How to start an event planning business in 8 steps
In 2020, the COVID-19 crisis changed everything for event planners. Whether the industry thinks of 2020 as a deviation or devastation strongly depends on how planning professionals adapt to uncertainty. One thing's for sure, virtual and hybrid meetings are here to stay, with the virtual market at $94 billion in 2020 and an expected compound annual growth rate of 23.7% between now and 2028.
With all the change in the air, enterprising event entrepreneurs build social connections no matter the distance. So read on to avoid being amongst the 50% of all small businesses that fail in the first 5 years—and, more importantly, to give your new event planning venture the right start.
1) Evaluate your event planning skillset
It's common for event planning newbies to believe the business is all about showmanship, champagne, and shindigs. While that's the final product of your meticulous preparation, things behind the scenes are much less spectacular. There are a hundred to-dos that the planning professional must check off for every event to guarantee an enjoyable time for the client and guests.
Amongst other tasks, you may have to:
- Create an event theme or design.
- Find a venue.
- Arrange entertainment.
- Book vendors.
- Send RSVPs and marketing info to attendees.
- Balance the budget.
- Coordinate with staff and subcontractors.
- Decorate the space.
- Oversee the caterers and bar staff.
- Supervise the event.
If you want to start an event planning company, it might be smart to test out a job or three before making the dive. To begin, think about signing up as a personal assistant or apprentice for an experienced party planner. That way, you can evaluate whether the work is a suitable match before venturing out on your own.
Or you can look below for traits you already possess or ones you're willing to pick up as you go.
- Attention to detail. Planning events requires diligence with finances, logistics, and time management.
- Customer service. Event planners must contact their clients often. Thus, excellent customer service may help build the planner's reputation and improve client satisfaction.
- Education or experience. Knowledge of best practices and prior event planning experience help. A party planner may have also attended college or earned a certification.
- Interpersonal relationship skills. During a single event, an event planner will need to engage various people, many of whom will not be the planner's staff. Therefore, it's critical to form solid interpersonal connections and work effectively with a wide range of personalities. An event planner is the ultimate "people person."
- Negotiation. Event planners negotiate with suppliers, entertainers, and contractors to reduce expenses while ensuring the client receives what they want.
- Organization. Every event has many moving components that planning professionals must manage, and good organization is essential throughout the process to guarantee that nothing is missed or neglected.
- Under-pressure performance. Even with the finest preparation, unforeseen problems will arise during an event. Event planners must create solutions to issues fast and always think on their festive feet.
Create your event planning business plan
"Whatever you do, do it well. Do it so well that when people see you do it, they will want to come back and see you do it again, and they will want to bring others and show them how well you do what you do."
Those words are from the man who has created more magical experiences than anyone else. Walt Disney's quote sounds like inviting people to your party, and his wisdom is perfect for those who make a living by bringing folks together. But before you can show the world how well you do what you do, consider the following questions when starting your business:
- Executive Summary: How would you describe the business and your potential success?
- Overview: What's the business's background, legal structure, and other key attributes?
- Industry Analysis: What does market research reveal about the event planning industry in your area, including size, opportunity, and current trends?
- Competitive Analysis: Who are your competitors, and what are their strengths and weaknesses?
- Marketing: What is your marketing strategy to reach potential customers?
- Management: What unique skills do you bring to the business?
- Operations Plan: How will you manage the day-to-day tasks of the business?
- Financials: What are your estimated revenues, expenses, and profits for each of your first 5 years?
2) Find your event planning niche
Finding a niche is as simple as picking a subset of the broader event planning industry to concentrate on or specialize in. A niche allows you to shine in an overcrowded marketplace and helps your target market track you down. Saying yes to the wrong client is saying no to Mr. or Mrs. Right. So, find the niche that matches your expertise and focus.
Take a look below for common niches and types of events.
- Award ceremonies
- Charity and non-profit events (such as fundraising events)
- Corporate bonding retreats
- Corporate meetings and seminars
- Fashion shows
- Golf events
- Grand Openings
- Experiential events (such as pop-ups and product or service launches)
- Holiday parties
- Networking events
- Trade shows
- VIP events
- Baby showers
- Bachelor/bachelorette parties
- Bridal/wedding showers
- Holiday parties
- Milestone birthday parties
- Murder-mystery parties
- Theme parties
- Surprise parties
- Wedding planning
3) Uncover your event planning unique selling proposition (USP)
Your unique selling proposition expresses what distinguishes you from every other event planner. According to top business thought leaders, in a world where clients are drowning in options and competition is fierce, 90% of a small pie is preferable to 10% of a large pie. So, for example, an enterprising event planner might create the USP, "Grand Opening Specialist for Luxury Retailers."
4) Pick your event planning business name
Are you ready for some fun? Business ideas move to the realm of reality as soon as a company has a name. Pick a name that blends your niche, USP, and expertise as an event planner. Perhaps it's as simple as Grand Openings Event Planning Company or as whimsical as Lux Influx Events. Try a business name generator, research competitors, or brainstorm with friends and family.
5) Figure out your financial plan
According to event planning tech company EventForte, profit margins in the industry can go as high as a healthy 40%. But don't rush off to the bank quite yet. To earn top dollar, you have to get those financial duckies in a row. So, if numbers are not your cup of event planning tea, you can always rely on a bookkeeper, software, or your favorite accountant. Then, when you're ready, you need to crunch your upfront costs and set up your pricing.
Calculate your startup costs
If you're starting as a side hustle, you'll need little more than a home office, computer, phone, website, some marketing materials, and event management software. It's common for people to get started for less than four or five thousand bucks. Furthermore, Entrepreneur.com estimates between $8,000 and $31,000, with the lower end for home-based business and the more expensive side for the type of business that launches with an office space and a few employees.
Structure your pricing strategy
How should you charge for your planning services? Your location, expertise, niche, and competition will help you set your fees. Below you'll find the five most prevalent ways of pricing event planning.
- Hourly rate. A typical hourly fee for a novice event planner may be as low as $25 per hour and over $100 per hour for top event planners. Usually, a corporate event generates approximately 30% higher rates than social events.
- Flat fee. A flat fee makes it straightforward for you and the client and is probably the most common arrangement. It is customary to charge a price for your services and a percentage of total vendor fees. A typical vendor commission runs from 10 to 15%. For instance, if a caterer's fee is $4,000 for an event, your cut for finding and arranging that specific vendor would be $400-$600.
- Percentage of the event. Some event planners choose to charge a portion of the entire event budget, such as 15 to 20%.
- Day-of coordination. At some point, a client will ask you for day-of coordination. This fee structure is most common for wedding planners, but it may also occur at other types of events.
- Vendor commission. A small percentage of planners opt to either drastically reduce their fees or charge nothing for their services, earning all their money via commissions from the vendors they choose.
6) Get your paperwork in order
It's just a few hurdles to jump, and you're racing toward the finish line.
a) Register your business name with the state
Before you find your first clients, you need to register your business entity with state and local authorities. Also, you'll need to pick a type of business structure such as sole proprietorship, limited liability company (LLC), or corporation.
b) Apply for your EIN
Your employer identification number (EIN) identifies your business for taxes. Surprisingly, getting one is both free and easy. Get your EIN here.
c) Open a business bank account
Once you have your EIN, you can open a business checking account, apply for a loan, and separate your personal and business finances.
d) Obtain permits and licenses
This step separates the planners from the pretenders, but it's well worth the hustle to protect your reputation and potential clients. Your state will likely require several permits and licenses for your business and events. Standard ones include:
- Building permit (tents). You need one for carnivals, political demonstrations, pop-up performing arts, races, and many other outdoor events that require tents.
- Business license. Almost all businesses require licensing with the state to operate.
- Event permit. The requirements vary by city, so contact the local government for relevant ordinances.
- Fire/fireworks permit. You must check with your county if it's legal to display fireworks for your event.
- Health permit. You can get this from your county's health department.
- Liquor license, if applicable. You'll have to get this if you're planning to serve alcoholic beverages, and you can check the Alcoholic Beverage Control board for your state's specifics.
- Noise permit. If your event's outside, you'll likely need one.
- Seller's permit. You may need this as an event planner.
- Temporary use/structure permit. There are two kinds of temporary use permits. One is for vacant land, and the other is for temporary space for parking, vendors, and loading areas.
e) Insure your event planning business
Some first-time event planners forget about insurance until it's too late. When you're dealing with the public, there's always the potential for the unexpected. Every event planner needs solid small business insurance—that's why it's essential to shop around to lock in the best deal. Check out this overview of important coverages you may need to insure your event planning business:
- Workers' compensation: This coverage protects your employees if they get sick or injured while working in your event planning business. Every state requires workers' comp, and the consequences of skipping this coverage could cause the state to close your business. (You can get a quick estimate on what you'd pay for workers' comp with our 60-second workers' compensation calculator.)
- General liability insurance: This policy protects your event planning business if you're sued for a property damage or injury claim. (Expensive lawsuits can quickly put an event planning service out of business.)
- Property insurance: This policy protects your event planning equipment, such as your laptop or other devices you use in your business or home office from perils like fire or theft.
- Business interruption: This coverage, also called business income insurance, provides financial support to your event planning business if you must close because of a covered reason.
- Business Owner's Policy: This policy bundles general liability, business property, and business interruption insurance for your event planning business in one convenient package.
7) Hire your first employees
Many event planners launch as solopreneurs, but they soon look for a personal assistant. Or perhaps you want to hire a junior planner, salesperson, or office manager. Of course, you'll need workers' compensation insurance to operate legally whenever you add that first team member. After finishing your paperwork and legal requirements, head over to the Small Business Administration for a helpful checklist.
8) Spread the word about your new event planning business
Event planners are marketers at heart. After all, who's better at promotion than party planners? Now, you can parlay some of that creativity to advertise your new business. When building your marketing strategy to attract new clients, you could:
- Build a website. Get the domain name for your business. A service with templates like Weebly or Squarespace can make this easy.
- List your local business on Google and Yelp. Sign up for your Google My Business and Yelp profile.
- Launch your social media profiles. Get your unique Facebook, Twitter, LinkedIn, Instagram, Pinterest, and other handles relevant to your niche.
- Distribute brochures, flyers, and business cards. Call it old-fashioned, but it still works, and you might get your foot in the door with new clients.
- Create word-of-mouth. Small Business owners know there's nothing better than word-of-mouth advertising, and the best way to get it is to please clients with a service they can rave about. Ask happy clients and customers for video testimonials that you can post on your website and social media accounts.
- Partner with related businesses. Businesses such as caterers, florists, and photographers can be excellent referral sources.
Bonus: Check out these tips for running a successful event planning business
You're just about ready to start your own event planning business, so it's time to break out the bubbly. But before you pop the top, perhaps you're still thirsty for more best practices. Here are a few places with knowledge you can sip on:
- Event Manager Blog: A great online library of articles, webinars, and videos covering every facet of the event planning industry.
- Meeting Professional International (MPI): "Meeting Professionals International is the largest meeting and event industry association worldwide. The organization provides innovative and relevant education, networking opportunities, and business exchanges, and acts as a prominent voice for the promotion and growth of the industry."
- #EventIcons Podcast: The hosts interview event-industry luminaries and up-and-comers, and the topics span from the everyday to the unexpected. The show has a friendly atmosphere and is a wealth of information for both beginners and seasoned experts. If you want to watch, #EventIcons is also accessible in recorded video format.
This article's been a lot to absorb. Maybe you're pondering just how to stay sane as an event planning entrepreneur.
If you're still crazy enough to start a party planning business, you can get insurance with Huckleberry in about the same time it takes to make your favorite caterer's samples disappear. (Getting a quote is free, easy, and 100% online.)