Should you start a Furniture Store Business?

#businessideas #sidehustle #entrepreneur
In this Business Idea Breakdown, I review a Furniture Store Business. I gave this business a 5.4 out of 10 because of the following:

Can it be scaled? Yes, by adding locations, employees, and moving to a larger store. The issue with the way you scale a furniture store is that each scaling activity requires another capital expenditure.

Is it Profitable? The average profit mark up from wholesale pricing is 20-50%. Using an average of 30%, that means that for every $100K in sales, you should profit $35K. This would require you to spend $65K in furniture inventory.
Using the Per SQFT Mindset for our calculations, see below:
-- Average Sales per SQFT for the industry: $200
-- Average Profit Margin: 35%
-- Furniture Profit Per SQFT: $70
Cost Per SQFT for Building Lease: $18-$25 for retail, use average of $20.
$70 - $20 = $50 in Gross Profit Per SQFT.
3,000 SQFT * $50 = $150K in profit.
To get $150K in profit, you would have $428k in sales, $278K in costs.

Is it easy to start? You will need capital, a building lease, and a wholesale furniture relationship to be successful in this business.

Time requirement: This would require you to be full time to manage this business to get it to run successfully.

Challenges: Sitting on inventory that won't sell, Finding good employees, No reoccurring revenue.

Sellable: 1-1.5X net income.

The reason I gave this a low score is because I don't like the non-reoccurring revenue, sunk costs in inventory, and this business can be slowed down by the economy.