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How Foam Mattress Manufacturing is a Best Startup Idea in 2020

Business

What is a start-up?

A start-up refers to any company which is in its initial or early stage. A start-up is founded by one or more entrepreneurs with the aim to manufacture, develop and market a product or a service for which they feel there is a demand for. Every company (big or small) in its initial stage was called a start-up.

How to develop a business idea

However, the first step of forming a start-up is to develop a new business idea. The business idea evolves in an entrepreneur when he sees the various problems around him.  As the saying goes “Necessity is the mother of all inventions”, the business idea develops with necessity.

For example, if a boy lives in an area that doesn’t have LED bulbs and the bulbs currently used in his village causes them to pay huge electricity bills. In such a situation he thinks and starts to develop or sell LED Bulbs which are less expensive than the other bulbs and also consume less amount of energy as compared to the bulbs they were using before. The manufacturing and selling of the LED Bulbs can be referred to as the boys “BUSINESS IDEA”.

Therefore to develop new business ideas you have to see and observe around you and find out about the various problems and necessities of people around you. You will definitely find something that people are in need of but isn’t available. If you can think of how to help them solve the problems and can find a way to monetize the idea, then that will be your best business idea.

This is how future business ideas are developed and evolved in the mind of an entrepreneur.

Who doesn’t like a good sleep? Apart from a tired body and a sleepy mind, a good bed, pillow and mattresses are the most important things that we need to have a healthy and comfy 8hour of sleep. Be it a power nap or a long healthy sleep, the comfort offered by the mattress is the most important factor to make us have a good sleep.

healthy sleep

Mattress manufacturing industry has sprung up to existence in recent times. A few years back, mattresses normally meant cotton mattresses which were produced locally. Though their comfort level were sufficient but now as the standard of living has increased to many folds, millennials need the best of luxury and comfort for their homes.

The mattress industry of the U.S.A earned a whopping amount $15 billion for the year 2012 – 17. With just a few big players in the market such as Purple, Serta INC,  Sealy Inc., Ashley Furniture and Kingsdown Incorporated. With the view to capture the unfocussed market many new mattress manufacturing startups has sprung up. As per grandviewresearch.com  The global mattress market size was valued at USD 27.5 billion in 2018 and is expected to expand with a CAGR of 6.7% from 2019 to 2025 as per data and insights

USA mattress market

 

Till a few years back and even now, spring mattresses are widely used however they are normally un- healthy and are prone to accidents as the springs might poke through the materials and harm those sleeping on it. Also from the comfort point of view, spring mattresses are hard and not so sleep friendly. This is when a need for an alternative was felt and foam mattress came into the market. Compared to spring mattresses the foam mattresses were accident-free, more comfortable and healthy.

Another major factor that affects our choice of mattress is the size. Foam mattress comes in many sizes including mattress for large people and mattress for people of smaller size or children.

Why Foam Mattress Manufacturing a good business idea in 2020

Foam Mattress Manufacturing is a good business idea because of the following reasons:-

1. In Huge Demand

Because of the comfort level of foam mattresses, they are in huge demand in the market. And the fact that Foam mattresses come at a lesser price as compared to spring mattresses makes customers root for foam mattresses. The following chart shows how the demand for mattress has increased from 2008 to 2020.

Mattress-Industry-Statistics-in-the-United-States

2. Huge revenue scope

In 2017, Serta Inc. sold more than $250 million. Also, Sealy Inc. alone earned revenue of more than $250 million in just a year. This shows the huge revenue potential of the market.

3. Growing customer base

Millennials are now much more inclined towards home decoration and comfort. This is the reason why there has been a huge spike in mattress sales over the years. It is also predicted that with increasing number of educated millennials this industry is expected to expand further.

4. Low production cost

The production cost of foam mattresses is cheap as compared to spring mattresses. It will cost around $800. However the cost of production depends on some factors such as cost of foam, quality of the mattresses, machinery used labor charges etc.

Production Process of a mattresses

form mattress production

1. Designing

The first step of the production process is designing the mattress. What materials will you use, what will be the shape, what will be the comfort level; everything will be decided in this level. Mattresses are normally available in various sizes such as large size (Mattress for large people), Medium size and small size. This is in this step that the designer decides the size of the mattress.

2. Procuring Raw Materials

The next step is to procure the raw materials (foam, cloth etc.). This step is based on various factors such as cost, quality of raw materials.

3. Making the mattress

After procuring raw materials and the required machinery, the next step is mattress production. Production is based on the design and quality decided in the designing phase of production.

4. Quality Control

form mattress quality checkAfter production is done, Quality of the mattress is checked. Once the quality check is done the mattresses are sent for comfort checking and are rated on the basis of comfort.

5. Marketing

Prices are then set depending on the comfort level. More the comfort level, more the price. After the pricing is done the mattresses are then set for sales to various retailers for sale. You can also start selling online on various eCommerce sites.

Investment Requirement:-

Investment requirement for a foam mattress manufacturing start-up is low than spring manufacturing start-ups.

If you want to start at a micro level then the initial investment will be around $30,000. Normally micro-size business can be started within a very small area like your car garage. For such business, you will have to spend around $10,000 for equipment and $3,000 for one unit (batch) of raw materials for one unit of raw materials which will last for about a week or two. It is advisable to purchase 4-5units of raw materials which will cost about $15,000. Also, you have to keep in mind that there will also be other charges including labour charges, electricity charges, rent (if the place is not owned by you) which will sum up to around $10,000.

Small businesses investment requirement is a little more than micro-business models. This kind of business will cost about $50,000 initial investment as the requirement of raw materials, energy etc. will be more as compared to a micro-enterprise.

Some successful Mattress production ventures in the US with Anual Sales

Sl No Company Headquarters Annual Sales
1. Serta, INC Itasca, IL Over $250 Million
2. Sealy, INC Trinity, NC Over $230 Million
3. Tempur – Pedic, INC Kent, WA Over $200 Million
4. Ashley Furniture Arcadia, WI Over $200 Million
5. Kingsdown, INC Mebane, NC Over $100 Million
6. Symbol Mattress INC Richmond, VA Over $50 Million
7. Southerland, INC Nashville, TN Over $50 Million
8. American National Manufacturing Corona, CA Over $20 Million

Benefits Provided by the Government

As a new start-up, the first question that comes in the mind of every entrepreneur is from where they will get the money to start the business. Many at times the entrepreneur is not so well to do that he can finance himself on his own, this is where government startup grants come into play.

In The US, there are two programs that you need to know.

1.      Small Business Innovation Research (SIBIR)

2.      Small Business Technology Transfer (STTR).

These programs are provided by the US Small Business Administration (SBA) to serve as a source of capital for businesses in their initial stage.

The funding of these two programs is done by Federal agencies with over $100 million as their Research and Development Budget. They are bound by the law to participate and contribute to the above-mentioned programs to support small businesses.

Final Verdict

Foam mattress production is indeed a very excellent business idea for a start-up with less than $50,000 as an initial budget. Also with the increasing number of millennials, a huge spike can be seen in the demand of mattresses and other cozy furniture items. With just a few top players in the market, Foam Mattress market is something that has a lot of potential for new entrepreneurs.

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