Flooring is an art — an intricate blend of precision and creativity. As you masterfully lay each plank or tile, you’re crafting more than just floors — you’re setting down dreams. Just as the right foundation is critical for any building, so too is the foundation for your business.
That’s where a limited liability company (LLC) comes into play. As you craft exquisite styles for your clients, let an LLC be the legal foundation that protects and propels your business forward. Let’s explore why setting up an LLC for your flooring business is the right step for many craftsmen in the flooring industry.
An LLC, or limited liability company, is a business structure that offers the flexibility of a sole proprietorship or partnership while affording you the personal asset protection of a corporation. Unlike a sole proprietorship or partnership where business and personal assets are interlinked, an LLC usually keeps them separate, helping ensure that personal belongings like homes or cars aren’t vulnerable to business liabilities.
But, compared to a corporation, an LLC is generally easier to run and maintain. While it’s not a legal requirement to start an LLC, it can be a strategic choice for many flooring businesses.
Why is an LLC an appealing business structure for your flooring company? As we’ve just mentioned, it comes with a lot of benefits, including a protective shield commonly referred to as limited liability protection. If your flooring venture encounters any financial troubles or lawsuits, your personal assets usually remain protected.
Next, an LLC paves the way for tax flexibility. LLCs are, by default, taxed as pass-through entities, but they can also elect S corp or C corp status. In some cases, a different taxation structure can create a tax break for small business owners. The real benefit is that you get to choose with an LLC. It’s highly recommended to chat with a business attorney or certified public accountant (CPA) to get advice regarding which tax structure will benefit you most.
Finally, an LLC instills a sense of credibility. When customers hear or see “LLC” associated with your brand, they may be more likely to trust your expertise. Good optics for brands can be powerful marketing tools.
Identify the LLC package and services that fit your needs and then get started.
Every state has a slightly different procedure for starting a flooring LLC, but the basic roadmap is the same. Let’s walk through the process step by step.
Decide what you’ll call your flooring business. Naming isn’t just about picking cool words — it’s about building a brand. A catchy, memorable business name can be a game-changer. It should resonate with the flooring business and be easy to remember. You might also want it to reflect your brand. For example, if you specialize in certain wood floors like walnut, maple, or hickory, your name might reflect that. Likewise, you might decide to have your name represent your values like being eco-friendly, offering unique perks like hand-scraped finishes or engineered hardwood flooring, or selling the latest styles.
And, of course, you have to comply with state requirements for LLCs, which usually means you must have “LLC” or “Limited Liability Company” in your name. Additionally, some states might have restrictions on certain words or require additional clarifications. Plus, ensuring your chosen name isn’t already in use is paramount. A quick visit to the state’s business registration site can help verify its availability.
In the process of choosing your name, don’t forget to secure your online territory. Acquiring a matching domain name helps ensure your flooring LLC is visible and accessible in the digital realm. You want it to be easy for your customers to find you in their browsers.
Designate someone to serve as your registered agent. Think of a registered agent as your business’s official correspondent. Their primary job? To receive and forward crucial official communications from the state and others, the most important one being service of process (notice of a lawsuit against you). While you could act as your own agent, having a professional service — especially when you’re knee-deep in flooring tasks — helps ensure no important document gets overlooked.
Using a third-party service like ours as your registered agent is often the best route. Why? Because a registered agent is required to be present at their listed address during all regular business hours. And, if you’re installing flooring in people’s homes, you’ll need the freedom to leave your shop.
Plus, the LLC’s registered agent receives notifications regarding potential lawsuits — not something you want a client or business partner to see you receive. Hiring a third-party agent keeps any legal service of process private and discreet.
File your LLC formation documents. Consider this step as making your LLC officially recognized. While the exact nuances might differ from state to state, this step primarily involves filling out a form and paying a fee. Crucial information on the form includes your business name, address, registered agent, and more.
Every state has its quirks, so it’s essential to do some homework to ensure you know what your process looks like. While this document is usually called the Articles of Organization, some states might call it the “Certificate of Formation” or “Certificate of Organization.” Regardless of the name, its purpose remains the same: It’s your ticket to enter the business arena as an official flooring LLC.
Write an operating agreement for your LLC. An operating agreement is like a constitution for your LLC — it’s fundamental in defining the roles, responsibilities, and operational protocols of your business. Think of it as a roadmap or rulebook for how your flooring business will function, both now and in the future. Most states don’t require you to write one, but it’s recommended whether it’s required or not.
Even if you’re a lone wolf running a single-member LLC, an operating agreement is indispensable. It gives clarity, helps ensure smooth operations, and in the unlikely event of disputes, acts as a reference point. Also, it solidifies the legitimacy of your business, showing that you’ve thought things through.
Get your EIN and register for taxes in your state. An EIN (employer identification number) is like a Social Security number for businesses. An EIN is always required if you’re going to hire employees or have multiple owners, but it’s also recommended if you want to get a business bank account. You can obtain an EIN online for free, or you can avoid the hassle and let our EIN service get one for you.
But don’t stop at federal taxes — address state taxation, too. Each state has its unique tax framework. Depending on where your flooring business operates, there might be specific sales taxes, employment taxes, or even property taxes. Some states also require you to get a state tax identification number. It’s always smart to consult with a local accountant to navigate the nuances.
Obtain the licenses and permits your flooring business needs. Kicking off without the required licenses and permits is like laying carpet on quicksand. In some areas, you’ll need a general business license. Depending on your location, this might be mandated at the city, county, or state level (or even a combination of those three). That said, many businesses don’t need a general business license at all.
For a flooring business, there might be additional layers of licensing. These could range from construction permits and environmental licenses to health and safety certifications, particularly if you deal with specific flooring chemicals. Always double-check local requirements to ensure you’re not missing any crucial permits.
Thankfully, you don’t have to research all the requirements on your own if you’d rather not. Our business license report can tackle this task for you, compiling a list of all the licenses and permits you need for your unique flooring business.
Submit your annual report (or biennial report) on time. Regular check-ins with the state through annual reports are a common mandate for LLCs, as are their accompanying fees. This entails updating them about any significant changes in your business. And while it might sound like a chore, it’s pivotal for maintaining good standing. Due dates for this report vary depending on your state and, potentially, when you formed your business.
Miss your due date, and you could be treading on thin ice. Delays or oversights in filing can attract fines or worse — in a worst-case scenario, your LLC could be dissolved. Always mark the deadlines on your calendar to avoid these penalties.
Walking the entrepreneurial path is exciting but has potential pitfalls. A classic mistake? Skipping thorough market research. Without understanding your competitors or target market, you’re setting up for a fall. Then comes the financial aspect. Never underestimate initial startup costs — always factor in extra for unforeseen business expenses.
Staying updated with customer feedback is invaluable. A flooring business thrives on word-of-mouth. If a client isn’t satisfied, it’s not just one client lost, but potentially many more. So, keep your ears to the ground, adapt to customer feedback, and, most importantly, never stop learning.
Feel the weight of red tape on your shoulders? Let us lighten the load. Our LLC formation services can jumpstart your dream for as little as $0 (plus state fees). What’s more, our Worry-Free Compliance service helps ensure you stay compliant with your state government. We tackle the paperwork, while you carve out impeccable floors. Ready to build on a strong foundation? We’ve got your back.
Disclaimer: The content on this page is for informational purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Flooring businesses can be quite profitable. With the continual need for home renovations and new construction projects, there’s a consistent demand for flooring services. Factors like the quality of craftsmanship for the wood flooring and carpet you install, choice of materials, and range of services offered can influence profit margins. Additionally, as with any business, effective management, pricing strategies, and customer service play pivotal roles in determining profitability.
Success in the flooring business often hinges on a blend of quality craftsmanship and sharp business acumen. First and foremost, delivering top-notch flooring installations and repairs should earn you a strong reputation and repeat customers. Keeping up with the latest styles, materials, and technologies in the flooring industry can also set you apart from competitors. Beyond the hands-on work, investing in effective marketing, fostering strong relationships with your suppliers, and offering exceptional customer service can propel your business to higher levels of success.
Having a separate business bank account for your flooring LLC is crucial. It helps ensure that your personal and business finances remain distinct, which simplifies accounting and tax preparations and produces clearer financial records. Furthermore, having a dedicated business account lends your LLC an aura of professionalism and credibility when dealing with clients and suppliers. It’s an essential step in maintaining the liability protection that an LLC structure offers, as commingling personal and business funds can jeopardize that protection.
Delivering superior customer service in the flooring industry goes beyond just laying down beautiful floors. First, it’s vital to actively listen to your clients’ needs and preferences for their space, ensuring that the end result aligns with their vision and style. Timely communication — keeping clients informed about project progress, potential issues, and solutions — is paramount. Additionally, offering after-service support, such as maintenance tips for high-traffic areas or addressing any concerns promptly, can set your business apart. Lastly, a gesture like following up post-installation to check in on client satisfaction can make a significant difference in fostering long-term relationships.
Best LLC Businesses to Start
We break down the LLC formation process in detail for different types of businesses. View all of our guides below.
Start an LLC in Your State
When it comes to compliance, costs, and other factors, these are popular states for forming an LLC.
Ready to Start Your Flooring LLC?