How to Start a Floor Installation Business
A floor installation businesses services homes and commercial property by installing, removing, and performing maintenance on the area’s flooring. Successful floor installation companies offer a wide range of flooring options, including linoleum, wood and tiles. Covering residential homes, apartments, small shops and—in some cases—large stores, a floor installation business possesses the many skills needed to cover any property’s needs.
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Learn how to start your own Floor Installation Business and whether it is the right fit for you.
Start a floor installation business by following these 10 steps:
- Plan your Floor Installation Business
- Form your Floor Installation Business into a Legal Entity
- Register your Floor Installation Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Floor Installation Business
- Get the Necessary Permits & Licenses for your Floor Installation Business
- Get Floor Installation Business Insurance
- Define your Floor Installation Business Brand
- Create your Floor Installation Business 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 floor installation business. 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 floor installation business?
First, a floor installation business needs to be insured. Typically, General Liability Insurance coverage is between $361 and $839 in annual premiums. A small shop will also be needed. Depending on the shop’s size, rent can cost approximately $3,000 to $5,000 per month Startup materials, wages, and other expenses can be approximately $10,000 to $30,000—again, dependent on the business’s size.
What are the ongoing expenses for a floor installation business?
Expenses include equipment maintenance and raw resources. Typically, raw wooden flooring costs about $5 to $8 per square foot. However, high-end materials can cost between $10 and $20 per square foot.
Workers will also need to be paid, so expect to offer hourly wages of between $10 and $18 per hour. The previously-mentioned insurance premiums should be accounted for as well. Shop utilities, advertising costs, and marketing costs apply here too.
Who is the target market?
The best clients are those which provide consistent work. It is possible to be contracted by housing development companies that would like you to install flooring in their newly built homes. Apartment management teams, too, are fantastic clients. Because apartment management teams frequently have connections to other management teams, servicing part of a network may prove lucrative for the growing floor installation business. Your clients will also include individuals that would like you to redo or install new flooring in their home.
How does a floor installation business make money?
A floor installation business makes most of its profit installing hardwood, carpet, and tile floor. While other floor types can certainly be profitable, these three types of flooring are most popular, and they will most likely make up the largest portion of your profits. A floor installation businesses can also trim, stain and repair previously installed floors. That said, maintenance services are limited. A floor installation business is—first and foremost—an installation business.
How much can you charge customers?
On average, a wood floor installation costs about $4,000. Laminate flooring installation costs approximately $2,400. Carpet installations generally cost around $1,600. Vinyl or linoleum flooring, the cheapest option for floors, typically cost about $1,545. These estimates increase or decrease depending on the area of the floor being installed.
How much profit can a floor installation business make?
The floor installation industry has an annual revenue of about $23 billion. However, the industry’s top providers account for five percent of this amount—or about $1.15 billion. Medium-sized floor installation businesses make, on average, about $230,000 per year. A small floor installation business’s owner can make decent money within the first few years, which is around $75,000.
How can you make your business more profitable?
You can boost your store’s revenue by offering speedy services. Because floor installation is pretty invasive, offering fast services helps. Focus on customer satisfaction, and offer a variety of flooring options. Reduce any management, warranty and cleaning expenses when possible, and prioritize your business’s word of mouth. At the end of the day, your business’s profits rely on its popularity.
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 Floor Installation Business 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 floor installation business 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 floor installation business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
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.
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.
Floor installation businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your home installation business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
A floor installation business can be run out of a large 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 storefront:
- 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 floor installation business.
- 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 a storefront:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for you business’ location to ensure your floor installation business will be in compliance and able to obtain a CO.
Business Owner's Policy (BOP)
The first type of insurance you want to check out is a business owners policy (BOP). A business owners policy. A business owner's policy is an insurance package especially put together for a specific type of business.
Commercial Property Insurance
Commercial property insurance is the kind of insurance which will protect your business from unpleasant surprises, like fires, theft, natural disasters, among other things which affect your buildings, whether owned or leased, equipment, tools, and other valuables which you might have to pay for if not for your commercial property insurance.
You can usually get business interruption coverage as well. Business interruption will reimburse you for some of your lost income should your business have to close after a claim. For instance, if you have a fire and the business has to close while the fire and water damage is being cleaned up, business interruption will help you.
Commercial Liability Insurance
General liability insurance, sometimes called commercial liability insurance, is the coverage which can protect your business if someone hurts themselves on the work site and needs medical attention or decides to sue your business.
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 Floor Installation Business 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 floor installation business
Promote your floor installation business via residential associations, apartment groups, and nearby universities. You’ll also need to have a business landing page to promote your services online. A social media page including pictures of flooring jobs completed by your business and testimonials from satisfied customers is also a great way to reach potential clients. Floor installation services are rare, so any promotion and marketing should utilize local hardware stores, carpet shops, and furniture stores. Often, floor installation has a cross-market opportunity with these products and services.
How to keep customers coming back
Since floor installations are usually only needed on a periodical basis, retention of individual home owning customers can be difficult. Though these people may not need completely new floors, you can still offer maintenance services in order to retain their business. Additionally, their satisfaction with your customer service will be shared with their friends and family who have the potential to become your customers in the future.
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 Floor Installation Business in your State
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Is this Business Right For You?
Previous floor installation contractors are perfect fits for floor installation management. Someone with technical installation experience, maintenance experience, or electrical experience may find the job to be a good fit. That said, a successful floor installation business owner will have excellent management, financial, and marketing skills. Ideally, they’ll be similarly skilled in governing others, reaching out to potential customers, and handling ongoing projects.
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What happens during a typical day at a floor installation business?
Business operators must take new requests, give quotes, market their services and conduct installations. Typically, flooring materials include hardwood, carpet, laminate, luxury vinyl, tile, and linoleum. Other day-to-day services can include refinishing floors, conducting emergency maintenance, installing vapor barriers, and matching different floors. From an administrative end, a floor installation business must constantly find new customers, explore industry material source options, and balance expenses with revenue to gain a profit.
What are some skills and experiences that will help you build a successful floor installation business?
Before starting a floor installation businesses, you should understand the ins and outs of tile, hardwood, laminate, and carpet installation. At least five years of experience as a floor installation contractor is suggested.
Management skills are also important. Once your business has grown, it is likely that you won’t be conducting many installations yourself.However, you will need to increase your business’s installation quality. Understanding local competitors, originality, quality, versatility and professionalism is highly important. You should similarly be well-versed in targeting modern techniques, products, installation methods, and tools—focusing on adopting them into your business’s architecture.
What is the growth potential for a floor installation business?
Small floor installation businesses have a lot of growth potential. In fact, the Floor Installation Association of North America typically holds a Convention & Trade Show to help individual contractors, entrepreneurs, and business owners strategize growth. Because a heavy system of review, awards, and recommendations exists across the floor installation industry, high-quality businesses don’t go unnoticed.
However, quite a lot of competition exists for small floor installation businesses. If a floor installation business offers consistent, high-quality jobs, however, they can expect to grow into a prioritized service provider in their area.
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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 floor installation business?
As with most contractor-centric businesses, a floor installation business is as successful as its service network. As your floor installation business grows, you’ll need to match its options with lucrative clients. As stated above, apartment networks offer excellent opportunities. Homes which are likely to need floor replacements, too, are lucrative. If you intend to install luxury floors—like high-quality hardwood and granite—consider servicing a high-income neighborhood.
How and when to build a team
You can build a team by contacting local contractors. It is also possible to hire a rookie in the business by getting in touch with the local trade school. Though this can be a more cost efficient option, it is generally suggested to hire individuals that are experienced in your trade. Floor installation contractors are plentiful, and many are looking for high-quality work positions. You’ll need a team of three to five technicians at the start of your business. You can begin building your team after about three years of financial stability.
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