Start a personal shopper service by following these 9 steps:
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 guide to starting your personal shopper service. 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 shopper service?
The costs involved with opening this business are very minimal. This job can be started from home, and most client interaction will be via phone, email, or at their own homes. It is very easy to start this job for less than $2,000. This amount assumes you pay $500 for a professionally-designed web page and invest the rest in traditional advertising, such as newspapers, radio ads, and television ads. Depending on your specialty, certain demographics (such as older people) may pay more attention to these “old media” ads than they do to online advertisement, so it is good to offer a balance.
What are the ongoing expenses for a personal shopper service?
There are almost no ongoing expenses for this job except the variable cost of fuel, the cost to host your website (typically less than $100 a year), and however much money you want to spend on traditional advertising each month (typically $250 or less, at least until you have more clients under your belt). Beyond this and any upkeep on your vehicle, you functionally have no other expenses.
Who is the target market?
In many cases, elderly people will be your preferred clients. In most areas, they are the group who most requires personal shopping services. This group is also likelier to enjoy personal interaction and will be friendly when you meet face to face.
How does a personal shopper service make money?
Most personal shoppers charge an hourly rate for their assistance to customers. In rarer cases, you may affiliate yourself with a business that sells certain products and receive a commission for any of those specific items that you help sell.
How much can you charge customers?
Your hourly rate has a high degree of flexibility, and some shoppers charge between $20 to $100 or more per hour. Your rate will likely depend on the complexity of your services (picking up groceries based on a list is much simpler than being someone's personal fashion shopper and consultant for hours at a time, for instance) and how much competition you have in the area. You may also experiment with different pay models such as charging customers a fixed amount plus a percentage of the overall receipt (typically between ten and fifteen percent).
How much profit can a personal shopper service make?
The exact amount of profit you make depends on factors such as the number of clients and how much you charge them. Some studies estimate average shopper salary to range from $20,000 to $70,000 a year, though really successful shoppers can make this into a six-figure job. Depending on your own schedule and the needs of your clients, it is possible to start this line of work as a side job (doing things like grocery shopping in the early evening) until you have enough clients to make this your sole income stream.
How can you make your business more profitable?
Find a niche service to provide early on and stick with it until you are a master. Consider offering promotional deals, such as a discounted rate for the first week: this allows clients to see that your services are worth the full price. Finally, use all means of communication available—if clients know they can text, call, or email you at a moment's notice, they will see you as truly reliable and use your services more often.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. 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 shopper service is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
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.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
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 shopper service. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
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.
For more 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.
Personal shopping 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 of one such services agreement.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
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 shopper service
As mentioned above, the best ways to promote and market your business depend on what you specialize in and who your key demographic is. Older clients are likelier to read the newspaper each day and to consume radio and TV advertisements. For this audience, paying more time and money to be featured in these forms of media will help you stand out. For fields skewed toward younger audiences, such as business and fashion, you should use your website to promote yourself and your services and develop a social media presence through venues such as Facebook and Twitter. Such venues do online what a good personal shopper should always be doing: developing solid relationships with clients.
How to keep customers coming back
In addition to the forms of advertisement mentioned above, the best way to attract customers is to use your first meeting to show that you are caring, attentive, and discreet. Customers must feel free to share their insecurities with you (you may be buying their underwear, medicine, and other awkward purchases) and must know that you always have their best interests in mind. Retaining customers is a natural function of several factors. Your speed, efficiency, and ability to save customers money will make them want to retain your services. Your ability to be a good conversational partner and confidante will help build their trust in you.
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 Shopper Service In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
More so than most businesses, being a personal shopper is ideal for extroverted people who thrive on meeting and speaking with new people. This is because the best shoppers develop a friendly relationship with clients to better understand their needs. The job is also best for those who are intimately familiar with their city or region: this will help you navigate traffic on busy days, find the client's requested items quickly, and then deliver them in a timely manner.
What happens during a typical day at a personal shopper service?
The day-to-day activities of this job are very straightforward: you will communicate with current clients and possibly communicate with prospective clients. You will discover what your current client needs and then retrieve these things for them and bring them back. When you are not doing these things, you will likely be working on your online advertising presence and possibly researching some of the more esoteric or specialized client requests.
What are some skills and experiences that will help you build a successful personal shopper service?
Broadly speaking, the best skill to develop for this job is skill with interviewing. Pitching yourself to clients in person is often like a job interview, so learning how to project both confidence and warmth will help you land clients. You can also leverage personal skills and experience in certain areas to become a more specialized shopper, such as a chic fashion expert marketing themselves as an image consultant.
What is the growth potential for a personal shopper service?
The growth potential for this business is modest. Personal shopping services typically grow commensurate with the retail industry, which is projected to grow seven percent between 2014 and 2024. Certain areas have greater potential for growth if they have more of a population (such as the elderly) that are likely to use such services.
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Take the Next Step
Find a business mentor
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 shopper service?
Be sure to tailor your appearance to your specialty. If you are primarily grabbing groceries, then comfortable attire (such as jeans and a polo) may be appropriate. For those advertising themselves as business consultants, a suit may be more appropriate, whereas image consultants should be wearing modern and stylish couture. Once you know who your primary client base will be, research the things they are interested in or concerned about. This lets you “talk shop” with clients and build relationships. Finally, make sure you are up to date on the various apps and online methods of saving clients money on the things they want you to buy. The more you demonstrate value by saving money, the longer they will keep you hired!
How and when to build a team
The nature of this business (including developing intimate relationships with customers) typically means it is a one-person operation. However, if you develop a network of clients across a city or area that you cannot reasonably service yourself (especially when factoring in drive time, shopping time, and so on), you may need to take on a partner or a small team in order to meet everyone's needs.