How Much Does It Cost to Run an Event Planning Company?
April 12, 2022 | Last Updated on: December 1, 2022
April 12, 2022 | Last Updated on: December 1, 2022
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If you enjoy planning parties and organizing high-end functions, you may be able to turn your passion into income by starting an event planning business. What does it take to get started? On the one hand, not much! You can start by helping a friend plan a wedding and scale from there. On the other hand, you may want to jump right in and go big right from the start.
We’ve created this guide to help you learn more about event planning as a business so you can decide if it’s the right move for you. Let’s get started!
Event planning businesses manage projects like meetings, shows, parties, and conventions. Event planners are contracted to organize and facilitate some, or all, of the aspects of an event, including budgeting, timing, equipment, reservations, permits, decorating, transportation, entertainment, and more. Event planning companies also create detailed contingency plans for each event. Skills required to succeed in the event planning industry include communication, organization, strategic risk management, and attention to detail.
Individuals and organizations work with event management companies to coordinate events for several different reasons. Using a third-party company to facilitate an event can be the most cost-efficient and time-efficient way to throw a successful event. Event planners can be contracted for events of all different sizes and budgets.
Wedding planners are among the most widely utilized event planners. Wedding planning with an event company can help streamline decision-making about things like venues, flowers, budgeting, food, and other details. Many individuals choose to hire an event planner to efficiently manage time while leveraging the planner’s expertise and networking ability within the industry.
Birthday event planners can cover anything from a low-budget kids’ party to an expensive extravaganza for an affluent celebrity or businessperson. Party planning for a birthday includes finding entertainment, planning a theme, creating a guest list, managing vendors, and more. Having an event planner organize and facilitate a birthday party allows friends, family, and other invitees to enjoy their event stress-free.
Event planning businesses help facilitate college and high school graduations, professional program completions, and even elementary school milestones. Event planners in this space may get leads by working with schools and universities and networking throughout the year to prepare for graduation season in the spring.
Nonprofit organizations generate revenue in several different ways, including through online donations, grants, and special events. When nonprofits host fundraising events, the objective is to generate as much revenue as possible. Using an event planning service helps maximize the earning potential of the event while making sure that all bases are covered. This is especially important for events targeting high net worth individuals
Launching a new product, whether as an entrepreneur starting a company or as an established brand, often requires high-end events. Party planners can ensure a successful event that provides a high-quality experience that makes a global impression.
Ultimately, event planning companies can be hired to help with any type of special event, including corporate events, team-building activities, anniversaries, holiday parties, fashion shows, concerts, social events, political rallies, sporting events, and more.
There are several ways event planners can make money, and before you open an event planning company, it’s best to explore your options in order to understand what profit margins you need to thrive. Typical payment models include:
As with any new business, the startup costs required to start an event planning company can vary. Factors that affect the range of initial investment include business goals, target market, and location. Business decisions that can affect startup costs may include whether you are working remotely or renting office space, operating independently, or hiring staff, and the amount of promotional material required.
Typically, however, starting your own event planning business should be achievable with an initial investment of less than $25,000, depending on the business decisions you make and the cost of permits and registrations. Startup costs should include:
Each of these expense categories is flexible, so startup costs will depend on your business plan and the available budget. Checking with local authorities about the average costs of licenses, taxes, and permits can help estimate costs. It is also recommended that new business owners shop around for the best rates for advertising material, office supplies, and insurance.
The decision to open an event planning company is exciting but requires a lot of planning. Event planners have a lot of freedom because they can choose what types of clients they work with and the kinds of events they’ll be facilitating. However, like with any business, you should start with creating a business plan, legally forming the entity, and then promoting it to your target audience.
After researching, brainstorming, creating a business name, and daydreaming, creating a strong business plan is the first step in developing a business idea. Business plans provide a documented outline of how to start and run a business. The business plan gives a detailed account of how you will run your event planning company, including the services offered and the customers you plan to work with. Your business plan sketches out how you will build and grow your business, market to your target customer, meet your forecasts, and compete in your industry.
You’ll need a business plan when starting an event planning organization for several reasons. According to research, young startup companies that have a solid business plan are 30% more likely to grow and succeed. Business plans are also required by many investors and lenders when discussing investment opportunities and financing. Many entrepreneurs write their own business plan using references like those provided by the Small Business Administration (SBA) or private companies and lenders that provide guidance on how to write a business plan.
You’ll need to form your business as a legal entity before getting clients. The following steps provide a guideline for startup businesses in the event planning industry.
Marketing at its core is putting the right message in front of the right people at the right time. You’ll need good marketing strategies to attract clients and grow your business. Event planners new to the industry can use the following methods to market their business:
For service-oriented businesses, building a strong reputation and securing future business all begins with word-of-mouth referrals. Every event worked is an opportunity to gain brand ambassadors by performing well for your client. In other words, do an excellent job for every customer and ask satisfied clients to leave reviews on websites and local directories!
The startup costs of an event planning business can seem overwhelming, but you’re not alone. Every small business owner feels the same way. There are three common methods used to finance event planning companies.
Starting an event planning company might seem complicated at first, but if you take the process step-by-step (just like you would any event), and you’re good at what you do, you’re likely to succeed. And if you have financing needs, Biz2Credit is a great place to get help. They’re an experienced lender that has helped numerous business owners in the industry, like Brian Lillie at The Party Staff.