How to Start a Personal Shopper Service

Start a personal shopper service by following these 10 steps:

1. Plan your Personal Shopper Service
2. Form your Personal Shopper Service into a Legal Entity
3. Register your Personal Shopper Service for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Personal Shopper Service
6. Get the Necessary Permits & Licenses for your Personal Shopper Service
7. Get Personal Shopper Service Insurance
8. Define your Personal Shopper Service Brand
9. Create your Personal Shopper Service Website
10. 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.

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.

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!

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.

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.

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.

Services Contract

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.

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.