How to Open a Carpet Store

A carpet store sells, repairs and sometimes cleans carpets. They may sell rugs and designer carpets as well. Carpets are either sold for a flat fee and installed by the business, or are priced by square foot / square yard. 

Learn how to start your own Carpet Store and whether it is the right fit for you.

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Start a carpet store by following these 9 steps:

You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your carpet store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

STEP 1: Plan your Business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

  • What are the startup and ongoing costs?
  • Who is your target market?
  • How long it will take you to break even?
  • What will you name your business?

Luckily we have done a lot of this research for you.

What are the costs involved in opening a carpet store?

Your startup costs will be between $2,000 and $10,000, depending on your location. You can start from home, or you can use a small workshop with a monthly rent of about $1,000. Expect to pay additional money for high-grade insurance.

What are the ongoing expenses for a carpet store?

Expect to pay between $4 and $5 per square foot of carpet. Your monthly utilities will be approximately $300. A carpet shop’s rent can be as much as $2,000 per month, depending on its size. Expect to pay employees between $8 and $15 per hour, depending on their expertise.

Who is the target market?

Both homeowners and businesses make excellent customers. Focus on selling high-quality carpets and on promoting carpet installation. Because businesses often have full-floor carpeting needs, they’re more likely to pay for installation jobs. They’ll also need to regularly update their carpets to keep an area managed, attractive and effective. Your showroom should promote both individual carpets and full-floor-length carpets.

How does a carpet store make money?

A carpet store makes money by selling and installing carpets, either as individual products or in custom lengths. A carpet store can also make money by installing these carpets. If this is the case, a carpet installation can be charged as either a flat fee or on a per-hour basis.

Some carpet stores may clean or repair carpets. If they’re knowledgeable about high-quality carpets, they can even restore valuable carpets. Some carpet stores may expand into the flooring business. If so, they may make money by selling, installing and repairing customer floors.

How much can you charge customers?

Expect to charge between $2 and $10 per square foot for average carpets. Installations can cost between $30 and $40 per square yard, if it’s a full-floor-length carpet. On average, you’ll make roughly $995 for a full-floor-length carpet purchase and installation.

How much profit can a carpet store make?

A beginning carpet store can make about $55,000 in its first year. It will, however, need to consistently sell carpets to remain profitable. A highly successful carpet store which caters to large audiences can make hundreds of thousands—if not millions—of dollars per year.

How can you make your business more profitable?

Expand to carpet installations as soon as possible. To be competitive, you’ll need to keep overhead costs low while maintaining inexpensive installation costs. Once you’ve established your client base, use a referral network to get more customers. By focusing on installation quickly, you’ll become a well-known, qualified installer. Otherwise, you’ll lose customers to pre-established carpet stores with years of experience.

What will you name your business?

Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

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STEP 2: Form a legal entity

Establishing a legal business entity such as an LLC prevents you from being personally liable if your carpet store is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.

You should also consider using a registered agent service to help protect your privacy and stay compliant.

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For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

A cube with LLC printed on its sides

You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

  • This separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • It also makes accounting and tax filing easier.

Get a business credit card

  • This helps you separate personal and business expenses by putting your business' expenses all in one place.
  • It also builds your company's credit history, which can be useful to raise money and investment later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a carpet store. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

For information about local licenses and permits:

Certificate of Occupancy

A carpet store is generally run out of a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO).  A CO confirms that all building codes, zoning laws and government regulations have been met.

  • If you plan to lease a location:
    • It is generally the landlord’s responsibility to obtain a CO.
    • Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a carpet store .
    • After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
  • If you plan to purchase or build a location:
    • You will be responsible for obtaining a valid CO from a local government authority.
    • Review all building codes and zoning requirements for your business’ location to ensure your carpet store will be in compliance and able to obtain a CO.

 

STEP 7: Get Business Insurance

Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

How to promote & market a carpet store

Promote your carpet store through local carpet cleaners. You should use a referral system to gain new clients, and you should cater to businesses with in-depth carpeting needs. Any long-term projects should be business-centric, as they’re simply more profitable.

Recommended: Get started with local advertising for your business with a $300 credit from Yelp.

How to keep customers coming back

Mostly, you’ll attract customers by your location and grand opening event. A carpet store needs to be in a highly visible area, and it should be able to build rapport with carpet cleaning crews, home improvement stores, hardware stores, and interior design centers.

As for customer retention, make sure your services include repair and restoration. Particularly, sell high-quality carpets and sell additional restoration services. A lot of carpet owners will return to the location which sold them their carpet—so as to ensure high-quality upkeep and restorations.

STEP 9: Establish your Web Presence

A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Start A Carpet Store In Your State

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Select your state below for an in-depth guide on completing each of these steps in your home state.

Is this Business Right For You?

Those who have experience with flooring, home maintenance, and carpet installations are great carpet store owners. A carpet store owner should have a keen eye for quality carpets, and they should be good at gathering resources, talking to customers, and managing resources

Additionally, a carpet store owner should understand which carpets pair well with area rugs, hardwood, cork surfaces, bamboo surfaces, and wall solutions. A good owner will have a solid marketing strategy, be good at locating vendors and prioritize differentiation.

What happens during a typical day at a carpet store?

A carpet store, day in and day out, sees retail traffic. Customers enter, browse carpets, and decide on products they would like to purchase. A carpet store may have separate cutting sections for carpets. It may also feature carpet demos on display. A carpet store may cut carpet inside, or it may simply sign up customers for later services. In the latter case, the store’s technicians will travel to the customer’s home or business. Then, they install the carpet

Other daily operations include stocking the store’s inventory, helping customers, matching good carpets with different floor materials, and processing transactions. In addition, store owners will need to handle the business' finances, marketing, and sales strategies.

What are some skills and experiences that will help you build a successful carpet store?

Mostly, you'll need to be well-versed in carpet installation, removal, protection, repair, and restoration. You should also be knowledgeable in carpet fashion, flooring, and interior design. Management, marketing, and financing skills are also useful to a carpet store owner.

What is the growth potential for a carpet store?

A carpet store can expand quite a bit. Becoming a member of the World Floor Covering Association helps, as does becoming a member of the American Floorcovering Alliance. While many carpet stores begin as local providers, many have the opportunity to become national chains.

To grow successfully, however, a carpet store needs to offer a lot of variety. It should also expand to offer luxury-style carpets and flooring. Additionally, a carpet store should assemble a team of experts. Check phone book ads, connect with other businesses on the Internet and offer a finder’s fee to any local carpet cleaning companies.

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Take the Next Step

Find a business mentor

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

  • Funding
  • Events
  • Guides
  • Support

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a carpet store?

At the start, try to reduce your overhead costs as much as possible. Then, focus on building a stock while hiring showroom workers. These showroom workers should be very knowledgeable, so as to help you compete against established carpet shops. If you can’t find employees with decent experience, you’ll need to train them.

How and when to build a team

You should build a team as soon as possible. Aim to hire at least two to three showroom operators, as you’ll need to present your carpets and talk to customers about their quality. Your team can expand quite large, over time, if you’re servicing a large area.

Next Steps

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