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 psychic 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 psychic business?
This business can be started in the home. Natural psychics may not necessarily want to create a business, and may feel compelled from within to use their gift to help others. They may do this for free or for voluntary donations. As their help for others becomes obvious, the people they help automatically tell other people about the help they received.
An example of this is the most famous American psychic Edgar Cayce. Initially, he gave his work away for free. It was a gift that he was able to use to help people. He became very popular and then later in his career in order to sustain himself and his family he charged modest fees for his readings. He never became rich, nor did he want to get rich. He was compelled to use his gift to help as many people as possible. His work is extremely well documented and sets the example of the life of a true psychic for all else to follow.
If you want to set up a regular type of psychic business, you will need to market your services as you would market the services of any other business. Basic startup costs would be a website for about $2,000, flyers for about $500, and a business license for around $300 depending on your location. You will probably want to form an LLC for about $500 to protect you from liability and you may need signage for about $1,500 in front of your office or home office. You can easily start this business for less than $5,000.
What are the ongoing expenses for a psychic business?
The expenses depend on the size of the operation. A simple home-based business will have very little expenses. An office-based business might pay a modest rent of $500 per month. A psychic telephone call center will have enormous marketing expenses of thousands of dollars per month and equipment leases in the thousands per month as well.
Who is the target market?
The best customers are the ones who have a belief that psychic services help them and they come back again and again. They also tell their friends about the successful predictions made by a psychic they work with, who gives them accurate help and is able to predict future events.
How does a psychic business make money?
There are several methods use to generate revenues, which include asking for donations, charging per minute, charging per session, and the sale of items.
Some psychics have even found such success that they are able to get customers to subscribe to their services.
How much can you charge customers?
The basic fees start at $25 per hour and go up to thousands of dollars per hour.
How much profit can a psychic business make?
This is limited by the about of billable time and the revenues from items for sale. A really successful psychic can make millions of dollars if they market themselves effectively to the masses and sell books and/or self-help programs.
How can you make your business more profitable?
Offering free services may be an effective way to bring in customers, but it may be the case that customers who are seeking free psychic readings are not your intended market. Many gifted psychics have led workshops or other training programs to pass on their knowledge of the supernatural to others. Producing DVD videos for sale and/or writing books and publishing them is potentially a source of additional income.
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.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your psychic 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 psychic business. 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.
In addition, certain local licensing or regulatory requirements may apply. 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.
Certificate of Occupancy
A psychic business is often run out of a physical location like a storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a psychic business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your psychic business will be in compliance and able to obtain a CO.
As psychic businesses are more difficult to regulate (due to their claim of supernatural ability), laws regarding them are highly variable. Attached is a resource which discusses some of the laws associated with this type of business. It is advisable to look further into the specific laws governing psychics in your jurisdiction.
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 psychic business
Psychics with great predictive accuracy do not need to do much to market themselves. They are so rare that they will soon be overwhelmed with clients seeking their advice. Less accurate psychic businesses need to advertise themselves like any other business and focus on the advertisements that may attract those curious about having a psychic reading. It is good to include a disclaimer in any form of advertisement that says the psychic services are for entertainment purposes only. This helps avoid legal issues.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Accurate psychics do not need to make any effort to do this. It happens automatically. Less accurate psychics need to learn a lot about human psychology and always leave the existing clients with a “cliffhanger” at the end of a reading that hints about more important future revelations that are coming during the next visit.
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 Psychic Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
To be a psychic you should really have a genuine interest in and understanding of the supernatural. Many people in the business put on a show for their clients, but true psychics have a powerful intuition that allows them to serve others in a variety of situations. A person who is able to empathize with others, listen to them describe their problems, and then offer advice that is relevant to the circumstances and the situation will succeed in this business. As the nature of the services is very personal, customers need to trust the psychic who is offering these services. And, likewise, a professional psychic should also be trustworthy, always careful not to exaggerate their abilities.
What happens during a typical day at a psychic business?
If you work out of your home, you simply wait for people to come to you. If you have a public store or office, you need to make sure it is clean and comfortable for your clients. You may spend some time organizing marketing efforts.
If you work on the telephone you need to log on to the system, when you are ready to take calls.
Once you’re sitting across from clients (or on the other end of the telephone line), you will need to demonstrate excellent listening skills and make predictions/give advice relevant to the client’s situation.
What are some skills and experiences that will help you build a successful psychic business?
The main skills are having extraordinary intuition and the ability to listen to people, make them feel comfortable, and give them emotional support if they are going through trying times. It is not necessary to have a previous clairvoyant ability. There are schools which claim to develop psychic abilities.
What is the growth potential for a psychic business?
This business starts out small and has a limit on the earning potential based on the number of hours available for doing the psychic work. As the reputation of a psychic increases it is possible to create television programs and websites that promote the materials offered by the psychic and book private “readings” for extraordinary prices.
The most famous psychics charge $250 up to $2,000 per hour for private readings and have wait-lists that have clients lined up for many years. These clients are willing to pay exorbitant fees for psychics that are publicly perceived as being the “real deal.” However, not all professed psychics are actually gifted mystics. Some of the greatest psychics alive right now shun public admiration and attention. The people that find them have to actively hunt for them.
TRUiC's YouTube Channel
For fun informative videos about starting a busines visit the TRUiC YouTube Channel or subscribe below to view later.
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.
What are some insider tips for jump starting a psychic business?
One of the most significant ways to create a following and extreme public awareness is to make future predictions that have an amazing level of accuracy. Nobody gets everything 100% correct; however, if you get some of the major events correct your reputation as a psychic will soar.
A retail type psychic business has the problem of building credibility. Putting up a sign in the front yard of your approved home office that says “psychic,” is just as likely to create ridicule as to create customers. Using the pay-per-minute systems for telephone readings is just as problematic. However, these methods do create customers.
Psychics may face some sort of liability as a result of advice given during readings. As such, it is essential to require customers to sign some form of paperwork and/or to post some form of disclaimer in order to decrease liability in the case of any injury or harm resulting from customers following the psychic's advice.
How and when to build a team
The psychic business is not really about building a team unless you want to run a phone bank of psychics that get paid by working on telephone calls for a per-minute charge. If you are running a phone bank you will constantly be looking for persons who have a wonderful sounding phone voice and who have the skills to keep the callers on the line.