How to Start a Tile Business

Part 1 - How to start a Tile business - Background

A tile store sells, repairs, and sometimes installs tile. Tile comes in a variety of sizes and shapes and can be used as flooring, as counter tops, a wall surface, and in bathrooms. It is generally sold by the box, with square footage dimensions listed to assist in determining how much product is needed for a project.

Our guide is in 3 parts:

• Part 1 - How to start a Tile business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a tile business?

Your greatest investment will be the actual retail space. Take the time to choose a location that’s easily accessible and offers ample parking. Rent and deposit costs vary from region to region, but experienced tile store owners advise budgeting between $2,500 to $5,000 to secure a location.

Once you’ve found a location, it’s time to start designing your showroom. The following items should be factored into your budget:

• Fixtures – To reduce costs, consider purchasing used whenever possible. You could also approach the tile distributors you’ve partnered with; many of them have displays designed specifically for showrooms.

• Inventory – This number varies depending upon how you wish to serve your customers and the retailers you partner with.

• Computer and accessories – $1,000

• Point of Sale software – Most software can now be customized to fit your retail needs – $1,000 – $2,800

• Marketing materials

• Insurance – Speak with a professional to ensure your insurance needs are met.

What are the ongoing expenses for a tile business?

You’ll need to budget for the following items, above and beyond standard overhead costs:

• Payroll – this includes payroll taxes, benefits, and Workman’s Comp

• Marketing and networking

• Annual insurance policy

• Inventory replenishment

It’s recommended that you budget for a minimum of $5,000 monthly, depending upon how many workers you employ and how large your showroom is.

How does a tile business make money?

Tile stores make money by selling and installing tile to individual customers and, in some cases, local contractors. Some retail establishments offer tile cleaning and repair services, depending upon the needs of their community.

How much can you charge customers?

Pricing varies, depending upon size, manufacturer, and quality of product. Average cost is $2-$5 per square foot.

How much profit can a tile business make?

While is it always advised to budget for little to no profit the first one to three years, many tile stores report a profit of more than $50,000 their first year. Your business’ profits will start to see a steady incline, as your knowledge of the industry starts to grow.

How can you make your business more profitable?

Although it requires additional licensing, adding tile installation to your list of services is the fastest way to increase profits. To remain competitive, most tile businesses offer additional flooring inventory and installation options, such as carpet and wood floors. As you get to know the needs of your clients, you could also consider selling the supplies needed for those do-it-yourself customers.

Day-to-Day and Growth

What happens during a typical day at a tile business?

Most days at a tile store are spent managing retail traffic. Employees will let customers browse the showroom, answering any questions that might come up. Many tile showrooms offer clients an opportunity to actually see their designs before purchasing by making design software available on-site.

Additional daily tasks include stocking the showroom’s inventory, rotating in-store and window displays, processing transactions, and scheduling any services that are required post-transaction. Store managers or owners will also need to handle administrative duties such as managing finances, the marketing strategy, and networking within the community.

What are some skills and experiences that will help you build a successful tile business?

A tile store owner should be well-versed in all types of flooring, with tile as their specialty. While it’s not necessary to be an installer, you’ll often be asked questions that require basic installation knowledge. Some experience in interior design would also prove beneficial. It is recommended that you spend a year or two working in a showroom or at a large home maintenance retailer. This will not only provide you with the knowledge needed to run a showroom, it will help in gaining a deeper understanding of how to communicate with consumers.

As the owner, it’s also important to possess strong leadership skills, business acumen, and be able to communicate with a variety of different people. The relationships you build with suppliers will be as important as those built with customers and your staff.

What is the growth potential for a tile business?

A tile store has significant room for expansion. The key to realizing long-term growth is recognizing that there are many varied design tastes. By offering many tile options, you look to create a buying market for every potential customer. To expand from a local provider to a national retailer, however, your showroom should expand beyond tile, offering carpeting and other flooring options.

The World Floor Covering Association and American Floorcovering Alliance both help members stay abreast of the latest in industry trends, tools, and technology. They can also assist in devising a sound marketing strategy and business plan.

What are some insider tips for jump starting a tile business?

While it’s tempting to fill your showroom with every available tile, consider getting to know the needs of your clients on a more personal level beforehand. Stay current with industry trends to stay current with customers’ needs.

How and when to build a team

Prior to opening your doors, you’ll want to have compiled a team of professional and knowledgeable employees. As your business starts to realize significant growth, you will need to consider adding to your showroom team.

Part 2 - Is a Tile business the right fit for you?

Part 3 - Action plan to launch your Tile business in 90 days