Cost of Business Startup?

[baileyuph]

How much should a new person to this business allow for start up cost?

I comment because it is waaaay more than the cost of a machine!

I am thinking somewhere from $10,000 up, this is for equipment and needed inventory.  Does not include purchasing real estate.

Machines, quite a number of machine attachments, button machines, foam cutting equipment, specialty hand tools plus standard hand tools.  Storage compartments, tables, lighting, endless supplies like threads, an assortment of welting, zipper, glue, foam and other padding and spring hanging/tying supplies and installation equipment.  Steamer for sure, and tax preparation requirements, on and on.

Then, advertising, phones, and bookkeeping supplies and depending on the work selected to do, a vehicle usually comes into play with insurance.

Sure makes my $10,000 estimate seem low doesn't it.  Actually, we have well over that invested in tools, for sure.

What do others think one realistically should budget for a new business start up, one that will be a means of making a living, not just for a hobby?

This could be interesting,

Doyle

I suppose

[mike802]

When I first went into business I invested a total of $3000.00.  Granted that was like 28 years ago, but I think it could still be done for under $6000.00, depending on where you live.  In my area everyone either owns a pick up, or knows someone who does, so a delivery vehicle was not a necessity for me.  Also, I had out buildings that I converted into shop space, so I saved on rent.  I built all my own tables, work benches, and signage. 

When I look back on those years I wonder how I ever got any customers, my shop looked like a converted out building and my work tables and signage looked hand made and hand painted, but my work was good and my prices were reasonable, at least by my customers standards and I did get customers, actually I had many customers and soon found myself the employer of three upholsters.   As my reputation grew I was able to charge more and improve my image with a delivery truck, professional sings and a professional looking shop.  I think many people make the mistake of thinking they have to look like the big guys and go way into debt buying things they dont necessarily have to have. 

Today I have all the fancy stuff, new truck and trailer, professional signage, a nice show room and a decedent web site and an ever growing collection of woodworking equipment.  I have more invested in the web site alone than my original $3000.00 in start up cost, but my customer base has shrunk and these days its just me with occasional help from my wife or one of my son's.  I am not complaining, my customer base has shrunk because I trimmed it down by pricing myself away from those only looking for a bargain towards towards those interested in quality and exclusivity.

So, I think an upholstery shop can still be put together on a shoe string if the owner is willing to work hard and let his, or her workmanship do the advertising.  Those early years will be lean and they will have to be willing to put in the 18 to 20 hour days luckily making minimum wage to build a reputation.  I think it comes down to the individual wanting to work for the man, the bank, or themselves.

[sofadoc]

It's a "catch-22". Yeah, if you really want to do it right, you better have 10 grand or more. And factoring in property, you could easily top 100K.

But if I were a young buck looking for a career to dive into, and I had 50 grand in my pocket, I probably wouldn't gamble it on this business.

Most people DO start this type of work on a shoestring. They keep their "day job" during the transition, and re-invest early profits back into the business until they're ready to go at it full-time.

I've always said that if my building burned down tomorrow, I could clear out my garage for a work space, and be up and running again by the end of the week for around $2000. Within 6 months, I'd be back into a commercial space.

[Mojo]

With everything that I currently have I could probably start up with less then $ 5,000.

This includes a new machine, tools, basic supplies, marketing materials ( rack cards, business cards, etc. ) and a web site. Of course I would be running it out of my home.

Chris

[JDUpholstery]

Well I like to say I started my upholstery business with 20 bucks...that is what I got my first sewing machine for...it wasn't the best machine and did not do everything it should have but it sewed a nice seam and got the work out, over the next year I went from working in my house on a 20 dollar machine to having a 2400 square foot shop, nice walking foot machine and a pile of customers....sometimes things just go the right way and you can start with nothing but a friendly smile, a line of bullshit, and some sucker willing to pay you to do something you dont know how to do, dont have the equipment to do....wow I sound bad dont I!

[bobbin]

I did a quick tally of the money I have invested in my business and it is easily in the 10K range.  Mind you, I've been at this game for over 30 yrs. now, though many of those years have been in more diverse areas of the needle trades than upholstery/marine canvas. 

With that in mind, it would behoove the reader to know that I have considerably more money tied up in specialized machinery than most upholstery shops do!  In my personal tally I included the prices of them (the full functions were purchased new, the others were "used").  All industrial machines:  5 thread overlock, blindstitch, button sewing machine, drop feed SN, rotary take up SN, needle feed SN (full function), walking foot SN (full function), dedicated "home machine" for buttonholes only.  I have a full array of presser feet and time saving attachments for all of the above machines; many of the attachments were custom made for the specific machine and operation. 

I have a fine assortment of thread in a variety of useful basic colors and weights that are suitable for each of the machines.  Thread is expensive and achieving a coordinated assortment within useful color requires a not inconsequential outlay of cash.  With all due respect to Gene, monomfilament is JUNK.  Esp. if you're planning to work in marine/awnings/exterior upholstery work.

My shop is pneumatic.  I have piped air from a very modest compressor, but the PVC pipe cost money, and the time I spent grunting it out beside my brother cost money, too.  I have a nice stapler and an assortment of staples in different sizes, both galvinized and stainless.  Stainless is big money but in the marine game it's the default setting, don't waste your time on galvy. 

Punches, dies, and the requisite stock for marine fittings and grommets all cost money.  You have to have a good pad/table and a mallet.  Hand tools only add more to the price of the basic tool kit.  I don't own any, they're too hard on my hands to operate. Snap tool! and the requisite hardware and the set tools you should have on your bench.  How about the button making machine and the different "blanks" for a nice variety of covered button options?!  I have put a lot of money into this entire  department in the past year. 

A laptop/tablet and the necessary book keeping software.  A book keeper if you aren't comfortable with the book keeping program (I recommend this!).  We haven't even touched on insurance, have we?  and most of all, we haven't mentioned the necessary "open to buy" required to have open billing with suppliers. 

Marketing? a website??  ($500 from a "pro.", minimum)

I still "work for the man".  I hate it, but the practical reality is that I have to!  I'm nicely "set up" to push away from the dock, but until the "outisde jobs" are more reliable than they are at present I don't have a lot of choice.  At least not if I wish to remain on the same keel I presently enjoy. 

10K? easy!

[gene]

Furniture upholstery: (Not exactly what I did, but what I think anyone could do.)

Sewing machine: $500
air compressor:    $ 75
staple gun:          $75
hand tools:        $100 (staple puller, pliers, mallet, glue gun, etc.)
cutting table:     $100

Buy the inventory as you need it: $???

Under $2000 easy.

This is not the type of business that someone would want to make a big investment in. The plus is that there aren't many new upholsterers coming into the business. The negative is that there is a decreasing demand for re-upholstery.

[Mojo]

I would be amiss if I didn't say this for people who are starting out. Pay cash. Do not get a loan for equipment.

Your early years are going to leave you starving and loan payments could end up killing you. So unlike other businesses save your pennies and pay cash for your startup. It will be one less headache you have to worry about.

Chris

[sofadoc]

I think that most people who dive off into this business do pay cash. Mainly because I don't know of any bank that is going to loan 10's of thousands for someone to start up an upholstery business.

While Doyle's estimate might be ideal, I think that Gene's is realistically the norm.

[JDUpholstery]

Like Gene said about order what you need when you need it...

I always have customers pay for material costs up front, I order what they need after they pay for it so that I don't risk footing the bill if they back out...I figure lost labor can be made up for by selling the item if they don't pick it up within 60 days, but selling it for material plus labor seems less likely...you can start up with nothing, as long as you already have basic hand tools that most people have in their garage and a compressor/staple gun...just have the customers pay in advance so you have no out of pocket expenses

[Mojo]

I stock alot of fabric. Just got another new roll in today from Miami. I buy half ( 30 yards ) or full rolls ( 65 yds ) at a time in Sattler acrylic. I use certain colors constantly and Miami gives price breaks when buying in large quantities. But for the most part I buy bulk because I want the fabric on hand and ready to go when I get an order. I do get breaks on shipping costs by ordering in large quantities. My shipments cost me $ 10 regardless of the weight when it is shipped out of Jacksonville by courier. That savings helps my margins.

I stock standard vinyl colors as well but in very small quantities. I use very little of that and most of it I use for mirror covers. I always keep a back up spool of Solarfix on hand as well. I have a roll of Textilene on hand as well for solar screen orders and keep 100 yards of acrylic binding on hand for the solar screens. I have several rolls of binding in other colors for when I
am making Omega awnings.

Of course I keep snaps, screw studs, etc. on hand as well. Other then that I order as I go. I am sure it is hard for furniture guys and others to stock large quantities of fabric like I do since the fabric colors and choices are changing with each job. I typically use 5 color combinations and the OEM color Heather Beige is my big seller. Probably 70 % of my orders are in this color which is why I am always buying full rolls of this color fabric. Miami is very good about keeping their Jacksonville warehouse stocked with the fabric colors I need.

Do marine people stock acrylics or canvas ? Isn't it impossible for you furniture or auto trim guys to stock any fabrics ?

Chris 

[JDUpholstery]

There are so many vinyl choices it is hard to just stock them....even whites/blacks have variations so one customer might want white, another off white, another arctic frost or snow white, I could not afford to have it just lying around the shop unused...I could see in your line of work stocking popular colors, helps with bottom line and faster turn around times!

[sofadoc]

Isn't it impossible for you furniture or auto trim guys to stock any fabrics ?

I used to buy a few close-outs. But they only attract budget customers, so I would end up not making any more money than I would off of a COM customer. Now, I only stock a few basic color vinyls  for beauty shops, restaurant booths, etc.

You're right. It would be impossible to stock a wide selection of furniture fabrics.
I'm more into stocking foam. Foam replacement is a big part of my business.

[baileyuph]

In auto trim work, it makes good business to stock original materials for the most popular selling cars.  It is good marketing to have on hand what is needed, plus the availability of original auto fabrics is a problem over a short time.  Actually, to insure availability, a shop almost has to buy ahead of he market.  We have had near new cars needing original fabric for repairs but none available.   Generally speaking, once it is all sold, there usually will not be anymore.

In marine seating, we stock materials for that market.  Generally, customers wait
to have it done but want it for the weekend.  

If I have it, easier to sell and get the price the shop needs.

Doyle

[Mojo]

Speaking of stocking foam, I need to cut back on that portion of my inventory. I am out of storage space. So I am going to take some of the scraps I have around of fabric and make some dog beds for the local SPCA.

Miami had a big sale with free shipping a while back so I bought some foam. Now it looks like I wont be using it after all so I would like to put it to good use. 

I have gotten stupid with stocking some inventory. :)

Chris