Small Profitable Furniture Store


  • Asking Price: $220,000
  • Gross Income: $541,503
  • Cash Flow: $116,337
  • Real Estate: Not Disclosed
  • Inventory: $20,000
  • FF&E: $30,000
  • Listing ID: #219638
  • Established: 2002
  • Employees: 3 PT

Business Description

Overview - Store sells a variety of products, most are a specialty custom furniture pieces, they also carry some inventory at the store that is ready to take home that day, they also offer ancillary items for the home, rec rooms and bars. Their sales are split approximately at 70% custom furniture vs. 30% stock furniture. They are one of only a handful of companies that offer this type of custom furniture in the area.

The owners are a married couple that run the business together. They have a few part time employees that help with the sales floor. Since the majority of their sales are from custom products, they have low inventory compared to traditional large furniture retailers (with average inventory turnover at about 110 days). Customers either pay a deposit of 50-75% down or pay in full for their orders. Orders are typically received in 3-5 weeks. The business cash flow is very consistent.

Lifestyle - One of the owners puts in about 25-30 hours a week at the showroom. Owner 1 does the majority of sales and ordering. The second owner puts in about 25-30 hours a week as an assembler, repairman, delivery driver (to those customers who want delivery to their home). The owners take a considerable amount of vacation each year (8 weeks or so). They are closed on Sundays and holidays and holiday weekends (Memorial Day, 4th of July, Labor Day, Thanksgiving). You can set your own hours and enjoy flexibility in your life. They have great employees that help run the business while they are away.

COVID -19 Update - The store was closed for about 60 days mid-March until mid-May due to a state mandated closure due to the COVID-19 Pandemic. Sales are only down $14,345 from the prior year (YTD). They moved to an appointment only model to for having customers come in and shop. They reduced store hours to Monday - Saturday from 10am-4pm. There is a backlog of custom orders from the manufacturers due to shut-downs related to COVID-19. Lead times are now around 10-12 weeks for custom furniture.

2020 TTM (or Trailing 11 Months) - To put into perspective the impact that COVID had on the business this year, we took a look at the company revenues for the last eleven months that the business was actually open. For the past 11 out of 13 months they have been open, the SDE is $116,337 (or $10576.09/month). COVID shutdown the company for about 60 days from Mid-March thru Mid-May. Months counted in this Trailing Eleven Months are Nov 2019 - March 2020, and June 2020 thru November 2020 (April and May of 2020 were excluded).

Business Details

Primary Business Category: Retail Trade - Furniture & Home Furnishings
Location: Wisconsin

Company Information

Year Established: 2002
Home Based: No
Franchise: No
Relocatable: Yes
Number of Employees: 3 PT

Financial Information

Asking Price: $220,000
Gross Revenue: $541,503
Cash Flow: $116,337
FF&E: $30,000
Inventory: $20,000
Seller Financing Available: Yes

Property Information


They currently lease a 2500 square foot showroom with 500 square feet of warehouse space. The rent is $3000/month NNN (this included the CAM charges). They are on a month to month lease, the landlord is willing to sign a long term lease with options. This great business can also be relocated by the new ownership. The broker can assist a buyer with finding a new location. The rent is on par with the industry average of 7.1%. However, a new owner may be able to negotiate better terms considering the volatility in commercial real estate, due to the COVID-19 pandemic.

Growth & expansion opportunities:

The most glaring issue for the business was declining sales from 2017-2019. Part of this decline can be attributed to the owners reducing the time the business was open. Some of the decline can be attributed to the whole industry seeing in a decline in revenue over those years. The industry is forecasted to grow 3.3% a year until 2025 (see the Industry Outlook on page 7 in this document). A more aggressive advertising and marketing campaigns can drive more people to the storefront and drive more sales. According to IBIS World the industry average for advertising and marketing in this industry is 3.3% of revenue. The Company has only spent on average 1.06% of revenue on advertising and marketing from 2017-2019. They budgeted 2% spending on advertising in 2020. The fact that monthly average sales are up over 2019 could be attributed to this increase in spending. The current owners do not have the store open during peak buying times (early evenings and Sunday afternoons) or during some shopping holidays (Memorial Day, Fourth of July, and Labor Day). The buyer(s) will want to determine what hours and days to be open and if it is in their best interest to be open during these holidays.


IBISWorld expects revenue for the Furniture Stores industry to increase over the five years to 2024 as per capita disposable income rises. Rising demand for furniture will likely result in revenue growth but falling consumer confidence and increased competition will greatly constrain revenue and margin expansion. When fewer consumers buy homes, industry operators suffer because homeowners will not need to purchase furniture to outfit the home. Additionally, consumer confidence declines are expected to make consumers more hesitant to make big-ticket purchases in existing homes, constraining revenue growth. Consequently, over the five years to 2024, revenue is expected to rise at an annualized rate of 1.1% to $69.5 billion." - Source: IBISWorld Industry Outlook Executive Outlook - First Data Household furniture sales are closely linked to home sales; office furniture sales are linked to employment. Growth and new business formations. The profitability of furniture stores depends on merchandising and marketing. Large companies enjoy economies of scale in purchasing and distribution. Small companies can compete effectively by specializing. The US industry is fragmented: the 50 largest companies generate about 45% of revenue. Competing with Direct Sales from Manufacturers Some large furniture manufacturers have their own showrooms and sell directly to consumers, competing with retail stores. Such manufacturers generally don’t underprice their channel partners. Retail stores market their breadth of product offerings from multiple manufacturers and the services they provide, such as delivery. Adding Ancillary Products As profit margins erode, many companies have added complementary products that don’t require a lot of showroom space. While adding furniture lines is difficult, some companies have added various items such as accent pieces. These items generally turn quicker than higher-priced furniture, helping profitability. Source: First Research - Dun & Bradstreet

Reason for selling:

The business was opened in 2002 after the owners were down sized from their previous jobs. The husband and wife team used their experience in the furniture industry (wife) and sales (husband) to open a store that catered to this specific segment of the industry. The husband and wife would love to see another couple take over the business and grow it. They want to retire to spend more time with their grand children.

Support & Training:

Will train for 4 weeks @ no cost Local Competition There are a few other stores in the area that service this segment of the industry. There are two larger chain stores that offer similar products, but do not specialize in this segment of the industry. Their selection is more limited. There is another store that sells outdoor, indoor, and recreational furniture. They sell similar products as this company, but do not offer the same level of personal service and design help. Costco and Sam’s Club also sell some furniture in this segment; however, they only offer one or two styles and they are not available to custom order. Industry Outlook - IBISWorld expects revenue for the Furniture Stores industry to increase over the five years to 2025 as per capita disposable income rebounds. Pent up demand for furniture will likely result in revenue growth, but increased competition may somewhat constrain revenue and margin expansion. When fewer consumers buy homes, industry operators suffer because homeowners do not need to purchase furniture to outfit the home. However, expected increases in consumer confidence over the next five years are expected to make consumers more willing to make big-ticket purchases, boosting revenue growth. Consequently, revenue is expected to rise at an annualized rate of 3.3% to $69.4 billion over the five years to 2025. Mixed performance from demand drivers. Consumers are likely to make initial furniture purchases as the residential market grows over the next five years. IBISWorld expects per capita disposable income to rebound and grow during the outlook period. With more money in their pockets at the outset of a home purchase, consumers are more likely to make furniture purchases. As interest rates remain relatively low and more consumers gain access to financing, an increasing number of individuals are expected to purchase homes. As a result, the housing market is anticipated to expand and IBISWorld expects housing starts to grow during the outlook period. Therefore, demand for furniture in the residential market will likely grow. Additionally, the Consumer Confidence Index is forecast to increase an annualized 4.0% over the five years to 2025, despite a decrease of 13.5% in 2020 amid the COVID-19 (coronavirus) pandemic. As a result, consumers that have pushed off discretionary purchases in 2020 and 2021 will likely opt to make those purchases during the latter half of the period. Over the five years to 2020, many operators have lowered prices to compete with mounting competition. To motivate consumer spending over the coming years, companies will likely raise prices as demand is expected to increase as consumers purchase more industry products due to pent up demand. As a result, industry profit, measured as earnings before interest and taxes, are anticipated to increase to account for 4.3% of revenue in 2025. IBISWorld expects profit margin growth to be constrained as a result of strong external competition. The number of industry enterprises is expected to marginally increase, rising at an annualized rate of 1.1% to 29,049 operators over the five years to 2025. Industry employment is expected to increase at an annualized rate of 2.4% to 240,201 workers during the same period.” IBIS World Report August 2020 – Claire O’Connor

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Business Listed By:

Patrick McAdams

Murphy Business Brokers