, but as summer approached, they became less and less, and I decided to close the site.

Fire spares nothing

However, despite the fact that the business still exists, there was a moment when I found myself in a very difficult situation. This happened in January 2016. The warehouse where I collected sofas was divided into 4 buildings. Each of these buildings had enterprises.

So, one late night the watchman called me and said that my building was on fire. Hearing this, I immediately got dressed and went to the place, but, to my regret, everything was on fire. Having put out the fire, I sat down on a bench near the entrance and began to cry, because everything I had done was destroyed. That day I lost 7 warehouse sofas, equipment and remained in debt to the warehouse owner.

At that moment I didn't know what to do. I lost any motivation. All I wanted at that moment was to find out why the fire happened. To my surprise, the watchman kindly agreed to show me the CCTV footage. When I watched the recording, my shock knew no bounds.

That day I lost 7 warehouse sofas, equipment and remained in debt to the warehouse owner.

That night, a man in a dark jacket stood near my warehouse. Most likely, he was not a worker, because I had not seen him before, and we all know each other. This man was smoking a cigarette and talking on the phone at the same time. Having finished the conversation, he threw the cigarette right under the door of my building.

The fact is that I have wooden bookmarks under my doors to prevent air from leaking. It was these bookmarks that caught fire and started the process.

I never found out who this person was, because none of my neighbors in the warehouse knew him. But still, I assume that this person was a client of one of my neighbors.

Read: How we decided to make money by growing and selling broilers, but went broke. Real story.

After the incident, I was depressed for about a month, but the support of my family and friends forced me to return to work. I paid off the debt and started looking for the same premises. Having found the premises, I resumed work.

Lawsuit with dissatisfied client

I would also like to talk about how I was involved in lawsuits over a sofa. One day I sold another sofa.

A few days after the sale, a woman called me and said that her son was almost injured while jumping on the sofa, and asked for compensation because a spring came out of the sofa. At that moment I felt funny, because she said in plain text that her son was jumping on the sofa, which is completely contraindicated.

Refusing to pay, I hung up, but a couple of days later I again saw an incoming call from that woman. As the conversation progressed, she stated that she intended to go to court. 2 weeks later I received a notification in the mail that I was being summoned to court. Then I started to get nervous because I didn’t expect this woman to actually go to court. However, I did not despair and decided to hire a lawyer. This is where the fun begins.

I found a lawyer who helped me win my case.

The lawyer promised me that the trial would be won, because the case was really funny. But it turned out that the person took the money, but disappeared from the network 3 days before the start of the process. This action upset me, because he took the advance payment and disappeared. Then I had to find a new lawyer, but the difficulty was that he agreed to pay after the case, because I had no money. Then I found a lawyer who helped me win the case, and, of course, I didn’t pay any money.

A random idea brought good profits

There were also successful cases when I managed to sell a large batch of sofas. I would like to tell you about one of these. Let's start with the fact that I often visit the capital of Tatarstan - Kazan. One day I was passing through Kazan, because I was going to Vysokaya Gora to buy some machinery. Having picked up the mechanisms from Vysokaya Gora, I decided to visit the HOFF store located in Kazan.

When I arrived at the place, I was shocked because I saw that they were selling second-hand sofas at a very high price. For example, the simplest “Accordion” with yellow spots cost about 32,000 rubles. At that moment it dawned on me that I could make identical sofas that were cheaper at cost and sell them at the same price, but in good condition.

I took out my phone and started taking pictures of sofas that I could build myself. The consultant didn’t like what I was doing, and he decided to ask me for what purpose I was photographing the product. I told him that I wanted to take a couple of photos and send them to my brother who wants to buy a sofa. The consultant left me. Of course, I had to lie, because if I told the truth, I would have caused discontent. So, after taking photos, I headed home. Arriving in Almetyevsk, I didn’t immediately get to work, because everything faded into the background and was forgotten for 2 months, until I came across these photos on my phone.

Today, many people are already making these sofas, but I’m glad that I managed to bite off a piece of this pie.

Charged with motivation, I set to work, but everything turned out to be not so simple. Sofas that I thought were easy to assemble turned out to be something unknown to me. I spent 3 days studying the mechanisms and a week for further assembly. Having assembled my first sofa, which was called “Medeo” at HOFF, I was in no hurry to call wholesalers and send them photos, saying that I had assembled a cool sofa that costs 32,000 at HOFF, and will give it to you for 20,000.

Also read: Telegram of the Sofa Businessman.

I decided to collect another one in order (if one of the wholesalers agreed) to get more money. Having assembled an identical sofa, I called Orenburg. The man immediately agreed, because the sofa was very complex in terms of technical execution, and the price was simply fabulous.

A week later, a gazelle from Orenburg came to me. Having taken the sofa and confirming this, the person transferred me 44,000 rubles for both sofas. But today many people are already making these sofas, but I’m glad that I managed to bite off a piece of this pie.