How to start a homewares business

If you're a creative person with a passion for interior design, starting your own homewares store could be a great way to build a successful company. Whether you choose to operate in-person or online, here's how to kickstart your dream; from choosing a business structure, to marketing, and even what POS system to go with.

What is a homewares business?

A homewares business is a retail business that specialises in selling pieces for the home, such as furniture, textiles, ceramics and other home decors. It can be a physical store selling homeware products or an ecommerce store selling products online.

How to start a homewares business

Here are some of the essential steps involved in opening your homeware boutique:

1. Pick your niche. Homewares is a competitive market, so it's a good idea to pick a product or style and make it your starting point. For example, you could begin by opening an ecommerce store selling luxury linen bedding sets or homemade ceramics. Or you might specialise in selling ethical or environmentally friendly products.
2. Develop a business plan. Research competitors in the homewares market and write a business plan that sets out set-up costs and marketing strategies. To meet the set-up costs, you may also need to consider getting a small business loan.
3. Create a brand name and logo. In retail, it's essential to choose a business name that resonates with customers. Once you have picked a business name, check on the Australian Securities and Investments Commission (ASIC) website to make sure the name is available to use. For branding, it's also a good idea to have a logo that you can use for your physical or online store. Here are some graphic design tools and services to help you.
4. Find a physical store or build an online store. Decide if you want to sell your products from a physical store, an online store or a combination of both. A physical store will allow customers to "touch and feel" your products before buying them. However, it requires higher costs to cover rent, fit-outs, utilities and staff. An online store has much lower overheads, so you can keep your prices lower. However, you will need to build an ecommerce store that has all the information including product photographs, dimensions, materials and care instructions.
5. Choose the right structure for your business. A Sole Trader can be an easy and inexpensive way to set up a small business like a homewares store. However, if you want extra protection for your personal assets or you would like different ways to split profits, you may need to set your business up as a Company. We explain the pros and cons of the different business structures in further detail below.
6. Consider legal requirements. For a retail business, it's important to have legal documents to protect your business interests when dealing with customers, suppliers and employees. Useful documents for a homewares business include a Shipping Policy, Refund Policy and Wholesale Agreement.
7. Market your business. There are many ways to market your homewares store depending on your products and target market. If you're running your business from a physical store, you may want to invest in signage and visual merchandising to attract walk-in customers. If you're running an ecommerce business, you may want to invest in social media ads and list your products on marketplaces such as Etsy, eBay and Amazon.

Skills needed to start a homewares business

You don't need a formal qualification to open a homeware boutique, but you will need some business expertise. Here are some useful skills for running a homewares business:

• Interior design skills. While it's not essential to have a formal qualification in interior design, it's handy to have a good knowledge of different interior design styles and current market trends to help you with sourcing products, customer service and visual merchandising.
• Logistics and importing skills. When sourcing homeware products, it's important to have a good knowledge of shipping options and stock levels. If you're sourcing your products from overseas, you may need to work with local agents to negotiate on your behalf.
• Marketing skills. Whether you're running your business from a physical store or online, it helps to have good digital marketing skills to promote your products. You may have to outsource photography and graphic design.
• Business skills. Unless you're planning on outsourcing, it helps to have basic business skills such as bookkeeping and customer service.

You can find online courses to learn some of these skills on websites such as Skillshare or Udemy.

How to structure your homewares business

Deciding how to structure your business is an important first step as it changes how the business is run, how you split profits and what to do come tax time. These are the three most common business structures in Australia:

• Sole Trader. As a Sole Trader, you are legally responsible for all aspects of the business. This structure is relatively easy and inexpensive to set up, but your personal assets will be at risk if things go wrong and the business can't meet its debt obligations.
• Partnership. Starting a Partnership involves two or more individuals to run the business. Depending on the Partnership structure, partners in the business share all responsibilities, income and debts equally, or decide on a split based on investment.
• Company. A Company is owned by its shareholders, which can either be the directors or external investors. Setting up a Company is quite complicated, but can be a good option in terms of tax and liabilities.

Once you've decided on a structure for your homewares business, you will need to register for an Australian Business Number (ABN). You will also need to register your business name and set up a business bank account.

If your business earns over $75,000 a year, you will also need to register for goods and services tax (GST).

What products should I sell?

For opening a homewares business, it's important to stock good quality, on-trend homewares that are appropriately priced for your target market. Here are a few options to consider for your product range:

• Create your own products. You can create your own unique products either by hand or by designing it and having it manufactured. Consider what materials you require, how much they cost and how long the products will take to be designed and made. If you're making household textiles and furnishings, you will also want to make sure your products have appropriate care labelling instructions.
• Sourcing products. You can also choose to source products from third-parties. Find a wholesaler or manufacturer who will supply products to sell and work out your costs versus the profits you expect.
• Dropshipping. If you'd rather not deal with inventory and shipping yourself, then you might consider starting a homeware dropshipping business. As the selling merchant, you won't need to stock your own inventory, but will purchase inventory from a wholesaler or manufacturer to meet customer orders as needed.

Equipment and software needed to start a homewares business

If you are opening a physical shop, then you'll need items to display your products, as well as furniture for yourself and customers. This might include a counter, tables, chairs and shelving units. In terms of software, your physical shop will require a credit card processor to take payments from customers.

Other useful software for a homeware business can include:

• Web hosting
• Accounting software
• Inventory management software

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Do I need any legal advice and documents?

There are several legal documents that will be useful when running a homewares business. These may include:

For general advice on setting up your homewares business or specific legal issues you face, you might need to seek consultation from:

• Small business lawyers. They can advise you on general issues affecting small businesses, from what business structure to use, and the drafting and review of essential agreements and policies.
• Commercial lease lawyers. If you want to run your homewares business from a brick and mortar store, you will need to rent a commercial space. A commercial lease lawyer can help you go through the Lease Agreement and negotiate with the landlord.

You can make use of online legal services such as Sprintlaw, LawDepot if you require any advice or assistance.

How to find customers

Marketing your homewares business is an important step to attracting new customers. There are different ways to go about this, including:

Frequently asked questions

How much money do I need to start a homewares business?

How much money you need depends on what products you're going to sell and how you're setting up the business. Common startup costs for a homewares business include:

How can I get money to start my own business?

There are different ways to finance your startup. The first option is to bootstrap the company from your personal savings. However, if you need more money, you can consider alternative financing methods for your business.

How can I set my homewares business apart from competitors?

Homewares retail is a competitive space. To add value to customers' shopping experience, you could offer gift wrapping services, interior design and home organisation consultation in person or on video call, or offer courses such as pottery classes.