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.
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Learn how to start your own Carpet Store and whether it is the right fit for you.
Start a carpet store by following these 10 steps:
- Plan your Carpet Store
- Form your Carpet Store into a Legal Entity
- Register your Carpet Store for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Carpet Store
- Get the Necessary Permits & Licenses for your Carpet Store
- Get Carpet Store Insurance
- Define your Carpet Store Brand
- Create your Carpet Store Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your carpet store. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
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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 much can you charge customers?
- 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 important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Carpet Store Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your carpet store is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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!
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?.
Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our best net 30 vendors, guide and start building business credit.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
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.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
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:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
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
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
Recommended: Learn what business insurance for your Carpet Store will cost.
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
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.
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.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.
Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Carpet Store in your State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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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.
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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.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
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:
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.
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