Production 

Business plan for furniture production with calculations

It is difficult to imagine a comfortable and cozy home without furniture. Starting your own business in the furniture industry, with proper preparation and taking into account all the nuances, can bring considerable profit. In this article we will look at a business plan for furniture production with calculations from scratch on how to open it and not go broke.

Business plan for furniture production

The furniture business exists in two versions: selling manufactured furniture or producing your own. Often businessmen start with sales, and then, having studied the specifics of consumer requests, open their own production. In this direction of activity it will be necessary furniture production business plan.

We will make the calculation for a furniture workshop that produces cabinet furniture in the middle price segment. This includes kitchens, office furniture, cabinets, etc. The organization of the enterprise will be carried out on the principle of an incomplete cycle: suppliers will prepare raw materials, and the company will produce ready-made panels for assembly, using the developed drawings. For an additional advantage in shaping the pricing policy and a shorter payback period, our own funds will be used when launching the project.

Before drawing up a business plan, it is important to carefully study the market - suppliers, consumers, competitors. The volume of furniture production in the Russian Federation, according to data from the Association of Furniture and Woodworking Industry Enterprises, is distributed as follows:

  • Office furniture - 23%;
  • Cabinet furniture (sets, hallways, suites) - 25%;
  • Kitchens - 22%;
  • Bedrooms - 13%;
  • Upholstered furniture - 17%.

The range of domestic furniture is presented according to the following parameters:

  • Functional purpose: cabinet furniture for lying or sitting: armchairs, chairs, chaise lounges, beds, sofas, etc.; for storage: chests of drawers, cabinets, cabinets, shelves; for work and eating: desks, dining tables, coffee tables, etc.
  • Design: non-dismountable, sectional, universally prefabricated (it can be repeatedly disassembled and reassembled), built-in, bent, transformable, wicker.
  • Materials: made of wood materials and wood, plastic, metal.

Planned assortment

We will first compile a list of the range of products we produce (data will change as demand is studied):

  • Facades for kitchens, kitchens;
  • Cabinets, cabinets, drawers, shelves, chairs, dining tables, stools;
  • Office furniture - shelves, computer desks, filing cabinets.

Target group

  • End consumers (wholesale) - hotels, restaurants, large government agencies, office centers, etc.
  • End consumers (retail) are business people with average incomes who update furniture every 2-3 years.
  • Intermediaries are design studios, specialized stores of interior items and furniture.

Business plan for furniture production: sales organization

Ways to sell products:

  • Through your office, which is also a showroom.
  • Using a network of stores, concluding partnership agreements with them (including stores from other regions and CIS countries).
  • Direct sales to government agencies, hotels, large private companies, using mailings and calls to a database of potential clients.

Advertising

  • Your own website on the Internet, its creation and promotion, weekly updating of the catalog, sending news to regular subscribers - contributes to the geographical expansion of the circle of consumers.
  • Placement of advertising blocks in interior and design publications, furniture magazines and other specialized press.
  • Placing advertising banners on similar topics on Internet resources.

Required documents

In terms of taxation and working with legal entities, it would be preferable to register an enterprise in the form of a limited liability company.

Documents for LLC registration:

  • Information about the name of the company - should be associated with its field of activity.
  • Agreement on the establishment of an LLC with a decision to open;
  • Charter documents with a list of types of activities and the amount of authorized capital not less than 10,000 rubles (contributed in money or property - office furniture, office equipment, etc.).
  • Details of the director and chief accountant - copy of passport, identification number, contact phone number, address.
  • Documents confirming payment of state duty.
  • Details of the bank where the current account is opened.

Production plan

Business plan for furniture production includes one of its most important parts - the production plan. Production will be organized according to the principles of incomplete cycle. The production of popular models of cabinets, prefabricated cabinets, kitchens, tables and other cabinet furniture will be produced according to the configuration and required sizes. It provides for the processing of purchased ready-made chipboards and MDF boards to the specified patterns. The furniture is delivered to the consumer and assembled on site.

Premises requirements

You will need 2 premises: for furniture production and for receiving clients. It is advisable to locate them close to each other. The premises have different functionality, therefore the requirements for them are different:

  • The area of ​​the production premises is at least 500-600 m², you need a heated spacious room on the ground floor, the possibility of arranging warehouse space and installing equipment, an equipped entrance with a platform for unloading materials and raw materials and shipping finished products.
  • Accessibility for the client is important for the office. Its location is preferable in the center of trade and business activity, on the ground floor, with an equipped showroom for displaying product samples. Area - 50-60 m². Communications and cosmetic repairs are required.

Equipment

List of equipment for the production of cabinet furniture parts:

  • Machines controlled by computer programs for the manufacture and modeling of furniture - “Astra-Furniture Designer”, “Astra-Cutting”.
  • Milling machine.
  • Electric jigsaw.
  • Lathe.
  • Some small tools.

Staff

List of workers with special skills and knowledge:

  • Workshop workers - 5-7 people. Requirements: experience operating the main types of furniture machines for processing chipboard and MDF boards.
  • Production foreman - 1 person. Bears financial responsibility for machines, raw materials and materials. Requirements: knowledge of the features of production processes for the assembly and manufacture of cabinet furniture, experience in organizational work.
  • Driver - 1 person.

Raw material suppliers

Raw materials for use in production are chipboards (chipboards), MDF boards. You will need domestic or foreign suppliers of slabs, consumables (glue, paints, coatings, hinges, handles, drawer guides, hinges, locks, fasteners, etc.).

Requirements for suppliers: company fame, certificates, delivery, possibility of deliveries with deferred payment. The search for suppliers is carried out in specialized publications, on the Internet, several offers are selected and compared.

Financial plan

To calculate a business plan for furniture production, we take into account all the initial costs of launching and promoting the project, fixed costs, and compare them with cash receipts. We analyze the main financial indicators: profitability, size of investment, payback period of the project.

Initial costs:

  • Purchase of equipment - 1,000,000 rubles;
  • Registration of a company - 30,000-40,000 rubles;
  • Purchase of consumables - 150,000 rubles.

Total for launching the project is 1,200,000 rubles.

Type of funds raised: own, borrowed. In the second case, additional costs for interest on the loan are taken into account. With an average interest rate of 22-25% per year, production profitability is required to be at least 30-35%. The payback period depends on the profit after paying all taxes, interest on loans and other costs.

We will consider the option of using our own funds to start production.

Variable costs (per month):

  • The workers' salary is 100,000 rubles;
  • Raw materials and materials - 150,000 rubles.

Fixed costs (per month):

  • The salary of office workers is 20,000 rubles.
  • Rent of premises - 50,000 rubles.
  • Advertising costs - 10,000 rubles.

The planned sales revenue is expected to be about 400,000 rubles per month. Intensive promotion will contribute to revenue growth per year by 20%.

Taking into account 30% profitability, the monthly income will be 150,000 rubles. Monthly fixed costs - 80,000 rubles. Profit after deducting fees, taxes and expenses - 70,000 rubles. If the profitability is 30%, the payback period will be 14 months.

Business risk analysis

The main risks include the smuggling of cheap, low-quality furniture from China and Poland. Such furniture is short-lived and can be harmful to health.