Learn How to Determine Your Event Planning Fees
Is your event planning business charging enough? A competitive event planning fee schedule can ensure the success and profitability of your business. Unfortunately, many professional event planners struggle with establishing a fair rate for their planning services, especially when first starting their businesses.
How Event Planning Fee Schedules Are Determined
A variety of factors is involved in determining fees. Such factors may include the type of events you are planning, operating expenses, and overhead costs. In addition, fee schedules may also vary based on where you are in business. The reality is that you can typically charge a lot more for your services in a large, metropolitan area than in the suburbs. Beyond what your local market is willing to pay, there are several different ways that you can structure your fees. They are:
- Hourly rate
- Flat project fee
- Percentage of expenses
- Percentage of expenses plus hourly fee
- Commission rate
With the pricing by the hour option, you have the best chance of ensuring that you are fully compensated for all of the time that you spend planning an event. Event planning fees associated with this option may range from about $25 per hour up to $125 per hour, but that will naturally depend on your experience and qualifications. Keep in mind that with this type of fee schedule, you will need to keep detailed records so that you can provide your clients with an itemized bill. It's also usually a good idea to provide your clients with an estimate regarding the number of hours you will need to spend on their event.
Percentage of Expenses
When you want to keep things simple and not have to worry about billable hours, pricing by the percentage is a good way to do that. With this option, you simply establish a price based on a specified percentage of the total event budget.
The typical range here is between 15% and 35%, but that will vary based on what you are able to negotiate with your client. Obviously, there are some advantages and disadvantages to this type of fee schedule. The fee by percentage option can be highly profitable if you do not spend a lot of time on an event. Conversely, you can end up really selling yourself short if you spend a lot of hours on a small budget event.
The pricing by commission rate is another option to consider. With this option, you will need to negotiate a discount from all of the various service providers. Keep in mind that it usually is not good business practice to also charge your event planning clients using an alternative form of billing in an effort to 'double dip.'
Flat Project Fee
While clients often prefer the flat project fee so that they will know precisely how much an event is going to cost them upfront, this can present some disadvantages for you. Primarily, it places the burden managing the budget on you.
As a result, you must also be responsible for anticipating different situations in which circumstances could change, thus impacting the budget. In most cases, the flat project fee schedule is used packaged events in which fees can be calculated per person attending the event.
Keep in mind that regardless of how you choose to charge for your services, it is important to make sure that all of your expenses and overhead are sufficiently covered while still allowing plenty of room for profit.