How to Start a Flooring Contractor Business in 9 Steps
Starting a flooring contractor business is a gratifying career. Don't let the opportunity to create your successful flooring contractor business pass you by without being prepared first.
Here are nine easy-to-follow steps to start your own flooring contractor business on the right foot so you can grow successfully for years to come.
1. Write A Business Plan
A business plan is a vital document for any company, and it's one of the first things you should be writing before you even start your business. A well-written business plan can help you understand your company's strengths and weaknesses, as well as help you identify areas for growth and opportunity.
A strong business plan will also give you credibility with potential investors or lenders and help you formulate an effective marketing strategy.
A business plan is a written document that describes your business and how you intend to operate it. It should be clear, concise, and contain all the relevant information to help you achieve your goals.
Business plans are often used as a marketing tool to help secure your new business financing. They can also help you evaluate options and provide direction for future growth.
If you're planning to start a flooring contractor business, here's what you need to know:
- Who is my customer?
- What are their needs?
- What services do I provide?
- How much will these services cost?
- What are my competitors charging?
- How do I stand out from the crowd?
- What legal considerations do I need to consider (e.g., licensing)?
For a comprehensive flooring contractor business template, consider using a resource like this from Business In A Box. This template will help guide you toward formulating a solid business plan.
2. Create a Legal Business Entity
The legal entity you choose for your flooring contractor business will depend on your circumstances. If you're starting a small business to provide services to friends and family, you may be able to operate as an individual. However, if your company is selling products or services on a large scale, you may need to create a legal entity.
The most common legal entities are sole proprietorships, partnerships, and corporations. Each structure has its advantages and disadvantages.
We've linked to resources that can help you decide which type of legal entity is right for your business goals and needs.
Here is the link to the US Small Business Administration information about the different legal business structures.
3. Obtain a Federal EIN & State Tax IDs
One of the first steps to getting your flooring contractor business off the ground is to apply for a Federal Employer Identification Number (EIN). You can get this number by registering your business with the IRS.
Once you have your EIN, you must apply for a state tax ID number. This process varies from state to state but is typically inexpensive and fairly straightforward.
To get started, visit the IRS website and click on "Employer ID Numbers" under "Businesses" in the menu bar. Then select "Apply for an Employer Identification Number."
Each state has different requirements for obtaining a state tax ID. Visit your state government's website for more information about getting a state tax ID in your US state.
4. Get Licensed
If you are a contractor and are planning on starting your own business, there are several things you must do to ensure that your company is legal.
Make sure to obtain a contractor's license in your city and state before you begin your business. This license allows you to charge people for your work legally. You can find out how to apply for a permit through your local government office or by speaking with an attorney.
We also suggest Googling "Where to obtain a contractors license in my city and state" to find the online government resources to help guide you to getting the proper licenses.
For instance, if you live in Denver, Colorado, this website guides the steps to obtaining a contractor license. You should be able to find a similar resource for your city and state.
5. Open A Business Bank Account
When starting a flooring contractor business, you need to ensure your financial situation is in order. This includes getting a business bank account and credit card and filing your taxes correctly.
Here's what you need to do:
Open a business bank account for your flooring contractor business. It's essential to keep your personal and business finances separate. You can open an account for your company at any major bank or credit union. You'll need to provide the name of your company and its tax ID number (EIN), which is usually obtained from the IRS after registering your business.
Apply for a merchant credit card so that you can accept credit cards when doing work on site. The card will carry the name of the contractor who owns it and allow them to get payment over the phone or online without having cash around all day. Credit card processing fees vary by provider but should be less than 3 percent per transaction under most circumstances. These fees are typically added to each transaction before it goes through on your end, so the amount should be negligible compared with what you're charging customers for services rendered).
6. Fund Your Business
If you are a business owner, you may be wondering how much money you should invest into your business. Having enough capital to run your business is essential, but it is also important not to overspend.
When you created your business plan, you should have outlined an estimate of how much money you think you would need to run your business. Make sure your business is sufficiently funded to grow and expand without going out of business due to a lack of funds.
Remember, acquiring customers and creating consistent cash flow for a new business takes time. Ensure you set yourself up for success by funding your business bank account with enough money to start.
7. Buy Proper Insurance
The right insurance coverage is vital to running your flooring contractor business. It can help protect your finances, employees, and customers from possible loss, damage, or liability.
Here are some tips for getting the right coverage for your flooring contractor business:
Make sure you have adequate liability coverage. This is the most critical type of insurance for any small business because it protects you financially against lawsuits resulting from accidents on your premises or in connection with work done by your employees.
Consider adding business interruption insurance to protect against lost income if a fire or other disaster shuts down your business for an extended period. You can also buy additional liability protection for specific types of claims, such as faulty wiring in homes or businesses you remodel.
Look into commercial property coverage to ensure that buildings and equipment are adequately insured if they're damaged by fire or other events covered by this policy.
Consider purchasing cyber liability insurance to protect against losses caused by hackers who gain access to sensitive data stored on computers or electronic networks at your business location or remotely through mobile devices used by employees while traveling on company business.
These are all just suggestions. Please consult a licensed small business insurance professional to find the right insurance coverage for your flooring contractor business.
Hiscox is a company that specializes in small business insurance and may be a valuable resource for you.
8. Buy Tools & Equipment
If you are a business owner and want to start your own flooring business, you have to buy quality tools and equipment for your business. For example, if you are going to work with wood floors, then you need to buy a nailer to install the wood properly.
If you work with hardwood floors, you need to buy a planer so that the floor is not damaged while cutting it down to size. It is essential that when you are buying equipment for your flooring business that it is durable and lasts a long time because if something breaks down, this will affect your profits, and it may also affect how quickly the job gets done.
The same goes for other types of equipment like sanders or buffers, which are used on different types of wood floors like hardwood or laminate.
When buying equipment for your flooring business, make sure that it is durable and lasts a long time because if something breaks down, this will affect your profits, and it may also affect how quickly the job gets done.
It's crucial to gain a new perspective on your equipment and tools from the viewpoint of a business owner who wants to produce quality workmanship on time. Make sure you invest in the tools that help you accomplish this.
9. Market Your Business
Now that you have created your flooring contractor business, it's time to make it public. If you have already set up a website for your business, this is a great way to market yourself and your services. You can also create an online presence by creating social media profiles for your business and posting updates about new projects or special offers that you have available.
You can also market your business in traditional ways, such as placing ads in local newspapers or magazines. It would be best if you also considered attending networking events where other contractors are present so they may become familiar with your company's name and its services.
Here is a quick checklist for the first marketing items you need to get the word out about your flooring contractor business.
- Create a simple, professional website for your Flooring Contractor business.
- Claim or Create a Google Business Profile
- Update Online Business Directories
- Print and hand out Business Cards
- Put a decal on your Truck or Van
Conclusion
Starting a flooring contractor business from the ground up can be incredibly daunting.
But if you follow through with the nine steps outlined above, you'll be well on to starting your business.
With logical and realistic expectations for your first year in business, you'll be well prepared to take on unique challenges.
We wish you the best of luck!