How to Start a Personal Shopper Service
A personal shopper business provides assistance for clients who need (or simply want) help buying various items. One common purpose for personal shoppers is to pick up groceries and prescriptions for the elderly who cannot do it themselves. However, some personal shoppers are hired by clients who are not necessarily elderly but simply too busy to buy these things themselves. Some personal shoppers provide more specialized assistance for clients, such as helping them discover a style or fashion that best showcases their features.
You may also be interested in additional low cost business ideas.
Learn how to start your own Personal Shopper Service and whether it is the right fit for you.
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Start a personal shopper service by following these 10 steps:
- Plan your Personal Shopper Service
- Form your Personal Shopper Service into a Legal Entity
- Register your Personal Shopper Service for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Personal Shopper Service
- Get the Necessary Permits & Licenses for your Personal Shopper Service
- Get Personal Shopper Service Insurance
- Define your Personal Shopper Service Brand
- Create your Personal Shopper Service Website
- Set up your Business Phone System
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.
Exploring your options? Check out other small business ideas.
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 will you name your business?
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
Luckily we have done a lot of this research for you.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Personal Shopper Service Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
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.
STEP 2: Form a legal entity
The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your personal shopper service is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
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 through the IRS website. If you would like to learn more about EINs, read our article, What is an EIN?
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
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.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
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.
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.
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.
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.
FInd out what types of insurance your Personal Shopper Service needs and how much it will cost you by reading our guide Business Insurance for Personal Shopper Service.
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.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
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: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.
Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
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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.
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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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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.