Value Drivers for a Furniture Store
The furniture store industry has a low market share concentration. With only 19 percent of the revenue generated by major players, there is plenty of room for small furniture stores to succeed. With that said, the furniture store industry is very competitive. In coming years, consumer demand for furniture will likely increase. This is due to expected growth in the residential market, a rise in income, and increased customer confidence. By understanding the below key value drivers for a furniture store, you can stay competitive and increase the value of a furniture store.
Whether you are looking to buy, grow, or sell, it is important to understand the fair market value of a furniture store. Obtaining a business valuation is a great place to start. During a business valuation, we analyze key value drivers for a furniture store and examine the strengths and weaknesses of your store. With this information, you will be able to increase the value of a furniture store.
Peak Business Valuation, business appraiser, is happy to provide a business valuation for a furniture store. We can also answer any questions you have on valuing a furniture store. For more advice, schedule a free consultation below!
Key Value Drivers for a Furniture Store
This article discusses several value drivers for a furniture store. For more information, read Valuing a Furniture Store. If you want to better understand the value of a furniture store, obtain a business valuation. Peak Business Valuation, business appraiser, works with furniture stores around the country providing business appraisals. We are here to help you understand how to maximize the value of a furniture store. Schedule a free consultation to get started!
Location
The success of a furniture store is largely dependent on its location. An industry report on IBIS World estimates that 95 percent of industry revenue comes from households and individual consumers. Locating your furniture store near large clusters of households can increase the likelihood of more consumer traffic. This can lead to an increase in sales revenue.
In addition, some furniture stores choose to manufacture their own products. If this is the case for your furniture store, it is important to consider your proximity to timberland. Locating near production resources and/or manufacturers can help reduce transportation and shipping costs. Increasing revenue and reducing costs improve profitability ratios.
Pricing
Next, pricing plays a large role in maximizing the value of a furniture store. Because this industry is very fragmented, competition is often price-based. If you want to out-sell competitors, you need to provide the best products for the best price. Over or under-pricing products can be detrimental to a furniture store.
What is the brand of the product you are selling? If it is your own, what are the material and labor costs? Are you seeking to appeal to a high-end or low-end market? These are important things to think about when determining your pricing strategy.
There are several other factors to consider when pricing your products. Peak Business Valuation, business appraiser, considers your pricing methods and strategy during a business valuation. By working with us, you can maximize the value of a furniture store to help out-sell your competitors.
Revenue Streams
Another important value driver for a furniture store is expanding revenue streams. Having various revenue streams will provide more opportunities for sales. The most profitable products in this industry are living room, dining room, and bedroom furniture. By including these products in your furniture store you can serve a large audience. Other products to consider include office furniture, outdoor furniture, and furniture cleaning products, among others.
Having a variety of quality products has a major impact on the value of a furniture store. When a business appraiser at Peak Business Valuation is valuing a furniture store they will consider your revenue streams and their profitability. They then compare these to similar furniture stores and industry averages. To learn more, schedule a free consultation!
Experienced Workforce
Next, having an experienced workforce comes with many benefits. For starters, customer service is very important in a furniture store. Hiring individuals who work well with customers will increase customer satisfaction. This is good for branding and it will boost customer loyalty.
It is also important to have employees who are knowledgeable in interior design. When purchasing furniture, customers prefer to see products in an environment that resembles a home or office. Skilled employees can design your store to showcase products in these settings. These individuals will also be able to answer customer questions about interior design. A quality team is key to maximizing sales. At Peak Business Valuation, business appraiser, we understand the value of having an experienced workforce. By receiving a business valuation, you can understand the strength of your team.
Online Presence
On a final note, a strong online presence plays an important role in the success of your furniture store. When customers are looking for a furniture store, the first place they will look is online. Having a website or Google My Business page makes your furniture store more discoverable by online customers. By using SEO marketing you can expand your online presence to amplify this effect. Many furniture stores have success by creating social media pages and campaigns, seeking customer reviews, and creating customer loyalty programs. In the long run, this will lead to increased sales revenue.
In recent years, online revenue in the furniture store has seen a drastic incline. As such, having a robust website with easy access for consumers to make purchases can make this an extremely valuable revenue stream for a furniture store. A business appraiser considers your online presence and reputation during a business valuation for a furniture store. For additional ideas, read The Value of SEO.
Summary
Utilizing the above key value drivers for a furniture store can help you maximize the value of a furniture store. A business appraiser considers these and more when determining a furniture store’s worth. Receiving a business valuation will provide you with more in-depth guidance. It also examines your strengths and weaknesses to help determine your next steps.
Peak Business Valuation, business appraiser, is happy to help determine the fair market value of a furniture store. We can also answer questions about Valuing a Furniture Store. Start today by scheduling a free consultation!
See also Valuing a Furniture Store, How to Value a Furniture Store, and Valuation Multiples for a Furniture Store.
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