The furniture sector has faced unprecedented challenges in recent years. From the Covid-19 pandemic to geopolitical tensions like the Russian attack on Ukraine, these crises have severely impacted the industry. Particularly hard hit are the micro-SMEs (small and medium-sized enterprises), which struggle to maintain their footing and expand their reach beyond local markets. This article delves into essential strategies for these micro-SMEs to not just survive but thrive on an international scale, with insights drawn from the INT4FURN project, a European initiative aimed at fostering entrepreneurship and internationalization within the furniture sector.

The Challenges Facing the Furniture Sector

Impact of Recent Crises

The Covid-19 pandemic and geopolitical tensions have not just disrupted but shattered global supply chains, leading to severe delays, exorbitant costs, and a staggering decline in consumer demand. For the furniture sector, this has translated into a significant reduction in production and sales, causing a financial strain of unprecedented proportions on many companies. According to Eurostat, the European furniture manufacturing sector saw a 15% decline in turnover during the peak of the Covid-19 pandemic in 2020.

Decline in Companies and Jobs

The combination of reduced demand and increased operational challenges has not just led to a decline but a devastating loss in the number of furniture companies. Eurostat reports that the number of active enterprises in the EU furniture sector decreased by 5% from 2019 to 2021. The human toll has been significant, further compounding the difficulties faced by the sector. In Italy alone, one of Europe’s largest furniture producers, approximately 15,000 jobs were lost in 2020 due to the pandemic’s impact on the industry . These are not just numbers, but real people and families affected by these crises.

Limited International Presence

Despite the high quality and innovative designs European furniture makers produce, many micro-SMEs have limited or no presence in international markets. Only 25% of EU-based micro-SMEs export at all, and an even smaller portion export beyond the EU. This lack of internationalization hampers growth potential and makes companies more vulnerable to local economic downturns. Read our how-to export guide for European furniture businesses.

The INT4FURN Project: An Overview

Objectives and Goals

INT4FURN project aims to revitalize the European furniture sector by promoting entrepreneurship among micro-SMEs and young people. Its primary goal is to create new, high-quality employment opportunities and foster the internationalization of SMEs.

Target Audience

INT4FURN specifically targets micro-SMEs within the furniture sector, along with young entrepreneurs looking to enter this industry. By focusing on these groups, the project seeks to inject fresh ideas and energy into the market.

Key Components of the Project

• Tailored Training Programs
• Mentorship Opportunities
• Resources for Navigating International Business

These initiatives are designed to equip entrepreneurs with the skills and knowledge they need to succeed globally.

1. Promoting Entrepreneurship

Importance of Entrepreneurship

Entrepreneurship is the backbone of innovation and economic growth. For the furniture sector, fostering a spirit of entrepreneurship can lead to developing new products, more efficient processes, and a more dynamic market environment. If you’re looking to fund your innovative projects, explore a variety of innovation funding opportunities available for comprehensive resources and support to propel your ideas forward.

Encouraging Young Entrepreneurs

Young entrepreneurs bring fresh perspectives and innovative ideas to the table. By supporting these individuals through training and mentorship, the INT4FURN project helps to ensure a vibrant future for the furniture sector.

2. Internationalization for Micro-SMEs

Benefits of Internationalization

Expanding into international markets offers numerous benefits for micro-SMEs, including:

• Increased sales
• Diversified customer bases
• Enhanced brand recognition
• Buffer against local economic fluctuations

Barriers to Internationalization

Despite the advantages, many micro-SMEs face significant barriers to internationalization, such as:

• Limited resources
• Lack of market knowledge
• Regulatory hurdles

Overcoming these challenges is crucial for successful expansion.

3. Training for Success

Developing Basic Business Skills

A solid foundation in business skills is essential for any entrepreneur. INT4FURN offers training in areas such as:

• Financial management
• Marketing
• Strategic planning

Leveraging Digital Business Opportunities

In today’s digital age, leveraging online platforms is key to reaching global markets. The INT4FURN project includes training on how to effectively use digital tools and platforms to expand business operations internationally.

4. Practical Steps for Micro-SMEs

Identifying Market Opportunities

Identifying the right markets to enter is the first step towards successful internationalization. This involves market research to understand:

• Consumer preferences
• Competitive landscapes
• Potential barriers

Building a Strong Online Presence

A robust online presence is crucial for reaching international customers. This includes:

• An optimized website
• Active social media profiles
• Engaging content that resonates with your target audience

Networking and Partnerships

Building relationships with other businesses and industry professionals can open doors to new markets. Networking events, trade shows, and industry associations are valuable resources for making these connections.

5. Leverage Digital Tools

E-commerce Platforms

E-commerce platforms like Shopify, WooCommerce, and Amazon offer micro-SMEs an easy way to reach international customers. These platforms handle many of the complexities of cross-border sales, allowing businesses to focus on marketing and customer service.

Social Media Marketing

Social media is a powerful tool for building brand awareness and engaging with customers. Platforms like Instagram, Facebook, and LinkedIn provide opportunities to showcase products, share customer stories, and connect with a global audience.

Navigating International Markets

Understanding Cultural Differences

Cultural differences can significantly impact how products are received in different markets. Understanding these nuances and adapting marketing strategies accordingly can improve the chances of success.

Adapting to Local Regulations

Each country has its own set of regulations regarding imports, safety standards, and business practices. Navigating these regulations is crucial to avoid legal issues and ensure smooth operations.

Government and EU Support

Available Funding and Grants

Various funding opportunities and grants are available to support micro-SMEs in their internationalization efforts. These financial resources can help cover the costs of market research, marketing, and expansion activities. For more information on available funding, visit the European Commission’s funding opportunities page.

Navigating Bureaucracy

Government and EU programs often come with complex application processes. Understanding how to navigate these bureaucratic hurdles can make accessing support easier and more efficient.

Sustainable Practices in Furniture Production

Importance of Sustainability

Sustainability is increasingly important in the furniture sector. Consumers are more aware of environmental issues and prefer to buy from companies that demonstrate a commitment to sustainable practices.

Implementing Green Practices

Implementing sustainable practices can range from using eco-friendly materials to adopting energy-efficient manufacturing processes. These practices not only benefit the environment but can also attract eco-conscious customers.

Challenges and Solutions

Overcoming Supply Chain Issues

Supply chain disruptions are a significant challenge for the furniture sector. Developing a resilient supply chain involves diversifying suppliers, investing in technology, and building strong relationships with key partners.

Managing Costs

Cost management is crucial for the sustainability of micro-SMEs. This involves careful budgeting, monitoring expenses, and finding cost-effective solutions without compromising on quality.

Future Trends in the Furniture Sector

Digital Transformation

The furniture sector is undergoing a digital transformation, with advancements in technology changing how products are designed, manufactured, and sold. Embracing these changes can provide a competitive edge.

Emerging Markets

Emerging markets present new opportunities for growth. Identifying and entering these markets can help micro-SMEs expand their reach and increase their revenue streams.

Conclusion

The furniture sector, particularly micro-SMEs, faces numerous challenges and significant opportunities. By leveraging the resources and support offered by initiatives like INT4FURN, these businesses can navigate the complexities of internationalization and thrive in a global market. The key is to embrace entrepreneurship, build strong digital capabilities, and continually seek new growth opportunities.