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How To Start Your Own Event Planning Company

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The events industry has grown immensely over the past ten years. As stated by a recent research study conducted by Dr. Joe Goldblatt, CSEP (Certified Special Events Professional), expenditure for events worldwide is $500 billion per year. Goldblatt who is not only the founder of International Special Events Society (ISES), but also the founding director of the Event Management Program at George Washington University, and the co-author of The International Dictionary of Event Management stated: "Suffice it to say, the marketplace is large enough to support and sustain your endeavor.” "If you're working in one special events area, there are many directions in which you can expand. If you're just entering the profession of special events, there's a lucrative market awaiting you on many fronts." So how does one become a part of this $500 billion dollar business? Let’s find out.

 

What Defines Event Planning?

The question actually splits into two parts: What types of events are we talking about? And, what is event planning?

Commonly speaking, special events happen for the following reasons:

  • Celebrations (fairs, parades, weddings, reunions, birthdays, anniversaries)
  • Education (conferences, meetings, graduations)
  • Promotions (product launches, political rallies, fashion shows)
  • Commemorations (memorials, civic events)

This list isn't a thorough one, but as the examples illustrate, events may be business related, only social or somewhere in between.

The second question: What is event planning? Event planners may handle any of the following responsibilities connected to an event:

  • Conducting research
  • Creating an event design
  • Finding a site
  • Arranging for food, decor and entertainment
  • Planning transportation to and from the event
  • Sending invitations to attendees
  • Arranging any necessary accommodations for attendees
  • Coordinating the activities of event personnel
  • Supervising at the site
  • Conducting evaluations of the event

The amount of the listed actions your business participates in will be dependent on the size and kind of event, which will, in turn, be contingent on the concentration you choose.

Why Do Event Planners Get Hired?

This question has a simple answer: Individuals often find they don’t have the expertise and time to plan events themselves. A professional event planner can step in and give these special events the attention they deserve.

Who Is An Event Planner?

Planners are often individuals who got their start in one particular aspect of special events. For example, a business owner who has a successful catering company before he/she decides to plan events in their entirety. This is why event planners frequently not only organize entire events but may, in addition, provide one or more services for those events. Also, some event planners may have started out managing events for other companies before deciding to go into business for themselves.

Becoming Certified

Consider getting a certificate or degree from a local university in event management or planning. A list of universities and colleges that offer educational opportunities in this field is available from Meeting Professionals International (MPI). 

You can also become a CSEP (Certified Special Events Professional) or CMP (Certified Meeting Planner). These titles are given out by ISES and MPI. Many companies, and some members of the overall public look for these titles when hiring an event planner. Due to the research and study it takes to become a CSEP or CMP, clients know that these planners are professionals.

 

Target Market

Corporate Market

Generally speaking, there are two markets in the event planning industry: corporate and social. The word "corporate" includes companies, charities, and nonprofit organizations. Charities and nonprofit organizations host fundraisers, parties and athletic competitions, and other events, to increase their public support base and also to raise funds. Thousands of these types of events occur each year, and although the larger ones require specific event planning capability, you may find smaller local events that you can start out with.

Companies host meetings, trade shows, conventions, company picnics, and holiday parties for staff members, stockholders, or board members. There is an enormous market for these sorts of events. As stated by the Convention Industry Council’s 2012 Economic Significance Study, 1.83 million corporate meetings, trade shows, conventions, etc. took place in the U.S. alone.

 

Social Market

The social events market can include anniversary parties, children's parties, weddings, bar and bat mitzvahs, birthdays, Sweet 16 parties, reunions and more. You might decide to handle all of these event types or just dedicate yourself to one or more of them.

The market for social events, particularly birthdays and anniversaries, is expected to continue to increase over the years, as the baby boomers mature. This crowd has children who are getting married, parents who are celebrating golden anniversaries, and their own silver wedding anniversaries to celebrate.

Startup Costs

How much money will you need to start your event planning business? That will depend on the cost of living in the area your business serves and whether you work from home or rent office space. Event planning in New York City will cost more than events in the central US. It will also depend, to a lesser degree, on your own taste and lifestyle choices.

Keep in mind that while working from home will keep your costs low, you can't start any but the smallest of event planning business on a shoestring.

This chart lists the startup costs for two hypothetical event-planning services. The first business is home-based and has no employees. The high-end business occupies 1,000 square feet of office space. The owner/manager of this business employs a full-time junior planner and a part-time bookkeeper, as well as temporary employees who handle clerical work and who may help prepare for various events. Both owners will derive their income from pretax net profit. Annually, these businesses will gross $85,000 and $250,000, respectively. The startup table lists pre-opening costs for the companies.

Startup Expenses

Low

High

Rent

$0

$2,300

Equipment

$5,000

$17,000

Inventory

$0

$500

Licenses and Taxes

$250

$350

Communications

$100

$250

Payroll

$0

$4,000

Advertising/Promotion

$500

$2,000

Legal Fees & Accounting

$650

$1,500

Insurance (1st Quarter)

$800

$1,700

Miscellaneous

$750

$1,500

Total

$8,050

$31,100

 

Operations

Few, if any, event planners have 9-to-5 jobs. By its very nature, event planning tends to involve evenings, weekends, holidays and sometimes even specific seasons. How much time you must commit to working will depend, once again, on the specialization you choose.

As a general rule, social events involve more weekends and holidays than corporate events do. Some areas of the country and some types of events have "on" and "off" seasons. However, no matter what your specialization (with the exception of parties for young children), you can count on working at least some evenings as you coordinate and supervise events. The planning of those events, however, will be done mostly during business hours.

Here are the primary responsibilities you'll be implementing as an event planner:

  • Research. The best way to reduce risk (whatever the kind) is to do your homework. For large events, research may mean making sure there's a demand for the event by conducting surveys, interviews or focus group research. If you're new to the event planning industry, research may instead mean finding out all you can about vendors and suppliers. Research also may involve talking to other planners who have produced events similar to the one on which you're working. Or you may find yourself reading up on issues of custom and etiquette, especially if you're unfamiliar with a particular type of event.  

Whatever type of event you're planning, research should include asking your client a lot of questions and writing down the answers. Interviewing a client may not be what you immediately think of as research. However, asking too few questions, or not listening adequately to a client's answers, can compromise the success of the event you plan.

  • Design. Your creativity comes most into play in the design phase of event planning, during which you sketch out the overall "feel" and "look" of the event. This is the time to brainstorm, either by yourself or with your employees. It's also the time to pull out and look through your idea file. (You do have one, don't you? If not, read on and take notes.) Don't forget to consult your notebook for the client's answers to the questions you asked in the research phase. These responses, especially the one regarding the event budget, will help you thoroughly check each idea for feasibility, preferably before suggesting it to the client.
  • Proposal. Once you've interviewed the client and done some preliminary brainstorming, you should have enough information to prepare a proposal. Be aware that the production of a proposal is time-consuming and potentially expensive, especially if you include photographs or sketches. Note that only the larger companies producing high-end events can afford to provide clients with free proposals. You should receive a consultation fee (she suggests about $150), which can be applied toward a client's event if he or she hires you.
  • Organization. During this decision-intensive phase, you'll rent the site, hire vendors and take care of more details than you might believe possible. You'll be on the phone until your ear is numb. But before you do any of this, make sure you have a contact person (either the client or someone acting on the client's behalf) with whom you'll discuss all the main decisions. Having a designated individual helps ensure that communication lines are kept open. Also, social events in particular sometimes suffer from the "too many cooks" syndrome. Having one designated contact helps you avoid being caught in the middle of disagreements between event participants.

Commonly speaking, the bigger the event, the more lead time that's required to plan it. Major conventions are planned years in advance. Although you may not be arranging events on such a grand scale, you do need to allow at least a few months for events like corporate picnics, reunions or large parties.

  • Coordination. After you've made the initial plans, turn your attention to each of the activities that form a part of the overall event. At this point, your goal is to ensure that everyone is on the same wavelength. Good communication skills are essential. Make sure all vendors have at least a general idea of the overall event schedule. Even more important, vendors should be clear about what's expected of them, and when. Vendor arrival times should appear in the contracts but verify those times anyway. This is a "check and recheck" period. Make sure all your staff members know their roles.
  • Evaluation. The obvious, and in one sense the most important, test of an event's success is customer satisfaction. The goal, of course, is to end up with a client who will sing your praises up and down the street, shouting it from rooftops. This is the client who will hire you again, and who will provide that famous word-of-mouth advertising for you.

There are more than a few ways to evaluate the success of an event. You can hire an event planning consultant; have someone who hosts extremely successful parties observe your event; plan a roundtable post-event discussion with your employees; obtain feedback from other industry professionals working at the event, like the caterer or bartender; or survey guests at or after the event.

 

Income & Billing

The goal in pricing a service is to mark up your labor and material costs sufficiently to cover overhead expenses and generate an acceptable profit. First-time business owners often fail because they unknowingly priced their services too low. According to industry experts, fees are usually determined by three aspects:

  • The market segment served. Social events have a different fee structure than corporate events. In the social events industry, planners typically receive a fee for their services, plus a percentage of some or all vendor fees. The two income streams produce enough revenue for a profit. In the corporate events industry, however, planners typically charge a fee for their services, plus a handling charge for each item they contract. For example, a planner buys flowers from a florist, marks them up (usually 15 percent) and charges that amount to the client. Another possibility is a flat fee, or "project fee," often used when the event is large, and the corporation wants to be given a "not to exceed" figure.
  • Geographic location. Fees are higher in the northeast United States. This difference reflects the variation in cost of living. In addition, areas of the country that have well-defined on- and off-seasons base their prices partly on which season they're in.
  • Experience and reputation of the event planner. If you're just starting out in the industry, it's reasonable to charge less for your planning services while you gain expertise.

How, you may ask, are the above-mentioned fees-for-service calculated? Event planners we interviewed price their fees-for-service (the total cost to the client) using a "cost-plus" method. They contract out the labor, supplies and materials involved in producing an event and charge their clients a service fee of about 10 to 20 percent of the total cost of the event, with 15 percent being a rough average.

 

Marketing and Resources

Print advertising covers a broad range, from a free—or inexpensive—Yellow Pages advertisement to an ad in a glossy national publication costing tens of thousands of dollars. Even today in the online era, most planners agree that an ad in the Yellow Pages makes good business sense. A line advertisement, simply listing your business name, is often provided free of charge when you connect your phone (if you have a land line). 

You can also opt for a display advertisement. These are the bigger, bordered ads in the Yellow Pages. There is a charge for these. If you do choose a larger ad space, be sure to include your logo. You may also want to consider advertising in your local newspaper. Many papers periodically (perhaps quarterly) publish special sections for brides- and grooms-to-be. These are excellent vehicles for promoting your event planning business if you plan to do any wedding consulting.

Networking can help your business in two ways. If people have met you and know what services you offer, they may refer business to you or use your service themselves. Furthermore, networking with hotels, caterers and so on will give you a chance to meet some of the people whose services you may need as you plan events.

Although networking and word-of-mouth are the most common industry strategies for acquiring clients, traditional forms of advertising do have their uses. A distinctive card or brochure sent to a mailing list or to local businesses may attract new clients. A small ad in a local business magazine can help build name recognition. A website on the internet may allow you to attract customers unresponsive to other forms of media.

 

Resources

Associations

  • Convention Industry Council
  • International Special Events Society
  • Meeting Professionals International
  • National Association of Catering Executives
  • Professional Convention Management Association

Magazines and Publications

  • Corporate Meetings and Incentives
  • The Meeting Professional
  • Special Events Magazine
  • Meetings and Conventions
  • Successful Meetings
  • Trade Show Executive Magazine
  • Travel Weekly

Books

Educational Opportunities

 

 

Conclusion

 

If you could come close to mastering the different components covered in this article, you’ll go a long way toward building a successful foundation for your event planning business.

 

 

 

 

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