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A home theater installation business specializes in setting up the assorted audio and video equipment for individual home theaters. Many such businesses branch out and offer their services to organizations such as schools, businesses, universities, and churches that may also need such specialized assistance. In this way, such a business can almost immediately assert itself as a vital component of the community.
Who is this business right for?
Obviously, this business is great for individuals who have a love and an aptitude for setting up things like big screen TVs and surround sound theater systems. It's also good for a “people person,” as you will be working with members of every demographic within your community. Finally, it's good for those who often shop for these kinds of materials online: being able to make recommendations for where customers can buy equipment they want at competitive prices can really help set your business apart.
What happens during a typical day at a home theater installation business?
With luck, most of your days will be spent inside customer's homes, and you will be installing everything they require. Time not spent doing this may be spent advertising your business, communicating with customers (or prospective customers), and possibly ordering and receiving equipment for customers.
What is the target market?
While you will appeal to many demographics, your target market will typically be men in their mid to late thirties. This is a demographic that is likelier to be settling into a permanent home and have enough disposable income to set this up, possibly as part of a “man cave.”
How does a home theater installation business make money?
Typically, you will make money by charging fixed fees for particular services (such as mounting a flat screen TV, setting up a stereo, and so on). You may consider offering “bundles” that allow customers who need a variety of services to save money.
What is the growth potential for a home theater installation business?
The growth potential for this business is modest, with the Bureau of Labor Statistics estimating that the broader field of broadcast and sound engineer technicians to grow by seven percent between 2014 and 2024.
What are some skills and experiences that will help you build a successful home theater installation business?
Obviously, previous experience setting up your own home entertainment system and those of your friends and family is really valuable. While not required, any formal education in audio and video related fields can also help you set this business up more quickly. Finally, any experience you may have had working in a similar field as an employer who offers this service (such as Best Buy) can help you understand how the competition works and to help you set your business apart,
What are the costs involved in opening a home theater installation business?
Perhaps the best thing about a home theater installation business is that it has a truly low start-up cost. In fact, you could likely start your business for about $3000, with $500 of that going towards a professional website, $500 going towards getting insurance, and the rest going towards a mixture of radio, newspaper, and online advertisement. The nature of the business requires traveling to your clients' homes, so you have no real overhead of your own. Similarly, clients will have already paid (or will order themselves) any of the equipment they want to set up. In short: you show up, you set things up.
What are the steps to start a home theater installation business?
Once you're ready to start your home theater installation business, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your home theater installation business is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your home theater installation business keeps your finances organized and makes your business appear more professional to your customers.
- 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.
- 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.
- 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.
- 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.
- Establish a 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. Save 15% when you create a business website with Weebly.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Where can I 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.
What are some insider tips for jump starting a home theater installation business?
Be sure to call around your area and see what your competition charges and what services they offer. This lets you make both your prices and your services competitive and enticing for your customers.
How to promote & market a home theater installation business
As mentioned earlier, it's worth initially advertising via traditional channels such as newspaper and radio. However, don't overlook the power of internet advertising. You can advertise this way via your own website, through social media pages you will create, and through paid online advertising.
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How to keep customers coming back
In addition to the above, consider developing working partnerships with local stores that sell audio and video equipment so that you can advertise for one another. One savvy bit of advertising might be to advertise at your local theater, telling prospective customers that you will help bring the classic theater experience to their homes. In terms of customer retention, try to enroll all of your customers (and prospective customers) on a monthly email newsletter. This lets you advertise new products and services, relevant coupons or deals, and anything else that helps keep your business on their minds.
How and when to build a team
The nature of this business ensures that you will spend most of your time working alone. One possible exception may occur if your business branches out to offer more complex services such as home automation. Because of the complexity (and possible local or state laws requiring certification), it may be worth it to periodically work with a certified electrician to help with these particular jobs.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an AV Installation business. 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.
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
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.
Home theater installation businesses should require 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.
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Certificate of Occupancy
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 AV 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 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 AV installation business will be in compliance and able to obtain a CO.
How much can you charge customers?
Your prices may vary considerably based on the exact service you are performing, how much competition you have, and the general economy of the area. For instance, you might charge between $300-$1000 for a full setup that includes setting up a TV and surround sound stereo system. This charge would include installing any relevant boxes and completing any relevant wiring and any relevant cable setup. Typically, you would create a chart of prices, though, that allows compares to pay less for a single specific service. You may also charge separate fees for consultation (simply helping people plan their home theaters) and possibly more specialized services, such as any home automation in the room.
What are the ongoing expenses for a home theater installation business?
Aside from paying approximately $500 for insurance per year and $100 per year to maintain your website hosting, this job has no ongoing expenses aside from fuel spent driving to customer's homes. Also, you may periodically decide to run more advertisements offline, online, or both. Other than this, your customers will be paying for and providing all of the materials, so you have no need to store large amounts of equipment.
How much profit can a home theater installation business make?
The nature of this business means that the amount of profit that you make is entirely up to the amount of customers you have and the array of services they require. For instance, if you charge $500 for basic home theater installation and service two hundred customers in the area, then you can turn this into a six-figure job. Realistically, you will make less than that (at least, initially), but this is also a job that can easily be performed “part-time” while you are starting out. This allows you to gauge how regularly your services will be required in this area.
How can you make your business more profitable?
The main key to making this business more profitable is expansion. Specifically, expanding the services that you offer to include things like home automation automatically increases your potential customer base. And expanding your customers to schools, universities, and corporations that may need help setting up media rooms not only gives you more customers, but may give you a regular client that calls upon you for years to come. Finally, you may consider offering more services in terms of finding home theater equipment and procuring it. Realistically, this doesn't take you that long, but a customer who feels out of his depth will feel relieved that you are willing to do this.