Important Things to Know Before Starting Your Own Floor Installation Business

By Sharon Schweitzer | January 17, 2020

Do you want to start your own flooring business and ready to take the important steps? Then it is

time to register your business with the state. To help you out, we have made this simple guide

where we will explain all the important steps you need to take to start your business. There are

many great flooring companies such as Ultra Decking. Following these steps will ensure that you

are on the right track.

Business Plan

Before starting any kind of business, you need to have a clear plan to make it a success. This

plan will help you decide on a roadmap that you need to follow in growing your business. The following

are some of the important things to consider:

Cost of Opening a Floor Installation Business

Like many other businesses, this business also has to be insured. The insurance liability coverage

is between $350 and $900 generally. Moreover, you need to have a shop and you need to add the

cost of rent which depends on the size of the shop to the business opening cost. Other expenses

include material and wages which depend on the size of your start-up.

Ongoing Expenses

There are some ongoing expenses for a business which includes raw resources, and equipment

maintenance. Raw wooden for flooring can cost $8 per square foot. On the other hand, some

high-quality materials can cost up to $20 per square foot. You also need to pay the workers

which will cost you 10 to 18 USD per hour. Other costs include insurance premiums, advertising

costs, marketing costs, and shop utilities.

What is Your Target Market?

One of the important topics to discuss is your target market. You need clients that can provide

you consistent work. One of the best clients you can have in this business is housing

development companies. These companies build new houses and always need flooring companies

to install flooring in their newly-built houses. Apartment management teams can also provide

you consistent work. They are a great way to build your network, because such clients are

always in contact with other management teams. Individuals who want to install or redo the

flooring in their home can also be your clients.

How You Can Make Money?

Well, the flooring business makes money by installing carpet, tile floor, and hardwood. There are

other types too that can be profitable and one of the large profits comes from these types. You

can also repair, stain and trim the already installed floors. However, these maintenance services

are very limited.

How Much You Can Charge?

It is an important question. Well, a simple wood flooring can cost $4000. Carpet installation

costs $1600 and Laminate flooring installation costs around $2000. One of the cheap flooring

options is linoleum and Vinyl which costs about $1500. However, the exact cost depends on the

area.

Profit You Can Make

Do you know that the annual profit of the floor installation industry is $23 billion? The top

companies in this business earn only five percent. Medium-sized companies earn about $230,000

per year. These numbers are enough to explain how profitable this industry can be for you.

How You Can Earn More?

There are always opportunities where you can boost your revenues. You can offer speedy

services at no cost. If you can provide fast services, it can be really helpful. Another thing is to

satisfy your customers. Try to reduce cleaning expenses and these clients will refer more clients.

Form A Legal Entity

You need to form a legal entity for your business such as an LLC. So, if someone sues your

business, you are not personally liable. Other business structures involve LLC’s DBA’s and

Corporations.

Register for Taxes

As a business, you need to pay taxes to the federal and state. It should be done before starting the

business. All you need is to register for EIN which is free and easy.

Business Bank Account and Credit Card

The next step is to open a dedicated business account for your business to protect your assets.

You must not mix your personal and business accounts because in this case, your assets are at

risk in case your business is sued.

A business bank account separates your assets from the company’s which is necessary for

protecting your assets. Moreover, it makes easier for you to maintain the company accounts and

file tax returns.

Business Accounting and Licenses

Keep a record of your income and expenses is a must to understand the financial performance of

any business. Moreover, accounts make it easier to file income tax returns.

Moreover, you need to acquire the necessary licenses and permits to prevent any fines. Without a proper license, the government can shut your business.

Service Agreement

Before starting any project, the client should sign a business agreement. This agreement should

explain all the things that can minimize the risk of legal disputes. Also, make sure that both of

you agreed on the payment terms and conditions.

Certificates of Occupancy

As a flooring company, you need to work out on a physical location. In this scenario, your

company needs a certificate of occupancy to confirm that you are following all the government

rules and regulations. The customer needs to obtain a CO for you. Moreover, make sure the

customer can obtain a CO before leasing.

Commercial Property Insurance

Commercial property insurance helps in protecting your business from surprises like theft, fires,

natural disasters. Because these kinds of surprises can affect the buildings. Moreover, you can

get business interruption coverage. It will cover your lost income in case your business closed

after a claim. Moreover, in the case of fire damage, the business interruption will help you.

Business Insurance

Every business should have insurance as it is recommended by most business owners. In

many states, the worker’s compensation insurance is the legal requirement. Moreover, the

insurance will help save your business in case of any disaster.