In this article, you’ll see critical factors to keep an eye when starting an event planning business. But we’re not just letting you know about common business plan mistakes. We’re also bringing the solutions to go through this decisive moment.
Is it worth starting an event planning business?
Like everything in this life, it depends. Producing events can be a wonderful experience, capable of moving, generating a valued relationship and, of course, excellent business. On the other hand, producing events involves continuous stress during the entire period of its production. Therefore, it is always important to analyze the professional profile and identify what we expect for our future. And we still didn’t reach the point that, you, as the event planning services business owner, will have to take care of a lot more than just the event planning aspects.
Usually, producing events involves a hectic pace for some time and a lull afterwards. However, being able to control these doses of emotions can be difficult for someone less experienced.
But in the end, for those who know how to enjoy the event production process and for those who can think strategically in the long run, producing an event is very worthwhile. Not only for the financial return, which is great depending on the event, but also for the possibility of seeing a whole job working in practice, thrilling, generating business and motivating. And all thanks to your work.
The challenges of starting an event planning business.
You just realized: you got enough knowledge, you’re a successful event planner. So it’s time to make some serious money out of your expertise. It’s a new moment and it’s full of expectations.
But how to design a accurate, value-based business plan and pricing strategy? Several factors and strategies can interfere with the success of your event agency. And when it comes to strategies for your new business, as important as what you have to do, is what you have to avoid. This article will help you eliminate common mistakes and make your current customers and potential clients realize the benefits of hiring your agency for their upcoming events.
What to consider when starting an event planning business.
The various aspects and characteristics that must be considered and noted in order to organize the entrepreneur’s mind include:
- What services and products should be developed? The services and products offered will be the reference for the next steps of setting up your business; the way customer service will be and also their basic needs
- Who is the customer and how do I attract to my business? Another important issue that will be a reference for your business disclosure plan and also a fundamental piece to gather financial resources for your activity
- Where will the company be installed?
- What price to charge?
- Which professionals to hire for business improvement?
6 common mistakes Event Planners can avoid when starting their event planning business.
1. Pricing not looking at competitors.
Obviously, you want to close good deals. But how to identify how much to charge? How do you foresee the perception of your audience regarding your prices?
You’ll likely find established prices by event planning business entities. But the ideal price for a product goes far beyond pre-established formulas. It is strongly recommended that you compare your prices with your competitors in the industry when setting your mark up.
Solution: Do a strategic research and analysis of markets and competitors in the event planning industry. It’s hard work indeed, so to guide you through this task, consider the following questions:
- What’s the market share of your main 3-6 competitors?
- What’s the total size of the niche you’re planning to break into?
- Who are the people buying from your competitors?
- What these shoppers are exactly paying for?
- Why these shoppers buy from these competitors?
- What kind of bureaucracy you’ll have to deal with, that you did not before (e.g.: permits, taxes, banks, loan interests)?
2. Pricing based only in competitors.
In addition to competition, there is a need to know your customers in depth. Satisfied customers are re-sellers. Customers loves knowing that they’ve taken advantage and gained benefits. If, by buying from you, people understand this clearly, and the transaction is worth it to your agency, you have reached the ideal price.
Solution: In addition to knowing your customer deeply, create value-based pricing strategies. Never show your customer separate prices and fees, or you risk commoditizing your service. Events are projects of extreme complexity and, explaining item by item, can make your client understand that he has the power to cut items that make the scope of the project unfeasible. If you need somewhere to start this work, consider your price as:
event cost to agency + added cost percentage + agency fixed and variable expenses + desired profit = final price.
3. Pricing based only on costs.
As we saw in the previous item, satisfied customers are re-sellers. And these people love to tell stories. So if the biggest asset of your service is price, that’s exactly what your clients are gonna recommend you for. Don’t fall into the trap of “I’m going to start cheap to gain market, then change.”
Solution: The critical factor that defines the success of a sale is doing your research to find a clear target market and consumer satisfaction. A great way to do that is to start measuring your customer satisfaction today using NPS, the most simple and effective methodology for this task.
4. Defining service portfolio considering only sales bias.
The health of your own event planning business is determined by financial aspects, but not only. Other factors, such as quality, efficiency and post-sale value stacking are also determining factors.
When giving event planning services presentations, you will probably talk about the product you offer by referring to them as experiences. So don’t forget that whether you close the sale or not, your prospect is experiencing an experience with you at that very moment. In short, any point of contact of your customer with your brand is already an experience. In the age of customer infidelity, it is essential to remember that any second you spend in a customer’s life must add value.
Solution: Events are products with high added value precisely because of the possibility of customization. To understand in detail what is needed to differentiate your experiences and how to do so, see our article What 1:1 Marketing really is and how to do it at scale.
5. Giving up on building your event planning business brand.
Corporations have approved budgets for their event marketing and need to find reliable partners to carry out these projects. Who is the VP or Senior Manager of any company who would not like to immediately perceive the professionalism with which they are being treated?
One of the purposes of your projects as an event agency should always be to seek differentiation. This is how your event planning services should be known and this should be why your clients will recommend you. So work on your business name.
Given the events market as a whole, the correct organization and structuring of your company may already be the first major competitive advantage.
Solution: Differentiation and Networking are the main tips here. Turn any abstract or hard-to-define idea into something concrete and tangible that people can picture quickly. Show functionality and performance. Keep in touch with influential people you met during your career so far – it’s a common mistake for entrepreneurs to think that they can do it all by without any help or advice.
6. Forgetting that this is not about what you want to sell, but what the client wants to buy.
Shopper choose offers based on what seems to be more valuable. Especially in the corporate world, where selling is more rational and any incurred cost is highly taken into consideration.
Solution: in order to charge for your events properly, define your business name and positioning first. You have renowned certifications? Show them off. What types of events can you plane? Only corporate events and meetings or social events too, such as weddings? Is social media included in your service portfolio? Is there an area in your website to show this kind of information? You even have a website?
You even have the time to build it all? Time management will be crucial to have a clear answer to points like these. Only after that, name your prices. And don’ t forget to be honest to your self: where you are at the moment and where you wanna be are different things. The events has a lot of opportunities, but it’s also very competitive.
Conclusion and key takeways
Strategies that drive competitive advantage and differentiation are critical success factors for your agency. This does not limit to the initial phase, but also to the rest of your event business life. Remember that all indicators converge on only one point: your agency has to be profitable.
To maximize returns, review your strategy at least once a year. Don’t be afraid to redo the math when needed. Event management demands goals revision and adjustment of directions as it goes.
It’s completely normal to commit mistakes when planner go from employees to business owners, but make it fast. So, when you notice you got a wrong way, there’s more time available to react.
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