Start an upholstery business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your upholstery business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an upholstery business?
The startup expenses for an upholstery business are fairly minimal. Business owners need a workspace and tools, and many have a vehicle for transporting furniture to and from client’s sites.
Many business owners keep their upfront costs low by using a workspace in their home, and a van or SUV they already have for transporting furniture. When setting up a workspace, it’s important to keep the space on the ground level (i.e. not in a basement or attic) so that items don’t have to be carried up or down stairs. When choosing a vehicle, it’s important to have a large and covered vehicle (i.e. not an open pickup truck) so items can be safely transported even if it’s raining or snowing.
The tools that are required include:
- general tools (e.g. screwdrivers, hex wrenches, a hammer and a cordless drill)
- commonly available tools (e.g. an electric carver’s knife for cutting foam)
- specialized tools (e.g. a gooseneck webbing stretcher, upholstery shears, upholsterer’s pins and marking chalk)
Business owners may already have a number of the tools they need, and additional tools typically cost only a few hundred dollars. For example, Upholster.com offers kits of specialized tools for between $78.80 and $145.80.
Finally, business owners also will need samples of fabric to show customers. These can be obtained from a fabric representative for free, though.
What are the ongoing expenses for an upholstery business?
As long as business owners have a workspace in their home, the ongoing expenses for an upholstery business are low. Business owners must cover their vehicle’s fuel and maintenance costs, and they may occasionally need to replace a broken tool.
Business owners must also need to purchase any fabric and cushioning that jobs require. These costs, however, are paid for by customers.
Who is the target market?
An upholstery business’ ideal customer is someone who has high-quality, expensive furniture.
People who buy low-priced furniture will frequently buy new furniture when their current chairs and sofas wear out. Since reupholstering pieces frequently costs about the same as new budget-friendly furniture, they’re less likely to have worn-out pieces reupholstered.
People who have expensive furniture, however, are often willing to pay to have their pieces reupholstered when the upholstery wears out. Reupholstering is often much cheaper than purchasing a new high-end piece of furniture.
How does an upholstery business make money?
An upholstery business charges customers for reupholstering their worn-out furniture. Work may be charged on a per-piece basis or according to an hourly wage.
How much can you charge customers?
According to HomeAdvisor, the average furniture upholstery job costs $648, but how much a job actually costs can vary a lot. Reupholstering a single dining room chair may be just $40, while reupholstering a big sofa can run $1,200.
How much profit can an upholstery business make?
How much upholsterers make varies depending on their location and level of expertise. One 30-year veteran of the industry reports charging customers $44 per hour of “bench time” (hour of labor).
Running an upholstery business involves a lot more than reupholstering furniture, though. Another upholsterer reports that only one-third to one-half of his time is spent working at his bench. Based on these two figures, an upholstery business owner might expect to earn between $586 and $880 per 40-hour week.
How can you make your business more profitable?
An upholstery business can increase its profitability by upcycling used furniture. Worn-out furniture can sometimes be found for free, reupholstered and then sold at a significant profit.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your upholstery business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an upholstery business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Upholstery businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your upholstery business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
An upholstery business can be run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease office space:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to an upholstery business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build office space:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for you business’ location to ensure your upholstery business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market an upholstery business
Because upholstery businesses generally serve a defined geographic area, all marketing efforts should be focused on the city or region that a business serves. Business owners can advertise their upholstery business to area residents and businesses by:
- running locally targeted online ad campaigns
- posting business cards on community bulletin boards
- placing advertisements in local newspapers and magazines
How to keep customers coming back
An upholstery business can set itself apart from other businesses in the area by specializing in a specific type of upholstery. In commercial upholstery, the health care, sports and hospitality niches represent growing opportunities. Businesses that want to specialize but work in the residential upholstery space can focus on automotive or marine upholstery.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start an Upholstery Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
Anyone who enjoys working with their hands may enjoy running an upholstery business. Reupholstering furniture is hands-on work that results in a tangible finished product.
Business owners don’t need to leave their current occupation to start an upholstery business. Furniture can be reupholstered and repaired during the evenings and weekends, which lets business owners start an upholstery business part-time while working another job.
What happens during a typical day at an upholstery business?
Upholstery business owners spend a lot of their time reupholstering furniture. This may involve:
- removing cushioning and fabric from existing furniture
- cutting and installing new cushioning and fabric
- making minor repairs as needed
When not working directly on furniture, business owners spend time:
- providing estimates for prospective clients
- picking up and delivering clients’ furniture
- ordering supplies
- paying bills
- marketing their business
What are some skills and experiences that will help you build a successful upholstery business?
In order to run an upholstery business, business owners must know how to upholster furniture. There are several ways to learn these skills.
First, many local community groups and vocational schools offer on-site classes and workshops. For example, The Elliott School in Massachusetts and Portside Arts Center in Philadelphia both offer courses.
Finally, there are a number of books on upholstery. Spruce: A Step-by-Step Guide to Upholstery and Design, and Upholstery: A Complete Course are a couple to begin with.
What is the growth potential for an upholstery business?
Most upholstery businesses serve a single geographic area. This may be a city or a larger region depending on the area’s population density. However, if your business grows a large enough, there is the possibility to serve multiple locations.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting an upholstery business?
While business owners must know how to upholster furniture to start an upholstery business, they don’t need to be masters of the trade. Because reupholstering is usually done in a workshop, customers don’t see pieces mid-project. Thus, upholsterers can fix mistakes they might make without customers ever knowing.
Additionally, some customers may be interested in hiring an upholsterer who’s still learning the trade if they can save money. New upholsterers may be able to learn while working by underbidding their competitors.
How and when to build a team
Many upholsterers never hire an employee, instead running their business themselves. Those who want to grow their business beyond what a single person can manage may hire an assistant once their incoming revenue supports an employee’s salary.