Flooring businesses make money through installation of hardwood, carpet, and tile floorings. The repair or redoing of flooring, trimming, or staining is also important, but the profit margin is in the installation of new flooring.
Is a flooring business profitable? Yes, the flooring industry is a highly profitable business. The demand for new houses, offices, and renovation projects has increased significantly over the years, ensuring a steady flow of work opportunities for flooring businesses.
Major Expenses
What are the major expenses to run a flooring business?
- Materials cost 30-60% of revenue.
- Significant funds also cover salaries and bills.
Operating Profit Margin
What is the profit margin for a flooring installer? A flooring installer has a ~20% operating profit margin after paying operating costs.
Getting Started
What is needed to start a flooring business?
- Get legal business structure formation to quickly set up.
- Consider if running a flooring company fits your goals and flexibility in setting your schedule.
- The work itself involves hard physical labor.
How can you get flooring customers?
- Use quality products and depend on referrals.
- Market directly to homeowners planning renovations.
- Partner with contractors on new builds.
- Building relationships is key to success.
The average profit margin for a flooring company owner is 38-45%.
Training and Qualifications
Consider the following training courses and certifications:
- Installers of Certified Flooring (CFI).
Revenue and Growth
The global flooring market size was USD 342.88 billion in 2020 and is projected to grow to USD 517.74 billion in 2028 at a CAGR of 5.4% during the 2021-2028 period. Medium-sized floor installation businesses make, on average, about $230,000 per year. A small floor installation business’s owner can make around $75,000 within the first few years.
Labor and Costs
Startup costs for a flooring business range from $6,000 to $12,000, which include:
- All the tools needed
- A down payment on a truck or van for tool transportation
Assuming an average price of $12, and that each job will be about 150 square feet, your profit margin will be around 90%, as customers pay for all materials. If you do three jobs per month, you could bring in $65,000 in annual revenue, resulting in $58,000 in profit, assuming that 90% margin.