Most people don’t know how to build their home décor business plan. If you’ve got a knack for things like that, you should read this guide on how to start a home decor business till the end. The home décor business industry will cross a market cap of $800B in the next 2-3 years.
According to a report, the gross profit margin on an average home décor business is 32%. This means, in this economy starting a home décor business is the right choice. The best part of starting the business is that you can do it part-time till you have a solid footing for a full-fledged business.
Pros and Cons of Starting a Home Decor Business
No business is perfect, all of them have their own set of advantages and drawbacks. Before learning how to start a home décor business, it would do you well to weigh the pros and cons of the business.
Pros of a Home Decor Business:
- Can start the business from the comfort of your home. Having a physical office space is not a necessity. During the baby steps of your business, you can cut down on expenses by working from home.
- The business build time is incredibly low, you can set up your whole business in under a year with the right investment.
- Great niche options. As someone who’s just starting their business, having multiple options can do wonders.
- In this particular industry, the customers appreciate the work and are low maintenance. This can be great if you’re doing this as a part-time business.
Cons of a Home Decor Business:
- As the industry has a huge market share, the competition is incredibly high. It is suitable to build a home decor business plan after analyzing the industry trends.
- Finding the ideal supplier is one of the biggest challenges.
- The right supplier can help you save a lot of time and effort during business operations.
- Finding the perfect niche for your business can be exhausting.
- The overheard expenses can enough to run your business to the ground, the right planning and strategy can change that.
- The work is not always about huge mansions or corporate offices. You may have to get your hands dirty at times for specific projects.
What Tools Are Essential for Starting a Home Decor Business?
Just learning how to start an online home decor business isn’t enough, you need a full-fledged home decor business plan. One of the main questions that everyone asks themselves before starting the business is “What does home decor include?” There are a number of requirements that need to be fulfilled before starting the business. Here are some tools necessary to start a home décor business:
A Solid Business Plan
List down the steps for your decorating business. Figure out what kind of business you want to be in, whether you’ll be a product-driven business or a consultant that can help people fulfill their goals. This move is the steppingstone for the rest of your business operations.
Business Yield has a very good article on home décor business blueprint.
Licenses and Registrations
It’s not possible to start a business without a business license. Visit your local city hall or government body’s office and submit your application. If the process can be done online, do that and save your time and effort. If you’re planning to hire people for help then you’ll also need to apply for an Employer Identification Number.
- Common Office Tools
Apart from the tools you’ll need to build the home décor products, you’ll need a variety of office tools. Based on your office location, these tools will differ. Here is a list of the most common tools:
- An official business contact number
- A business website
- Reliable internet connectivity
- Office supplies (if applicable)
- Employee insurances (if applicable)
How Much Does it Cost to Start a Home Decor Business?
Your first question before starting the business is “how much does it cost to start a home decor business?”. You should know that the cost for starting the business is relatively low if you decide to start with limited expenses. If you’re planning to kickstart the business with a huge team then obviously your costs will increase.
The start-up costs can range from $7,000 – $80,000 depending on how large you want your business operations to be. Here are the most basic costs required for starting a small-scale home décor business:
- Rent: $0 – $2,000
- Utility Costs: $25 – $1,000
- Office Supplies: $25 – $1,000
- Salaries (if applicable)
- Employee rewards (if applicable)
- Tools and Equipment costs: $500 – $5,000
- Legal permits and business licenses: $50 – $700
- Advertising costs: Minimum cost is $100
The cost breakdown above is for starting a home décor business right from the comfort of your home. If you have been saving funds for a long time and start a huge business operation, your expenses will grow tenfold. Having a start-up cost is not enough, you will also need to have working capital for at least 3-6 months.
How Do You Prepare For Launching a Home Decor Business?
Now that you’ve learned how to start a home decor business, it’s time to scale up your business. There are multiple things you need to do before officially launching your business. Things that you need to prepare before scaling your business are:
Thorough Market Research
Home décor is a highly competitive industry, and it can be a major mistake to step into the industry without having enough knowledge. Starting your own business is a huge investment and going in blindly will cause you to bleed money.
Doing market research is crucial for knowing who you are competing against, learning industry trends and what practices you need to follow to keep customers happy. You can build your social media marketing strategy, business plan, and other important strategies by closely following your competitor’s steps.
Giving Your Business an Identity
There are some businesses out there whose names are their whole marketing strategy. A business name is more than just a name, it can convert your business into a well-known brand name. Deciding on a business name is essential before the official launch of your business.
You need to pick a business name that defines who you are and what you have to offer. A business name should always be catchy and easy to remember. A name that’s too long and too hard to remember can’t be converted into a brand name. You also need to make sure that any other business doesn’t have the same name. Based on the name, you also need to have a catchy logo developed.
Choosing the Ideal Niche
The home décor industry is vast, there’s tons of competition, and growing at the rate you want can be tough. The specializing niche can help you grow at a much faster rate. There are two main niches in the home décor business, and you can specialize in either one of them. The two key niches are online business and offline business. Here is a breakdown of a business niche that may help you choose:
Online Home Decor Business:
Home décor businesses are slowly turning towards e-commerce channels to sell the products. A lot of companies have chosen to launch their businesses using digital methods to reduce costs like staff, electricity bills, and additional taxes. You can use the saved costs to reduce the prices of your product which can help you gain a wider audience. To start your online home décor business you will need to have a website, shipping service, installation service.
Offline Home Décor Business:
The second niche is to start an offline home décor business. The major requirement of the business is to choose a hip and happening location so you can have more and more foot traffic. While online niche sounds better, a lot of people choose to start the business offline. The expenses will obviously be more but the profit margin makes up for it. You need to take care of “manufacturers, location, warehouse, staff, etc” to grow the business.
Choosing Your Target Market
The next step in preparing to launch your business is to choose your target market. The target markets are separated into four sections that you can divide into age groups.
- The first target market is made up of women in the age group of 35 – 50. These women have their condos and are usually looking for new changes. You can make huge profits by specializing in this particular market.
- The second target market consists of 50 – 65 looking for a positive change in their environment. These people are usually changing their homes or remodelling based on a retirement plan. This target market can be a great option for you as well.
- Another target market is a huge profit area. It is made up of couples between the ages of 25 – 30 who are building their first home. Usually, they have a lot of disposable income which will work well in your favor as you can build profits.
- The last target market you can look into is professional home builders. They usually need a home décor specialist by their side, if you can find someone in that particular market, you can have huge profits easily.
Building the Perfect Skillset
Home décor is a skill-based business and to successfully run and operate your business, you will need a wide range of skillset. These skills can include learning how to build your products or how to manage a team of employees.
If you don’t have the skillset for building a home décor business from the ground up and run it successfully. The right step is to work under any of the home décor businesses in your area. You can learn all the necessary skills such as HR, Accounting, Employee management, and Marketing. Once you acquire all the necessary skills, you can start your own business.
Sourcing Raw Materials
Home décor business is all about the products you make and the products you sell. Before launching the business, you need to find the right supplier. The right supplier can easily improve your overall business operations. You can source raw materials in multiple ways:
Setting up Your Price Structure
Learning how to start a home decor business? The way you price your products makes all the difference. The market research you’ve done before will help you determine the price of specific products.
If your products are more expensive than your competitors then it is almost impossible to survive in the market. If you price your products too cheaply, then the customers will think that you’re cutting costs on the quality of products. The perfect product pricing strategy, can help your business gain popularity and grow your business in the competitive market.
Do You Need Office Space?
One of the major things that you need to prepare for is if you need an office space or if you can manage your business from your home? If you’re starting small, then you won’t need to rent an office space and increase your expenses by a lot.
However, if it is your plan to go full scale with a team of employees, then you’ll need to rent an office space. Your office space should be in the right location which will help in bringing a lot of foot traffic. It should be near your home, and it should be able aesthetically pleasing to your customers who walk into your business.
Arranging the Funds
You can’t launch the business without enough start-up capital and working capital for a few months. A lot of businesses don’t bring in any profit in the first few months. You will need to arrange the funds to maintain your business.
You can ask your family and friends for the funds as it is the easiest way to arrange the money. Your costs will increase based on the size of your business. You need to arrange the funds before jumping into the business. If you can’t ask for money from your friends and families, then you can get a loan from your nearest bank. Home décor is a highly profitable business and the loan can be paid off easily.
Do You Need to Hire a Team?
Based on the type of business you wish to start, your need for manpower will change. So now the question is, do you need to hire a team? If yes, how big of a team? Before you hire a team, you need to figure out the expenses that will increase by hiring a team.
If you don’t have the money to hire a full-time team, you can hire a bunch of freelance workers for you. Hiring a part-time team can help you reduce costs on worker’s insurance, payroll, safety standards, etc. If you’re going to working from home, then you can do most of the work by yourself. You can hire the workers for most of the work that you aren’t able to do.
Challenges You Can Face While Starting a Home Décor Business
Learning how to start a home decor business is tough but the industry is vast and it is profitable which makes it an ideal business idea. However, there are a variety of challenges you can face while starting a home décor business.
Arranging the funds and finding the supplier for your business are two of the biggest challenges. However you can arrange funds from a variety of sources, and you can follow your competitors for the ideal supplier. Each business has challenges but the industry market cap on the home décor industry makes it worthwhile to face the challenges and go through the business.
Your business success is directly related to the money you invest in the initial period. However, that doesn’t mean that the small-scale home décor business won’t be successful. You can start small and grow in the first year of the business by investing in the profits you earn.
Conclusion: How To Start A Home Decor Business
In the end, a home décor business is about your passion for decorating places into something that looks aesthetically pleasing. The industry will grow a lot in the upcoming years, which means it is the right time to make your way into the industry. You can try new methods to improve your newly started business
Follow the step-by-step guide on how to start a home décor business. The first step is to build a business plan, understand how the market works, arrange the tools and the funds and make sure to keep the business going for a few months. You can work either online or offline based on your business niche, whichever one suits your timings best.
FAQs:
- Is the home décor business profitable?
The home décor industry will cross the $800B market cap in the next 3-4 years. The gross profit margin is more than 30% so basically, the home décor business is incredibly profitable. Dedicate the right time and resources and you can build a highly successful business.
- What marketing channels you should employ for the home décor business?
To start your home décor business, you can use a variety of both online and offline marketing channels. You can build your website to gain extra traffic and a chance of extra business opportunities.