How to Calculate Your True Cost Floor for Personal Errand & Concierge Services
Most personal errand runners and concierge service providers undercharge because they undercount. They forget to include critical expenses like gas, mileage, parking, their travel time, the cost of specialized apps, liability insurance, and the true time spent communicating with clients. This leads to rates that feel competitive but erode your earnings every month. Here is how to find the real number you need to charge to actually make a profit.
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The quick answer
Your cost floor is the lowest price at which taking on one more grocery run, delivery, or senior check-in makes financial sense. For personal errand and concierge services, it must include your direct costs (like fuel, parking, and specific task-related app fees), a share of your overhead (insurance, scheduling software), your time for driving, waiting, and completing the task at a fair hourly rate, and a buffer for self-employment taxes and future business tools.
Side-by-side breakdown
Simplified cost floor (what most personal errand operators calculate): Gas + parking + hourly rate for the exact time you spent shopping or performing the task. This often understates your real costs by 30-50% because it ignores critical elements.
True cost floor (what you actually need for sustainable pricing): Gas and mileage (using IRS rates or actual receipts) + parking/tolls + direct task-specific app fees (e.g., a specific delivery service fee) + *all* your time (driving, waiting, communicating, executing the task) at your target hourly rate + allocated overhead (your annual liability insurance, scheduling app like Calendly, website hosting, business phone plan divided by client count) + customer acquisition cost (what you spent on that local Facebook ad or referral fee) + payment processing fee (like Square or Stripe's percentage) + self-employment tax provision (25-30% of your net income) + reinvestment margin (10% to save for a new business vehicle or better software).
When simplified is enough
For a super quick estimate before agreeing to a one-off quick delivery or a last-minute favor, the simplified cost floor can work. If your proposed price is 3x or more above your simplified cost (e.g., gas + 30 minutes of your time), you likely have enough room. Use this simplified number to understand your absolute rock-bottom, not to set your final, profitable rates.
When to do the full calculation
Do the full calculation before you publish any pricing on your website, before you take on a recurring client at a fixed weekly or monthly rate (like a senior companion service), and annually as your business grows. When you add a new helper, invest in a dedicated delivery vehicle, or upgrade your scheduling software, your cost floor shifts. Your prices for errand running, personal shopping, and concierge packages may need to shift with it to stay profitable.
The verdict
Build a simple spreadsheet with at least three rows for personal errand and concierge services: direct costs (gas, parking, task-specific fees), allocated overhead (insurance, scheduling app, business phone), and *all* your time (driving, waiting, doing, communicating). Price your services at 3x your true cost floor. For example, if your true cost for a 2-hour personal shopping trip, including travel and admin, is $30, you should aim to charge $90. If the local market for errand services will not bear that price, your service offer might need to change (e.g., offer only local, quick tasks) before you adjust your price.
How to get started
Open a spreadsheet and list every cost you incurred in the last 30 days specific to your errand or concierge business. Think gas receipts, parking tickets, monthly scheduling app fee, business liability insurance (divide annual by 12), Square transaction fees, and your mobile phone bill (allocate a business portion). Divide fixed monthly costs by the number of clients or tasks you served that month. Then, for each client or task, add the *actual time* spent: driving to and from, waiting at the store, performing the task, and communicating (texts, calls, emails). Calculate this time at the hourly rate you would pay a trusted assistant. That bottom line is your true cost floor for that service. Does your current price for a standard grocery run or a 2-hour senior companion visit cover it with enough room for profit and taxes?
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FREQUENTLY ASKED QUESTIONS
Should I include my own salary in my cost floor?
Yes — at the rate you would pay someone competent to replace you. If you value your time at $0, your pricing will reflect that and so will your business decisions. Even if you are not paying yourself yet, include it to model sustainability.
What if my price floor is above what the market pays?
That is important information. It means either your costs are too high, your target market is wrong, or your offer is not differentiated enough to command the price you need. Solve the offer problem before cutting your prices.
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