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.

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 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 guide to starting your floor installation business. 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:

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 very important. If you don’t have a name in mind already, read our detailed guide on how to name a business or get some help brainstorming a name with our Floor Installation Business Name Generator.

Then, when registering a business name we recommend checking if the business name is available in your state, federally by doing a trademark search, searching the web, and making sure the name you choose is available as a web domain to secure it early so no one else can take it.

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After registering a domain name, consider setting up a professional email account ( Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

STEP 2: Form a legal entity

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

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

Check out the Top Business Formation Services from our friends at StartupSavant.

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

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!

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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.

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

  • 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.
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Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.

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 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:

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.

Service Agreement

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.

Business Insurance for
Floor Installation Business

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 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.

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 Floor Installation Business 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?

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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Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

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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.

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 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.

Next Steps

Get more ideas with our Business Ideas Generator.

Check out our How to Start a Business page.

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