After coming up with the idea, the next step in starting your personal shopping services should be to write a business plan. You might think a plan is not that important because starting as a personal shopper doesn’t require a large sum of capital upfront. But the business plan will make you focus on some important aspects of your business, such as who your customers are, how you plan to reach them, projecting income and expenses, and much more. Multiple studies have shown that a business plan helps increase the odds of starting a successful business and sustain it longer-term.

Related: How to write a business plan

Finding the perfect name for your personal shopping services business can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.

Most states require that if operating under a business name that is different from your own name, a Doing Business As (DBA) or Assumed Name registration will be needed.

Related: How to do a Trademark Search Before Choosing a Business Name

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

When deciding on which business entity is best for a personal shopping business, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: Guide to forming your LLC
 

If you are starting on your own, the location is perhaps not the most important consideration. A personal shopping services business can be run from home as it is less dependent on a brick-and-mortar office space for customers to visit. Even if you decide to employ staff to offer a broader range of services, it doesn’t mean you automatically have to rent a big office or warehouse. A personal shopping services business should work well for remote, distributed teams.

You should, however, consider your location in terms of accessibility to shops, suppliers, and clients. If you are living in a remote area, each errand you run will add considerable travel time.

Related: Choosing a business location

You won’t need a specific qualification to offer personal shopping services, but as a business owner, it’s important to identify the necessary permits and licenses before starting your business. These permits and licenses can vary based on the state and town where the business is located. Some common local, state, and federal registrations a private music lesson business may need include a sales tax permit and Employer Identification Number.

Related: Common business licenses, permits, and registrations by state

Coming up with a good business idea and having the skills to run it are one thing but getting the funding to start your own business is another. Luckily, a personal shopping services business does typically not require a large amount of capital upfront and can start small scale. However, should you need a loan, it is important to understand that the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.

Related: Finding the money to start a business

Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
 
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.

Marketing and communication should be big-ticket items on your budget. That includes branding, business cards, online advertising, your online presence both in social media platforms like Facebook, Pinterest, and Instagram, along with your business website. Make the most of tools such as Google My Business to achieve maximum local visibility.

Mix and mingle whenever you can. Consider radio advertising and a presence at expos and large corporate events. Creating a customer loyalty program can help to encourage new and repeat clients.

Marketing and branding costs will depend on the design, the activity performed, and its volume.

Related: Low-cost ideas to market a new business

There are several types of insurance to consider when starting a personal shopping business. A few of these include:
– General liability insurance protects the business from expenses like medical and legal bills that it could face if a customer is ever hurt while on the business’ property. It will also protect you from being liable for accidentally causing damage to a client’s property or you getting hurt.
– Professional liability insurance helps cover any damages owed if your professional services or advice result in a financial loss for your clients.
– Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

The cost to insure a personal shopping business will vary in cost depending on factors like the business’s location, the value of its inventory (if any), and the number of employees on staff (if any). To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: Common types of insurance a business may need

Personal shopping services can easily be run as an owner-operated home-based business. But should you want to hire staff to expand the range of personal shopping services you can offer, the average pay for a personal shopper is $14.78, according to PayScale.

In addition to salary costs, your budget will need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff. It will also be useful to set aside some time and budget for professional development.

Related: Hiring your first employee

Setting up an accounting system for your business is critical to its long-term success. A good system will allow you to stay on top of your billing and will track income and expenses. It will help you maximize profits, identify trends, and keep the business out of trouble with the government.

Related: Setting up the accounting for your business