Being in the business in event planning can come with its share of important decisions. After you pick out a name for your event company, one of the key decisions that you would need to make for your business is how to charge for your planning services. There are many ways to look at charging for the services that your business provides. Let’s take a look at some of the common items to consider when before you decide how you’ll charge for event planning services.
Explore the Factors to Consider to Set the Right Event Planning Business Prices
1. Understand your event planning business
Understanding your business is the first thing you need to know in order to understand how much to charge for your services. You have to consider the type of clientele you have, and the type of clients you would like to have. Is your focus wedding planning, or would you rather focus on corporate events? These distinctions will help you understand your client make-up and give you clues as to what or how much to charge for your services.
2. Track the time you spend planning events
Make sure to track all of your time spent on the full process when planning an event. Don’t forget the people who are also working for you. It is important that they track their time as well. Tracking time will help you to find out how much of your time you are investing, and help you allocate a dollar amount for your services.
3. Know your event expenses and investments inside and out
Make sure that you are tracking your expenses and investments in regards to your business. This can be everything from maintenance equipment to expenses for your event. When you have a good perspective on how much it takes to run your business on a daily, monthly, and annual basis, it can help to provide that base amount for charging for services.
4. Evaluate your event business profit levels
Usually, if you are a business owner or a solo entrepreneur you want to make sure you are receiving some type of profit for the events that you do. Calculate the percentage of profit that will be comfortable for you and your clients to adhere to. Evaluate your profit margins every year to offset the changes in the cost of living and expenses.
5. Use this basic formula to figure out your event planning cost
Yes, high school was over with a while ago for me, however, there is a basic formula that you should always keep in your back pocket. The formula is for calculating profit:
Sales – Cost of Goods Sold = Gross Profit
(Selling Price – Cost to Produce) / Cost to Produce = Markup Percentage
This percentage along with others here at Entrepreneur.com will help you with making some of the base calculations for your business.
6. Factor in the most common ways of charging for events
Many event planners get caught up on how to charge for their business. Below are three common ways that event planning agencies charge for their services. Keeping in mind that some of these are used in combination and are based on what is best for that particular business.
- Per person
- Per hour
- Flat fee
- A la carte
7. Clearly communicate your event services charges
After you figure out your formula and how you will be charging for your event. Make sure to have those prices available for internal use. You might even want to consider having prices also available for external use too. Many businesses do not distribute pricing and evaluate each case separately, and provide a catered proposal their client based on each unique event. Whatever the case may be, make sure to communicate pricing in a clear and concise manner. If you find you will have to place your pricing within a contract, make sure everything is laid out even the fine print associated with any line item if applicable.
Now you’re ready to set the right price for your event planning business!
Charging for event planning services isn’t a cut and dry formula. Each business has to consider their audience, their time, and their investments to make sure that the cost back to the customer if fair for you and for them.
Do you have other ways that you charge for your event planning services that we should consider? Would love to hear from you on Twitter!