Flooring Business: How to Start and Succeed

When it comes to finances, it’s hard to find a steadier sector of the home improvement industry than flooring. From a global perspective, the flooring market was valued at $388.24 billion in 2020 with a compound annual growth rate (CAGR) of 6.1% from 2021 to 2028, when it’s expected to reach $621.54 billion.

Floor Covering Industry at a Glance

In the floor covering industry, revenue streams can be as diverse as the many options that customers have (hardwood, carpet, laminate, vinyl and tile, to name a few) and the types of customers themselves (homeowners, landlords, commercial business owners, etc.). Some flooring businesses decide to focus only on the installation of the floors, while other flooring businesses add a physical brick-and-mortar retail showroom that displays product choices. In both cases, your business is involved in measuring and installing in the consumer’s home.

The majority of a flooring company’s revenue comes from flooring installations. Some companies offer additional services, such as refinishing and flooring repairs, but your primary revenue stream will be from installing flooring of various types for various sizes of homes.

Although the flooring industry has been identified as one of the more difficult trades to master, with entire institutions created to train professionals, the recent surge in the flooring industry has made it a worthwhile pursuit. As people have been forced to spend more time in their homes for both remote work and daily life in general since the onset of the pandemic, one of the first things they look to upgrade is their floors. Historically low mortgage rates have also significantly contributed to the flooring industry’s overall growth.

How to Start a Flooring Store

For those interested in opening a flooring business, here are a few things to take into consideration.

1. Determine if the flooring industry is right for you. The industry has good income potential, allows for a flexible work schedule, allows you to be your own boss, and is recession-resistant.
2. Gain the necessary knowledge and skills. This may require taking a training course or working as a junior installation contractor to learn from more experienced contractors.
3. Know your market. If you decide to have a retail flooring showroom, look for locations with lots of drive-by traffic near well-traveled intersections. Research your target audience and what they need from your flooring enterprise — and where they might live and work in relation to your location.
4. Develop a business plan. All new businesses need a plan when starting out. This plan should be flexible but should set goals for your business and have a general outline of how you intend to reach them.
5. Consider your branding and marketing. What marketing programs, strategies, and tactics will you use to drive business? What will your logo look like? What will your color scheme be? What social media platforms will you supply with unique, timely content to cultivate your audience and grow your brand? You may want to hire an expert to help.
6. Understand your supply chain and acquisition costs. Your business will require a number of tools, including carpet stretchers, air compressors, and table saws, to name a few. There are thousands of flooring vendors across the country. You must carefully select your vendors and their product offerings to ensure product quality and that you get the best price.
7. Research alternative funding sources. Startup costs for a flooring business can cost tens of thousands of dollars before a single sale is made. A variety of factors determine this cost, including the size of your location and whether you choose to rent, lease, or buy. Create a plan that includes your total investment and maps out all potential funding sources. This is usually a combination of loans, investors, and self-funding. A good place to start is the SBA website.
8. Do the paperwork. You need to register your business with your state and local governments. You’ll need a business license, as well as the necessary insurance for both your business and your employees.

Ideas for Maximizing Sales & Profits

For those wanting to seriously grow sales and profits in the floor covering industry, there are a few approaches to consider:

1. Build customer loyalty. Put forth as much time and effort on keeping current customers as finding new customers. Current customers will not only come back, they’ll create new leads by referring family and friends. The ProSource marketing programs (refined over 30 years in the industry) allow our showrooms to build strong relationships with our trade pro members, who buy from us an average of seven times per year.
2. Improve your buying. Next to pricing, the biggest determinant of profit margins is usually buying. Selecting the right vendors and negotiating the right prices for your market will allow you to offer the best price to your consumer – driving sales while lowering your cost of goods. Buying power is hard to come by as an independent entrepreneur, but ProSource franchisees enjoy the buying power that comes from being North America’s largest wholesale home improvement franchise. ProSource’s buying team works with all major flooring suppliers obtaining prices and rebates not possible by independent flooring stores.
3. Use the latest technology. To succeed in today’s business world, you have to have access to the latest technology. Tools for CRM, POS, inventory management, design software and more are needed not only to increase your staff’s productivity but to maximize profitability. All ProSource showrooms have access to a state-of-the-art technology solution built for the flooring and home remodeling industry.
4. Lower inventory and accounts receivable. Carrying inventory means that your cash is tied up with the inventory in your warehouse versus investing in other areas of your business, which can generate greater sales and profit growth. At ProSource, franchise owners carry a limited amount of inventory. Our showrooms provide financing alternatives from industry partners to our trade pros and their clients – we don’t extend credit directly and thus, no bad accounts receivable.
5. Create a value proposition. While the flooring industry growth means more opportunities for you, it also means more competition too. Research trends in your local market and try to identify services and products that your competition has overlooked. ProSource offers clients a unique value by offering a membership, which allows them to schedule visits at times convenient to them instead of being locked into regular business hours.
6. Consider franchising. Starting your own flooring installation company is a very involved process. Even once you get it up and running, operating a business solo is a very tall order. But by joining a franchise like ProSource, you’re provided with a variety of benefits and services, such as training, industry advice from experienced businesspeople, a support network, administrative services, and help with advertising and marketing. You’ll also be provided with a ready-made and proven business model to follow, as well as a brand name with an established reputation.

The Next Step: Consider Franchising with ProSource

We at ProSource Wholesale are excited to offer you the opportunity to join our unique B2B flooring franchise. As a ProSource franchise owner, you focus on selling products – not on measuring and installing; thus, labor and claim concerns are minimized. In addition to offering the widest array of flooring products for our trade professionals and their clients, ProSource showrooms also sell products for kitchen and bath renovations, which broadens your appeal to contractors.

Contact us today to learn more about your franchising opportunity with us.