We earn commissions if you shop through the links below. Read more
Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on May 31, 2022
Investment range
$6,050 - $12,100
Revenue potential
$65,000 - $130,000 p.a.
Time to build
0 – 3 months
Profit potential
$58,000 - $90,000 p.a.
Industry trend
Growing
Commitment
Flexible
Here are the most essential things you need to consider when starting your flooring business:
Go Flooring’s Blueprint for Success with CEO
Starting a flooring business has pros and cons to consider before deciding if it’s right for you.
Trends in the flooring industry include:
Challenges in the flooring industry include:
Startup costs for a flooring business range from $6,000 to $12,000. Costs include all the tools you’ll need and a down payment on a truck or van to transport your tools.
You can learn tile installation for about $500 in just three weeks from the Ceramic Tile Education Foundation, then take an exam to become a certified tile installer. Courses and the exam involve hands-on work, so you might need to travel to one of their sites.
You can also find hardwood flooring and carpet installation classes near you. Another option is to work as a flooring apprentice. The best education is hands-on experience.
You’ll need a handful of items to successfully launch your flooring business, including:
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150 - $200 | $175 |
| Business licenses and permits | $100 - $300 | $200 |
| Insurance | $100-$300 | $200 |
| Business cards and brochures | $200 - $300 | $250 |
| Website setup | $1,000 - $3,000 | $2,000 |
| Tools | $3,000 - $5,000 | $4,000 |
| Vehicle for tools | $1,500 - $3,000 | $2,250 |
| Total | $6,050 - $12,100 | $9,075 |
Flooring generally costs $5 to $20 per square foot. These calculations will assume an average price of $12, and that each job will be about 150 square feet. Your profit margin will be high, around 90%, since the customers will pay for all materials.
In your first year or two, you could do three jobs per month, bringing in $65,000 in annual revenue. This would mean $58,000 in profit, assuming that 90% margin. As you begin to get referrals, you could do six jobs a month. At this stage, you’d hire hourly workers, reducing your profit margin to around 70%. With annual revenue of $130,000, you’d make a great profit of more than $90,000.
There are a few barriers to entry for a flooring business. Your biggest challenges will be:
Now that you know what’s involved in starting a flooring business, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Research flooring businesses in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a laminate flooring specialist, or a floor installation company that also installs composite decking.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as hardwood flooring, engineered wood flooring, or carpeting.
This could jumpstart your word-of-mouth marketing and attract clients right away.
You can either specialize in a certain type of flooring or install a variety of floors. You can also make additional revenue by tearing out old floors. You could learn other skills as well and offer remodeling services.
You could also find independent contractors, like plumbers and electricians, to be your subcontractors and earn a markup on their prices.
Prices for flooring installation depend on the materials being installed and range from $5 to $20 per square foot. When you’re working by yourself, you should aim for a profit margin of about 90% since your only costs will be for labor.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Your target market will be broad so you should spread out your marketing to include sites like TikTok, Instagram, and Facebook. You should also connect with people on LinkedIn.
Being on LinkedIn gives you added credibility, plus you can connect with realtors who can give you referrals.
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Here are some ideas for brainstorming your business name:
Discover over 410 unique flooring business name ideas here. If you want your business name to include specific keywords, you can also use our flooring business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool below. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to flooring businesses.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your flooring business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a flooring business.
Starting a flooring business requires obtaining a number of licenses and permits from local, state, and federal governments.
In some states, you may need a general contractor’s license depending on the type of work that you do. Check with your state for requirements.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your flooring business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as FONN, JOBBER, or Octopuspro, to manage your estimates, projects, schedule, and billing.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your flooring business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your flooring business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a flooring business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in flooring for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in flooring. You’ll probably generate new customers or find companies with which you could establish a partnership.
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a flooring business include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
The flooring installation business has been booming for the last decade, with no signs of slowing. People periodically update their homes, and flooring is a huge part of that process. If you’re handy with tools, you could capture a share of a large market with a flooring business. It will take a love of the work and a passion to serve your customers, but you could build your small business into a regional flooring empire!
You’ve got business knowledge in your toolbelt now, so it’s time to start building your successful flooring business.
Flooring can be a very profitable business since ongoing expenses are very low. If you do excellent work and provide great customer service, your business will grow from referrals.
A great way to find flooring clients is to network with real estate agents who can send you referrals. You can connect and engage with them on LinkedIn.
Carpet is always a favorite for living spaces, and hardwood is also popular. Tile is generally the best choice for kitchens and bathrooms.
You should only hire employees with experience who have references and pictures of their past work. Alternatively, you could hire interns to train on the job.
You should stay up-to-date with safety regulations and standards relevant to your business. Also, provide comprehensive safety training to your employees, covering proper equipment use, handling hazardous materials, and emergency procedures.
Published on December 1, 2022
The services sector is undoubtedly the biggest economic sector in the US as it accounts for nearly 70% of the country’s gross domestic product. It ...
Read Now
Published on July 21, 2022
The US handyman industry is worth a stunning $4 billion and growing, with demand for all variety of domestic services on the rise as the number ofho ...
Read Now
Published on July 13, 2022
As the US economy regains strength in the wake of the pandemic, the construction industry is anticipating strong growth with plenty ofopportunities, ...
Read Now
No thanks, I don't want to stay up to date on industry trends and news.
Comments