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How to Start a Furniture Making Business from Home

Do you want to start a furniture making business from home? If YES, here is a complete guide to starting a furniture making business with NO money and no experience plus a sample furniture making business plan template.

Everywhere you go, whether it is an office, a home or anywhere else for that matter, there is most likely going to be some sort of furniture there. People buy furniture every day and there has never been a better time to invest in the united states furniture making industry.

Investment in real estate is growing and as people move into their new homes, they would need kitchen cabinets, chairs, sofas, tables and all sorts of furniture. Even though the furniture making industry in the United States is highly competitive, it is a very lucrative business.

One of the most interesting things about this business is that you don’t even need to have the skills to set it up. You can easily employ artisans to do the construction while you handle the designing and business management aspect of the business.

You don’t even necessarily need to know how to design; you can hire designers to come up with innovative and trendy designs too. You can also choose to start however small you want if you don’t have enough capital to start off. With just one beautiful set of furniture, you are ready to start and you can keep scaling up as your business grows.

Finding the right customers is also not too much of a challenge as long as you are able to make good quality, eye-popping furniture that will satisfy the unique tastes and needs of your target market.

This article has tips to help you start your own furniture making business in the United States plus tips to help you overcome the stiff competition the local furniture business constantly faces from furniture imported from China, Europe and other places.

Steps to Starting a Furniture Making Business from Home

1. Understand the Industry

A research report by IBISWorld, classified the United States manufacturing industry into two major categories; household furniture manufacturing industry and office furniture manufacturing industry.

The office furniture manufacturing industry according to the report is a billion revenue industry with an annual growth rate of 0.2% between 2012 and 2017. The industry currently has about 4,191 operating businesses and employs around 112,773 people.

The Household furniture manufacturing industry on the other hand, is a $25billion revenue industry with an annual growth rate of 0.6% between 2012 and 2017. The industry has about 9,820 businesses and 130,760 people currently employed.

Interesting Statistics About the Industry
  • The entire United States manufacturing industry (manufacturing and retail) is worth about $96.4 billion with an expected annual growth rate of 2.9% expected to last through 2022.
  • Millennials are the largest consumer group in the United States furniture market. Between 2012 and 2017, this group of consumers increased their spending on furniture by over 142%.
  • 45% of the revenue generated in the entire industry is from the sale of household furniture, 25% from the sale of office furniture, 5% from institutional furniture sales, 10% from custom architectural woodwork and millwork and 10% from the sale of other furniture like mattresses, blinds and shades.
  • Furniture and home furnishing sales make up 8.8% of the entire e-commerce revenue in the United States.
Is The United States Furniture Making Industry Growing or Dying?

The United States economy seems to have made a full recovery from the impact of the economic recession and this has rubbed off on the furniture making industry. With more money in people’s pockets, the country’s housing market and real estate market in general is witnessing an impressive growth rate.

Demand for real estate is also at an all-time high and as people move in to occupy their new homes and offices, they require furniture, not just for comfort but as an accessory to make their homes beautiful. Hence, it is safe to say that the United States furniture making industry is definitely a growing one.

The industry is not oversaturated either as during the recession, a number of small scale manufacturing industries had to go out of business as they could no longer cope with the low sales volume and stiff competition from imported furniture which were very much cheaper.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

It helps to know who yours potential clients are and what their buying behavior and attitude is like before you venture into this business. Having a clear demographic and psychographic analysis of your business would help you to structure your business properly and competitively.

According to a report by the Franklin Furniture Institute Furniture Outreach Program, the United States furniture market clientele can be classified into four different generations namely; the Generation Y, Generation X, Baby Boomers, Depression and Post-Depression generations.

The Generation Y refers to those people born between 1978 and 1994, while Generation X refers to those who were born between 1965 and 1977. Baby Boomers are born between 1946 and 1964 while Depression and Pre-Depression generation were born before 1946.

The report revealed that the Baby Boomer Generation makes up 42% of furniture buyers followed by Generation Y, also known as the Millennial Generation. The Millennials who are between the ages of 18 and 34 are experiencing life changes that necessitate the purchase of furniture.

Some of them are moving out of their parent’s homes to live alone, some are getting married, while others are buying their first homes or having their first children. Generation Y represents 25% of the market.

The Depression and Pre-Depression generation only accounts for 6% of the market as people within this age group are aged and not doing much furniture buying at this stage. Generation X also accounts for 27% of the United Sales furniture market.

3. Decide Which Niche to Concentrate On

There are a number of niche ideas that you can choose from in the industry. Some of them include:

  • Children’s furniture
  • Furniture remodeling
  • Bathroom Vanity
  • Kitchen Furniture
  • Office Furniture
  • Garden and Outdoor Furniture
  • Luxury Furniture
  • Online Furniture sales
  • D-I-Y furniture (like Ikea)
  • Furniture recycling
  • Furniture finishing
  • Furniture designing
The Level of Competition in the Industry

As an indigenous furniture maker in the United States, competition from local brands is not as tough as the competition you would face from the foreign market. Americans purchase furniture worth billions of dollars yearly but a large chunk of these purchases are made from overseas distributors in Asia, Europe and Canada.

Buying ‘Italian furniture’ or furniture from some other European countries is common amongst the upper middle class who see it as making a statement. Think of it like wearing designer clothing. The less affluent Americans choose to buy from Asia instead since it is mostly cheaper. Furniture distributors and retailers also buy a chunk of their stock from foreign markets.

One way to stay ahead of the competition is to delve into a specific niche and stand out in that niche. For instance, you can choose to specialize in revival of custom furniture. This is one niche that is very lucrative and unbothered by the foreign market because many Americans would jump at the idea of having their old furniture transformed into something new and trendy for cheap.

Alongside specializing in a niche, taking your business online, deploying the right marketing strategies and promoting brand awareness program would also help your business survive in a stiff market.

4. Know Your Major Competitors in the Industry

In order to properly position yourself for success in this industry, it is essential to know who your competitors are. Some of the brand names that stand for something in the industry include:

  1. Ashley
  2. Lazboy
  3. Berkshire Hathaway
  4. Ethan Allen
  5. LOWE’S
  6. The Home Depot
  7. HNI
  8. Herman Miller
  9. Leggett & Platt
  10. Steelcase
  11. Tempur Sealey
  12. Ikea
  13. Hellman-Chang
  14. Bernhardt
  15. Baker
  16. Copeland
  17. Johnson Casuals
  18. Kincaid
  19. Vaughan-Bassett
  20. Simplicity Sofas
Economic Analysis

The furniture industry in the United States suffered whilst the economic recession lasted. Most customers had to trim their nonessential spending and this led to a decline in the revenue generated in the industry. But in the past few years, the furniture market has grown so fast in direct response to the increase in discretionary spending and the boom that the housing market is currently experiencing.

However, a number of key industry trends have emerged.  These trends are expected to shape the future of the furniture market and influence the way clients make their furniture choices.

  • Home Office Furniture sales are increasing due to the rise in telecommuting. More people are able to work from the comfort of their homes and this has led to a growth in the sale of desks, filling cabinets, office chairs and other furniture that can be used to set up an office at home.
  • Versatile/Multi-functional furniture is also becoming more popular. There is an increasing number of people living in small spaces and multi-purpose or foldable furniture makes it easier for them to manage space.
  • Online stores are becoming a fast growing sales channel. With online stores, furniture makers can easily bypass middlemen and sell directly to consumers, increasing their profit potential along the way.
  • Furniture makers are also embracing the green technology. Even though eco-friendly furniture are significantly more expensive, the demand for them are constantly increasing.  The demand for luxury furniture is also on the rise too.

5. Decide Whether to Buy a Franchise or Start from Scratch

The most recommended options for you is to start your furniture making business from the scratch or buy an existing business out-rightly. Buying a franchise in this type of business is really not necessary because furniture making is much like a being a designer; you wouldn’t want to stamp your labels on another person’s designs. Rather, you would want to make your own designs and make a name for yourself in the industry.

If you are not sure that you can handle starting the business from the scratch, then you should consider buying an existing business. If you are lucky enough, you would find someone who is looking to retire or relocate.

You have to be very careful when buying another person’s business however. It is important to clearly understand why they are quitting the business and whether or not they have any reputation, financial or legal challenges so that you don’t end up inheriting another business’ challenges.

6. Know the Possible Threats and Challenges You Will Face

Yes, furniture making can be a very lucrative business but the road to success is not a completely smooth one. You may be faced with some challenges when you are trying to find your foot in the industry. Some of the potential threats and challenges you may be faced with include:

  • Competition with Imported Furniture

It is no news that China makes some of the cheapest furniture and many consumers prefer to go with the cheaper option. These items are not necessarily of good quality but very cheap. One way to overcome this challenge is to project the quality of your furniture to your potential clients. Let them see why cheap might really just be expensive wearing a disguise because within a short while, they would require a change of furniture while good quality furniture may appear expensive initially but they can last a lifetime.

  • Market Fluctuations

The furniture industry is always affected by changes in the economy. Just like when there was a global recession and it led to a serious sales decline. You would have to figure out ways to keep your business afloat when such happens.

  • Competition with The Big Brands

There are a lot of furniture makers that hold a large share of the market. You would also need to figure out how to effectively compete against such businesses.

  • Keeping up With Trends and Innovation

Another challenge is how to keep up with the innovations and trends that keep coming up in the industry. You may need to constantly invest in technology that would enable you keep up with some trends.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

You want to be on the right side on the law when you start running your business. This is why it is important to pay attention to some of the legal requirements of starting a furniture making business in the United States. New furniture making business owners have five major choices when it comes to possible legal structures for their businesses.  The five choices include Sole Proprietorship, Partnership, Limited Liability Company, S Corporation and C Corporation.

However, setting up your business as a Limited Liability Company might just be your best bet. This business structure protects you from all business liabilities and the only thing that would be at risk is the money that you invested into the business as your personal assets cannot be used to offset the liabilities of the business.

If one of the chairs you sold to a client collapses while they are sitting on top of it and the client thinks you are to blame for that and decides to sue you for instance, your personal assets cannot be used to pay off compensation if you are adjudged guilty by the court and your business lacks the financial capacity to offset the bills.

Basically, when you set up your business as a Limited Liability Company, you are considered a separate legal entity from your business and what happens at work stays at work, literally.

The only challenge with this business structure is that the taxes are usually higher than sole proprietorship or partnership business structure. It is also much more expensive to set up so if you are starting your business on a budget, you may find it easier and cheaper to set up your business as a sole proprietorship or a partnership.

8. Discuss with an Agent to Know the Best Insurance Policies for You

As a furniture maker, you would most likely use wood, paint, fabrics, lacquer and a number of other materials which may be highly flammable to manufacture your products. Some of your employees may be exposed to danger from these items and at the same time, you may lose expensive equipment to a fire or workplace accident. This is one of the most important reasons why you need insurance protection for your business.

Some very vital insurance policies that you should get for your business include:

This protects your business premises and your business equipment from fire and other damages from natural disasters, vandalism or theft.

This one covers for the loss of income that your business may suffer if you are unable to operate due to utility breakdown, natural disasters or legal reasons.

  • Inland Marine Insurance

If you are going to be shipping your products to your customers overseas or locally, you should get this type of insurance to cover for cargoes damaged in transit or other risks.

  • Equipment Breakdown Insurance

This covers for the cost of fixing heavy duty equipment that may breakdown during the course of business, as well as the loss of income that may arise as a result of such breakdown.

  • Worker’s Compensation Insurance

If any of your employees sustains an injury during the course of working for you, worker’s compensation insurance would cover for treatment and other damages.

  • Product liability insurance

If any of your client decides to sue you for product defects or malfunction, this one can be used to pay for damages.

  • Commercial Auto Insurance

If you own vehicles which you use for the business, you should get commercial auto insurance to cover for accidents or vehicle damages.

9. Protect your Intellectual Property With Trademark, Copyrights, Patents

A lot of work goes into designing unique pieces of furniture and you wouldn’t want just anyone to reproduce your efforts and make money off you without your permission. This is why you may need to get intellectual property protection for your furniture business to prevent illegal imitation.

There are four different types of protection you can get for your furniture business. They include copyright protection, trademarks, utility patents and design patents.

You should talk to a Lawyer about what you want and they would be able to assess the situation and determine what type of intellectual property protection you need for your business.

10. Get the Necessary Legal Documents You Need to Operate

You would need the following documents to be able to set up a furniture making business in the United States:

  • Business License
  • Zoning and Land use permits
  • Business Plan
  • Federal Employer Identification Number (EIN)
  • Sales Tax License
  • Fire Department Permits
  • State-issued Business License Permits
  • Employee Agreement
  • Intellectual Property Protection Documents

11. Raise the Needed Startup Capital

The equipment required to set up a furniture making business does not come cheap. You would need tens of thousands to set up the business and except you have the capital saved up somewhere, you would most likely need to look towards other external sources for funding.

Some ways to fund your furniture making business include:

  • Rollover for Business Startups

This involves using your retirement money like 401K, traditional IRA and other retirement funds to start a business.

  • Home Equity Line of Credit

Another funding option to consider is using your home equity as collateral for a loan from your financial institution. This is only possible if you have at least 20%-30% home equity.

  • Personal Loans

With a good credit score, you can get favorable interest rates from your bank to be able to finance your furniture making business.

  • Credit Card Financing

You can also consider using your credit card to purchase some of the tools and equipment you need to start the business.

  • Equipment Financing

Another option is to get some of the equipment you need on lease so that you can make payments in small installments as your business grows.

  • Crowdfunding

Crowdfunding makes it possible for a large number of people to make small contributions to your business in exchange of equity or a share of profits in the future. You can go on websites like Kickstarter and Indiegogo to look for Crowdfunding opportunities.

It is also possible to get loans to start your furniture making business from the Small Business Administration (SBA), a government owned organization that specializes in issuing loans to small businesses for startup and expansion.

12. Choose a Suitable Location for your Business

A good number of would-be investors end up shying away from the furniture making business because of the large space requirement needed for the business. To be able to set up a standard furniture making workshop, you would need a lot of space to work and store your tools.

Therefore, space is one of the most important considerations to make when selecting a location for your furniture making business. Zoning laws come next. While it is easy for you to get your business started from your garage, you have to be sure that you are not breaching any zoning laws.

You should also consider the demographics of your clients. You have to locate your business in a place where your clients can easily find you but this is not really much of a challenge because you can just get a showroom in a more visible part of town like in a shopping mall or other places with a lot of human traffic. So basically, you would have your factory in one part of town where it is cheap for you to get the required space for your business, and your showroom in a more fancy location.

A good road network is however very important for wherever you choose to set up your factory because you would need to be transporting a lot of raw materials, equipment and finished products around.

13. Hire Employees for your Technical and Manpower Needs

The good thing about this business is that you don’t even need to know anything about carpentry or woodworking to be able to start your business. You can employ people to handle all aspects of the business. Basically you would need woodworkers, arm makers, upholsterers, assemblers, hand carvers, carpenters, furniture finishers, cabinet makers, quality control inspectors and product testers to work in the factory end of your business.

To manage the office operation, you would need a receptionist or secretary, marketing officers, accountants and product designers. As for the tools and technical requirements for starting your furniture making business in the United States, you would need:

  • Design Software
  • Coping Saw
  • Chisel Set
  • Smoothing Plane
  • Block Plane
  • Combination Square
  • Computers
  • Printers, fax machines, telephones
  • Bevel Gauge
  • Dovetail Saw
  • Card Scraper
  • Marking Knife
  • Spoke shave
  • Drilling machines
  • Assembling equipment
  • CNC Router
  • Spraying and Finishing Tools
  • Veneering Tools
  • Heating and Extraction Tools

14. Write a Marketing Plan Packed with ideas & Strategies

When all is set and your business is finally open for business, there is one vital aspect of the business you would still need to take care of, and that is marketing.

For your business to survive, especially in a highly competitive market such as this one, you need a very good marketing strategy. A good marketing strategy would help you create the necessary brand awareness and visibility for your business.

Some of the marketing strategies that you should consider for this business include:

  • Create Brand Awareness

You need to make your target customers aware of the features and benefits of your products. You can do this by uploading the video of your staff and clients creating various looks with the furniture. You can also host in-store events where customers can come in and get to see live demonstrations of your product.

  • Offer Multiple Distribution Channels

You should make it possible for clients who want your products but do not live within your geographical location, to easily get them. You should create an e-commerce platform to facilitate online purchase of your product.

  • Launch a B2B Campaign

Get your sales reps out there to talk to business owners especially new startups. Business owners make up a large chunk of the market and you need to get them to buy from you as well.

  • Host Shows and Contests

This would help to increase the popularity and visibility of your business.


Furniture making is a very interesting and profitable business to start in the United States and you don’t even need special skill sets to set it up. You are also able to start very small (from your garage even) and gradually grow your business if you do not have a lot of capital to start out very big.