Case study · Furniture
Gross margin from 41% to 52%, by costing the custom work.
A furniture studio that lost money on its best-loved commissions. Job costing and a new deposit policy took gross margin from 41% to 52% in a year.
Results
52%
gross margin, up from 41%
Source: management accounts, FY2023 vs FY2024
+$215k
average month-end cash, mostly from deposits
Source: bank statements, 2023 vs 2024
2 days
to quote a commission, down from 9
Source: quote log, Q4 2024
We thought our custom work was our best business. It was our busiest. Mara gave us the numbers to tell the two apart.
Hugo Ashdown
Co-founder, Wrenfold Studio
Client
Wrenfold Studio
Industry
Furniture
Stage
Bootstrapped
Team size
19
Engagement
Finance foundations · 10 weeks
The challenge
Wrenfold designs and builds solid-wood furniture in a Hudson Valley workshop and sells through a showroom in Tribeca. Revenue was $3.9m, 60% of it from custom commissions. Sales grew every year. The bank balance didn’t.
Quotes came from a 2019 price list. Nobody tracked hours by piece. Deposits were 20%, lead times were 14 weeks, and timber was paid for up front.
What we did
For eight weeks the workshop logged hours by piece. I added timber, finishing and delivery costs to each job and set an overhead rate per workshop hour. Fourteen of the forty most-ordered custom pieces were selling below cost.
We rebuilt the quote as a shared sheet that takes 20 minutes, repriced those 14 pieces, and moved deposits to 50% at order, with the balance due before delivery. I set up monthly management accounts with margin by product line, closed by working day 6.
Outcome
Gross margin rose from 41% to 52% in the 2024 financial year. Average month-end cash went up by $215,000, mostly from deposits. Custom quotes now go out in two days instead of nine.
Two clients walked away over the new prices. The rest stayed. Hugo and his co-founder now pay themselves on a fixed schedule.
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