You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your personal concierge business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a personal concierge business?
One of the advantages of this field is the low startup cost. Your personal concierge business is more about you than about inventory or overhead. For instance, you won’t need an office -- except perhaps a spare bedroom or kitchen table big enough for phone and laptop -- since, virtually by definition, most of your activities will take place offsite. And when you are working from home, you’ll be alone, so you’ll impress no one with a fancy office. However, here are a few costs you might be unable to avoid:
- Phone and computer -- Zero to $1,500. Chances are good that you have both, but they’re both critical to the operation of your business.
- Sales and marketing -- Zero to $3,500 or more. The basics of marketing your services is business cards and flyers. You need to create or hire someone to create a logo and a website that clearly promotes your services. Trade show booth rental and a well thought-out social media presence might also be part of your efforts.
- Transportation -- At least a few tanks of gas or public transit travels to get you started. Your business will take you wherever you need to go, so include travel expenses in your budget. Similarly, you might have to pay for meals or pack your own.
- Professional services and insurance -- Several hundred dollars or more. This isn’t a complicated business, but you might want to run your business category options and your business idea past a lawyer and accountant. You should also explore your liability insurance needs with an agent.
- Membership -- $90 to $300 per year, or more. The annual dues vary depending on your location, but consider membership in the National Concierge Association if there’s a chapter near you. Benefits include continued education, marketing advice and the opportunity to network and exchange rate information and promotional ideas with others in your line of business.
What are the ongoing expenses for a personal concierge business?
Your largest ongoing costs will be for the marketing of your services and such fairly modest daily expenses as gas or transportation, meals, tolls, etc. You should also keep your wardrobe up to date and yourself well groomed. How much you invest in these efforts will largely be determined by the revenue you generate.
Who is the target market?
Look for clients who are busy and have the financial wherewithal to hire your services. These individuals’ lives might be hectic because they’re raising children, working long hours out of the home, or caregiving to parents, among other reasons. Another set of client types are elderly people who can’t function as swiftly as they used to. And some companies, particularly larger corporations, offer concierge services as part of their benefits packages -- or could be encouraged to do so as a way of addressing some of the personal needs of their busy employees.
How does a personal concierge business make money?
Your main source of revenue will be from your clients for your services and, occasionally from their additional tips in appreciation. Also, consider exploring the possibility of developing referral agreements with such vendors as wedding planners, travel agents and moving companies that will enable you to receive commissions or discounts for business conducted by your clients.
How much can you charge customers?
The website Payscale estimates an average rate of $12.83 an hour, and about $25 at the top end. However, this heavily reflects paid employees of services offered by hotels and other hospitality businesses rather than independent contractors. Your own rates will be determined by how much perceived value you offer as well as by the wage rate in your location and the finances of the clientele you target.
How much profit can a personal concierge business make?
Payscale puts concierge salaries in the range of from about $21,000 to $41,500 annually. Glassdoor has the figure at a national range of around $25,400. However, both of these sources are primarily concerned with the salaries of employees for concierge services at hospitality centers. Your own revenue stream will depend on your reputation, marketing expertise, local competitive rates and other factors.
How can you make your business more profitable?
Explore the possibility of adding life coaching to your service offering. Visit this website to learn about life coaching and how to gain industry certification.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your personal concierge business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a personal concierge service. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Personal concierge businesses should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your personal concierge business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a personal concierge business
A savvy online and social media presence is critical. Make sure you clearly express the range of your services. Join Facebook groups where potential client types gravitate, but don’t hard-sell here. Get to know your new web friends before explaining what you do, and wait for them to come to you. Another way of promoting your services is with a simple flyer posted where your prospects congregate. Ask permission first, but you might post your services in employee lunchrooms, restaurants where workers take midday meals, in coffeehouses where moms hang out, and in the local malls and supermarkets where they shop. If you have more capital for marketing, consider renting booths at trade shows for brides, home and garden shows, and other relevant shows and events.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
First, decide the profile of your ideal clientele. Will your services primarily be targeted to mothers with young families, harried workers, the elderly or other groups? Once you’ve established contact, handle your assignment with such a degree of excellence that your clients will tell their friends in similar need or offer referrals if asked. Don’t be afraid to ask your clients to refer you to their family and friends.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Personal Concierge Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Energy, flexibility, organization, and an entrepreneurial spirit are your friends. Each client and their needs might be wildly different, so you should enjoy meeting each day’s unique challenges. You must be good at marketing yourself and enjoy meeting people and being a part of their lives to the extent they need and allow.
What happens during a typical day at a personal concierge business?
Your typical day is too hard to define since each will be different depending on the mix of your clientele and services extended, but you must make room for the following basic activities.
- Promoting your services and seeking clients in unique and creative ways
- Scheduling time to meet with new prospects
- Undertaking the assignments expected of you
- Handing the everyday office tasks demanded of everyone in business, from scheduling your time to invoicing clients and paying your bills
What are some skills and experiences that will help you build a successful personal concierge business?
You must get along well with others and project an aura of self confidence and accomplishment. You must be a well organized multi-tasker with strong sales skills. You should also be able to create a website that effectively introduces you to your public and be adept at social media to broaden your appeal.
What is the growth potential for a personal concierge business?
Since this is a field of business that can be considered a luxury that some could dispense with if personal budgets had to be cut, personal concierge services are closely tied to the economy. As long as the local economy stays at least fairly strong, there’s opportunity for growth. Or you might strive to become so indispensable to your clients that they’d see your services as more of a necessity than a luxury.
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a personal concierge business?
Start slow, with a single client on a part-time basis. For instance, it might be a mom who needs you after the kids get out of school and that might allow you to continue another part-time night or weekend job. Another idea is to approach businesses first as a concierge to employees. That way you can possibly count on enough business to devote your full-time energy once you sign a contract. Approach larger corporations via their human resources department.
If you have more cash on hand than answers (if will cost you $20,000 upfront) consider buying a franchise of an existing concierge business. The advantage is that someone else got the kinks out of the idea and can serve as a guide to establishing your own successful business. But be sure to first carefully research the opportunity and make sure it’s to your benefit before investing in such a situation.
How and when to build a team
Unless you explore franchising opportunities of your own, you probably won’t have a need for employees. However, you can build collaborations with other service providers like florists or travel agents to support or expand your service offering.