Starting a new business is an exciting journey. Event planning is a challenging and rewarding field. Being an integral part of someone’s special occasion and seeing their joy is so gratifying. One of the great aspects of event planning is that you can start your business from home and gradually grow.
On the average it costs $15,000 to start an event planning business. Cost categories include: a business plan, legal paperwork and insurances, office setup and supplies, marketing, and operational elements.
Within each of these categories, there are a number of potential expenses. Depending on your target market, location, and scale of business, your costs can range from a few hundred dollars to thousands to start your business. Continue reading for information about event planning costs.
Business Plan
Your first step in determining the startup costs for your event planning company is to create a business plan. Determining the scope of your business will keep you focused. Though it might be tempting to accept any and all events initially, you need to establish your reputation and build your business. Eventually, you can broaden your scope as you are earning money that can be reinvested in your business.
Control your startup costs with a streamlined business plan. Elements to consider including in your written plan include –
- Name of your company
- Its logo, which should be symbolic of what your business includes
- Your background, which will lend to why this venture will be successful
- Mission statement, which clarifies your goals
- Vision statement – where do you see your company five years from now?
- Details on the type of work – i.e. corporate events, family at home parties, weddings, etc.
- Scope of work – will you plan the entire event, or will you use subcontractors?
- Market research – who are your competitors?
- Customer demographics – include estimated size of your potential customer base
- What will make you different from other event planners?
- Growth plan – will you gradually broaden the type of events or the scope of events?
To thoroughly contemplate all steps of your business plan, conducting research will be important. You do not want to start your business in a saturated market. Knowing your competitors, the markets they services, and what they excel at providing need to be honestly vetted.
The details of your business plan will help you estimate your startup costs as you explore other steps in establishing your event planning business. Once your business is up and running, evaluate your business plan on an annual basis.
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Legal Paperwork and Insurances
There are several ways that you can structure your business. These different legal formations determine the company’s ownership, liability issues, and how you are taxed. Each structure will impact your startup and ongoing costs. Listed here are the business structures for you to explore.
- Sole proprietorship – ownership by one person
- Partnership – ownership by two or more people
- Limited liability company or LLC – ownership by one or more people
- Corporation – C corp – ownership by one or more people
- Corporation – S corp – ownership by one or more people, but not more than 100
- Corporation – B corp – ownership by one or more people
- Corporation – nonprofit – ownership by one or more people
Each formation has their own pros and cons with costs that vary depending upon your location.
Not that you have formed your business, you need to insure your company and yourself. The types of insurance will differ. If you will be renting space, hiring employees, working from home, etc., these will determine the types and amount of insurance you need. At the minimum, you will need to procure general liability insurance. An insurance agent can assist you with the policies and their costs.
Your town and state might have permits and licenses that you need to obtain before you plan any events. Check with your local land use office on the requirements for your town. Permits will typically cost you money.
Office Setup and Supplies
Event planning requires organization, which means you need an office area. You can certainly work from home, especially in your startup phase; this can save you money. If you choose to work from home, you should establish space in your home that is just for your business. Working from an office will necessitate that you budget rent and utilities into your startup costs.
For either a home or outside of the home office location, you will need to consider purchasing the following supplies.
- Desk
- A dedicated laptop or computer
- Printer and scanner
- Reliable internet access – if you are working from home and sharing the internet, be sure you have sufficient bandwidth for all users.
- Paper, writing utensils, folders, stapler, sticky notes, cleaning supplies, etc.
- Phone – you may want one that is separate from your personal phone; you want to establish yourself as a professional.
- Camera – unless your phone can take quality pictures
- Software
You might already own some of the equipment that will let you get started with your business, which can reduce your startup costs. As your business grows, you may find that your needs change. Then you can use your profits to purchase new supplies and equipment for your event planning business.
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Marketing
Marketing includes a multitude of options on how you let potential customers know that you are in business. Ideas on how to market or promote your business can be garnered from your business plan. Your company’s name, its logo, mission and vision statements, and target audience might need to be revisited after you put together your marketing plan.
A professional website is essential for your business. Depending upon your background or maybe that of a family member, there are quite a few platforms on which you can create your own website. Some of the do-it-yourself options can lower your startup costs. However, if this is not your forte, you can hire a freelance website designer. Their costs will be on a sliding scale contingent upon how much work you want completed.
To get you going, using a template for lower costs is certainly better than amassing debt as part of your startup.
One area not to skimp on costs is purchasing your domain name. This should link to the company’s name. Your logo should pull all three components together. Again, a freelance graphic designer can assist with logo development. Freelancers can be a way to save some money on your startup budget.
Advertising can be costly. To control your initial expenditures, at the minimum, you will need to budget for business cards. Your business cards should be professionally designed and printed. The person who did your logo can probably also design your business cards. On your cards, you need your logo, URL, contact phone number and/or email, and company name.
Operational Elements
The last part of your startup costs to consider are all the parts of your daily operation. Visualize meeting with a potential client. Write down all the steps of this meeting. After the meeting, you need to develop a proposal. Think through all the details of what that will entail. Then great news, the customer accepted your plan. Now, list every step you need to make their special event occur. Finally, picture the day of the event, include in your brainstorming every hour of the event – including clothes you need to wear.
Your start costs need to consider all of these elements. Many of these costs will become part of what the customer will pay. Include in your calculations for startup costs the lag time between events and customer payments to you. How will you supplement your income until you begin to make money as an event planner?
Think about your fee structure as part of your startup costs. This will help you budget for your own income as your event planning business garners more customers.
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Frequently Asked Questions
- Do you need a college degree to become an event planner?
No, you do not need a college degree to become an event planner. Experience in the hospitality and business fields are great backgrounds for event planners. Skills noted by many successful event planners include organization, creativity, marketing, and communications.
- Do event planners need a special certification?
No, it is not required for event planners to have a special certification. However, there are organizations and certifications that can provide training, support, and resources for event planners. Working toward a Certified Special Events Professional, CSEP, or Certified Meeting Planner, CMP can offer benefits to you as an event planner.
- How do event planners earn their income?
Event planners earn their income by charging their customers a fee for their services of planning and facilitating the event. Often the fee is calculated as a percentage of the total cost of the event. Percentages charged range for ten to twenty percent of the total cost of the event.
- How can event planners increase their income?
Event planners can earn more money by offering more services. As an event planner, the more details of the event that you organized and facilitated, the more you can charge.
To learn more on how to plan your own event planning business click here!
Please note that the contents of this blog are for informational and entertainment purposes only and should not be construed as legal advice. Any action taken based on the information provided in this blog is solely at your own risk. Additionally, all images used in this blog are generated under the CC0 license of Creative Commons, which means they are free to use for any purpose without attribution.
About the author. A lifetime of Entrepreneurship.
Hi! My name is Shawn and I am a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop (link here http://archives.starbulletin.com/2003/05/18/business/index.html) to an import and export business to an online review business plus a few more and now I create online resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet new business owner, I see myself. I know how hard the struggle is to obtain and retain clients, finding good employees and making sure everything works together all while trying to stay competitive.