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Key Takeaways
- Initial monthly running costs for a furniture refinishing business are projected to average between $14,700 and $18,000 before factoring in variable materials.
- The business faces a 14-month runway until its projected breakeven in February 2027, necessitating a substantial initial cash buffer to cover negative EBITDA.
- Payroll ($125,500 annually) and workshop rent ($2,500 monthly) are identified as the two largest fixed cost drivers requiring immediate scrutiny.
- Profitability acceleration depends on strict control over variable operating expenses (Transportation and Marketing) and maximizing throughput of high-margin items like Dining Sets.
Running Cost 1 : Workshop Rent
Rent as Overhead Anchor
Your dedicated workshop rent sets a firm baseline for overhead costs in this furniture refinishing business. Expect $2,500 per month, hitting $30,000 annually, which you must cover before seeing profit. This fixed cost dictates your minimum required project volume to stay afloat.
Detailing Fixed Space Costs
This $2,500 monthly payment secures the physical location needed for stripping, repairing, and applying finishes. It’s a non-negotiable fixed operating expense, separate from variable costs like materials or transportation. You need to budget this $30,000 annual figure right away to understand your true burn rate.
- Covers dedicated refinishing space.
- Fixed at $2,500/month.
- Anchors total overhead structure.
Managing Space Expense
Since rent is fixed, managing it means maximizing the utilization of the space you pay for every day. Avoid signing long leases until volume is proven, and look for shared industrial space initially if possible. A common mistake is overpaying for square footage too early in the growth cycle.
- Prioritize space efficiency always.
- Avoid multi-year deals early on.
- Benchmark against local industrial rates.
Rent's Impact on Projects
Because rent is fixed at $30,000 yearly, every project completed above break-even contributes heavily to your margin. If you only complete 10 dresser refinishes monthly, this $2,500 still needs covering, so project volume density matters more than average order value here.
Running Cost 2 : Payroll Expenses
2026 Payroll Snapshot
Your 2026 payroll budget is set at $125,500 for 25 FTEs. This includes the Owner drawing $60,000 and Skilled Artisan 1 earning $48,000 annually. This wage load is a major fixed operating cost you must cover before factoring in materials or delivery fees.
Payroll Cost Inputs
Payroll Expenses are a fixed cost covering 25 Full-Time Equivalents (FTEs) projected for 2026. This estimate needs to cover base wages, plus employer taxes and benefits which aren't explicitly detailed here. This $125,500 figure sits alongside $30,000 in rent as your primary overhead burden.
- Owner salary: $60,000
- Artisan 1 salary: $48,000
- Remaining staff wages: $17,500
Managing Headcount Costs
Scaling headcount too fast is a common founder mistake that crushes early cash flow. For this Furniture Refinishing business, ensure the 25 FTEs are fully utilized by matching labor capacity to project volume. If you can delay hiring the final 23 staff until job density supports it, you save significant overhead.
- Tie hiring to confirmed project backlogs.
- Use contract labor for peak volume spikes.
- Review the $48,000 artisan wage benchmark.
Key Wage Concentration
The $108,000 combined salary for the Owner and Skilled Artisan 1 represents about 86% of the total $125,500 wage bill. This concentration means operational efficiency hinges entirely on maximizing the output from these two key roles first.
Running Cost 3 : Direct Materials COGS
Unit Cost Variance
Direct Materials Cost of Goods Sold (COGS) isn't uniform across projects. A Dresser Refinish costs $6,100 in direct materials, but a Dining Set Refinish jumps to $12,600. This massive difference dictates pricing strategy and margin analysis per job type; you've got to price for complexity.
Covering Refinish Inputs
Know exactly what goes into the unit cost estimate for each job type. The $6,100 Dresser cost covers materials, sanding, coating, hardware, and packaging. Accurate tracking requires itemizing these inputs per job complexity to set profittable project prices.
- Dresser materials cost: $6,100
- Dining Set materials cost: $12,600
- Inputs: Sanding, coating, hardware, packaging
Managing Material Spend
Managing this cost means standardizing material kits for common jobs. Negotiate bulk pricing for high-volume items like standard coatings or hardware across all $6,100 and $12,600 jobs. Avoid scope creep, which inflates costs past the quoted price.
- Bulk purchase coatings
- Standardize hardware kits
- Lock in supplier pricing
Margin Check
Since COGS varies so widely, your gross margin per project will be inconsistent. If the Dining Set refinish has the same markup as the Dresser, you risk low profitability on complex jobs. Review the $6,100 versus $12,600 spread closely.
Running Cost 4 : Transportation
Transportation Cost Warning
Transportation costs for pickup and delivery are budgeted to consume 60% of total revenue in 2026. This high percentage means that operational efficiency in logistics directly dictates profitability for Heirloom Revived.
Cost Inputs
This variable expense covers all logistics: getting the furniture from the client to the workshop and back after refinishing. To estimate the actual dollar amount, you must multiply projected 2026 revenue by 60%. This dwarfs other variable costs like materials.
- Inputs: Total 2026 Revenue projection.
- Calculation: Revenue x 0.60.
- Impact: Largest variable cost component.
Optimization Levers
Since this cost is tied directly to revenue volume, you must aggressively optimize routes to lower the cost per job. Every inefficient stop adds to that 60% burden. If you don't map efficient zones, this cost will crush margins, defintely.
- Focus on density per geographic zone.
- Batch pickups and deliveries together.
- Negotiate carrier rates based on volume.
Actionable Focus
If your initial route planning fails, expect this 60% allocation to balloon quickly, pushing the business far past break-even, even if project pricing is adequate. Tight route optimization is the primary lever to control this expense.
Running Cost 5 : Utilities
Utility Cost Structure
Utilities split into a fixed base cost and a small variable project fee. You must budget for $700 per month in fixed operational utilities, plus a 0.3% surcharge applied to every refinishing job revenue. This structure means your base utility cost stays steady regardless of volume, but high sales increase the variable portion slightly.
Cost Breakdown
The fixed $700 monthly covers essential shop utilities like electricity for sanders, gas for curing ovens, and water for cleaning prep. This cost is part of your overhead, separate from the 0.3% utility surcharge added directly to project pricing. This structure clearly separates baseline facility needs from job-specific consumption.
- Fixed cost covers shop operations.
- Variable fee is tied to revenue.
- Surcharge is 0.3% of project price.
Managing Usage
Managing this cost means focusing on the fixed component first, as the 0.3% surcharge is small. Optimize fixed costs by using energy-efficient equipment in your workshop, especially for high-draw items like spray booths. A common mistake is forgetting to track the variable surcharge against actual project revenue for accurate COGS reporting, defintely.
- Benchmark fixed utilities against rent.
- Upgrade older, inefficient machinery.
- Ensure surcharge calculation is automated.
Overhead Check
Since the fixed utility cost is $700/month, compare this against your $2,500 workshop rent. If utilities creep up significantly past $700 consistently, you need to investigate usage patterns immediately. Remember, this fixed cost is independent of your $125,500 annual payroll budget.
Running Cost 6 : Marketing & Ads
Marketing Lever
Marketing is budgeted high at 40% of revenue for 2026 to fuel initial customer acquisition for Heirloom Revived. Know that this percentage is the first place to cut if your cash runway shortens unexpectedly. It’s a direct trade-off: lower spend means slower growth.
Acquisition Cost Basis
This 40% allocation covers all customer acquisition costs (CAC). To calculate the dollar amount, you multiply projected 2026 revenue by 0.40. This spend funds initial brand awareness and project leads needed to hit volume targets. It is a critical variable cost tied directly to sales goals.
- Input: 2026 Revenue Projection
- Calculation: Revenue x 0.40
- Purpose: Fund initial lead volume
Managing Ad Spend
Reducing this spend below 40% requires immediate focus on customer retention and referral loops. High initial spend is expected, but look for ways to lower Cost Per Acquisition (CPA) quickly. If you can get interior designers to refer clients, you cut paid channel dependency fast.
- Benchmark: Track CPA vs. Project Value
- Tactic: Prioritize organic designer leads
- Warning: Don't cut too deep too soon
Cash Flow Control
If cash flow tightens before Q3 2026, immediately review your media mix effectiveness. A 10% reduction in ad spend might save significant dollars, but it must be weighed against the resulting drop in new project volume. This is defintely your primary variable expense lever.
Running Cost 7 : Business Insurance
Insurance Fixed Cost
Your baseline insurance coverage for liability and property is a fixed cost you must budget for. This runs $250 monthly, totaling $3,000 annually. This expense is predictable, unlike variable costs like materials or transportation fees, and it anchors your minimum overhead requirement.
Coverage Details
This $3,000 annual fixed cost covers general liability and property protection for your workshop and client assets. You need firm quotes to nail this number, but it sets a baseline for overhead planning. It sits right alongside your $2,500 monthly workshop rent as a non-negotiable fixed operating expense.
- Covers shop assets and client liability.
- Fixed at $250/month.
- Essential for operational compliance.
Managing Premiums
Shop safety protocols directly influence your liability premium, so focus on reducing incidents. Look for multi-year discounts or bundling options when renewing coverage. Avoid underinsuring high-value equipment or inventory, which spikes risk exposure. Honestly, this is a simple fixed cost to audit annually for savings.
- Bundle liability and property policies.
- Improve shop safety ratings.
- Shop around quotes every three years.
Fixed vs. Variable Pressure
Compare this $3,000 fixed insurance cost against your largest variable expenses. Your transportation budget is 60% of revenue, and marketing is 40% of revenue. If sales slow, those variables shrink, but insurance remains constant, demanding consistent project volume to cover it.
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Frequently Asked Questions
Initial capital expenditures (CapEx) total $77,500, covering major items like the Delivery Van ($35,000), Professional Spray Booth ($12,000), and Workshop Setup ($15,000);