Start a tile 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 tile 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:
- 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 tile business?
Your greatest investment will be the actual retail space. Take the time to choose a location that’s easily accessible and offers ample parking. Rent and deposit costs vary from region to region, but experienced tile store owners advise budgeting between $2,500 to $5,000 to secure a location.
Once you’ve found a location, it’s time to start designing your showroom. The following items should be factored into your budget:
- Fixtures - To reduce costs, consider purchasing used whenever possible. You could also approach the tile distributors you’ve partnered with; many of them have displays designed specifically for showrooms.
- Inventory - This number varies depending upon how you wish to serve your customers and the retailers you partner with.
- Computer and accessories - $1,000
- Point of Sale software - Most software can now be customized to fit your retail needs - $1,000 - $2,800
- Marketing materials
- Insurance - Speak with a professional to ensure your insurance needs are met.
What are the ongoing expenses for a tile business?
You’ll need to budget for the following items, above and beyond standard overhead costs:
- Payroll - this includes payroll taxes, benefits, and Workman’s Comp
- Marketing and networking
- Annual insurance policy
- Inventory replenishment
It’s recommended that you budget for a minimum of $5,000 monthly, depending upon how many workers you employ and how large your showroom is.
How does a tile business make money?
Tile stores make money by selling and installing tile to individual customers and, in some cases, local contractors. Some retail establishments offer tile cleaning and repair services, depending upon the needs of their community.
How much can you charge customers?
Pricing varies, depending upon size, manufacturer, and quality of product. Average cost is $2-$5 per square foot.
How much profit can a tile business make?
While is it always advised to budget for little to no profit the first one to three years, many tile stores report a profit of more than $50,000 their first year. Your business’ profits will start to see a steady incline, as your knowledge of the industry starts to grow.
How can you make your business more profitable?
Although it requires additional licensing, adding tile installation to your list of services is the fastest way to increase profits. To remain competitive, most tile businesses offer additional flooring inventory and installation options, such as carpet and wood floors. As you get to know the needs of your clients, you could also consider selling the supplies needed for those do-it-yourself customers.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. 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.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). 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 tile 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
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!
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 tile 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.
In business where services are provided on an extended basis, a services contract is often put in place outlining terms and conditions of service.
Countertop businesses should require clients to sign a services 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, and service level expectations. Here is an example of such a service agreement.
Certificate of Occupancy
A tile business is generally run out of a workshop. 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 tile 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 recommendedto 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 tile business 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 tile business
Your target market includes both homeowners and businesses who are looking to update their homes/offices. Your marketing efforts should also include consumers who have suffered a loss such as a fire, flood, or other natural disaster.
How to keep customers coming back
In addition to standard marketing strategies, such as social media platforms and local ad campaigns, consider approaching independent insurance adjusters to set up a referral program. Approach various home and business insurance carriers to find out what it would take to get added to their partner list. This is an effective way to build steady business and create a sound reputation in the community.
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 Tile Business In Your State
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?
Entrepreneurs with experience in home maintenance and repair, tile installation, and flooring are best suited to manage a tile store. Owners should have an eye for beautiful, quality tile and should understand what tile pairs best with other household surfaces.
What happens during a typical day at a tile business?
Most days at a tile store are spent managing retail traffic. Employees will let customers browse the showroom, answering any questions that might come up. Many tile showrooms offer clients an opportunity to actually see their designs before purchasing by making design software available on-site.
Additional daily tasks include stocking the showroom’s inventory, rotating in-store and window displays, processing transactions, and scheduling any services that are required post-transaction. Store managers or owners will also need to handle administrative duties such as managing finances, the marketing strategy, and networking within the community.
What are some skills and experiences that will help you build a successful tile business?
A tile store owner should be well-versed in all types of flooring, with tile as their specialty. While it’s not necessary to be an installer, you’ll often be asked questions that require basic installation knowledge. Some experience in interior design would also prove beneficial. It is recommended that you spend a year or two working in a showroom or at a large home maintenance retailer. This will not only provide you with the knowledge needed to run a showroom, it will help in gaining a deeper understanding of how to communicate with consumers.
As the owner, it’s also important to possess strong leadership skills, business acumen, and be able to communicate with a variety of different people. The relationships you build with suppliers will be as important as those built with customers and your staff.
What is the growth potential for a tile business?
A tile store has significant room for expansion. The key to realizing long-term growth is recognizing that there are many varied design tastes. By offering many tile options, you look to create a buying market for every potential customer. To expand from a local provider to a national retailer, however, your showroom should expand beyond tile, offering carpeting and other flooring options.
The World Floor Covering Association and American Floorcovering Alliance both help members stay abreast of the latest in industry trends, tools, and technology. They can also assist in devising a sound marketing strategy and business plan.
TRUiC's YouTube Channel
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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:
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 tile business?
While it’s tempting to fill your showroom with every available tile, consider getting to know the needs of your clients on a more personal level beforehand. Stay current with industry trends to stay current with customers' needs.
How and when to build a team
Prior to opening your doors, you’ll want to have compiled a team of professional and knowledgeable employees. As your business starts to realize significant growth, you will need to consider adding to your showroom team.