Building a joint furniture venture
I am currently the foreman in a custom cabinet shop, but am truly interested in furniture. There is a local furniture retailer in my community who wants to go in with me as a partner. He understands woodworking from the standpoint of a hobbyist. He really understands business and costing and price-pointing the merchandise. He would also be providing most all of the startup capital.
I understand woodworking as a professional, production based individual. We are meeting to discuss budgets and tools I would NEED and tools that would be nice to have.
1) Set a business goal that both you and your partner agree on. (Keep it simple.)
2) Develop strategies to achieve that goal, using your intuitiveness for the production/engineering side, and his intuitiveness for the sales/marketing side. (Keep them simple.)
3) Once you have developed the strategies, both of you must be disciplined in following them.
4) Any proposed changes or tweaking to those strategies must be looked at as follows: How will this change effect the company's "Goal"? (plus or minus)
5) If plus, then OK, if minus, then don't do it that way. Only change or tweak to the plus.
It can work, and for furniture stores, getting custom furniture is a real problem. I've been doing this for 20 years now, and have cut back selling to furniture stores. I'm going back into custom cabinets since there is more money in it.
If you're building furniture for furniture stores they will pay wholesale, period (even if the owner is your partner). They will mark it up 80% or higher and expect to pay not more than 5% more for a piece of furniture that is custom over one that can be ordered from stock. A custom piece can take 5 to 10 times as much time to build as something that is a production piece that can be built with cheap labour and in multiples of 50 to 100 or more.
If you're in a good economic area that has customers willing to pay for what they want, go for it. If there are a lot of stores selling the same products that you guys are planning on building it could be a struggle. Why not custom cabinets? I have dreamed for years of having a small furniture store to sell my upgrade custom furniture line but where I live it is not possible because of the competition from other stores in the area. We have thought about moving to a better location (not in Oregon). But we like our 5 acres, home and shop on the property, so a jump to custom cabinets is where we have to go.
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