Are you daydreaming right now from your cube or home office about the notion of starting an event planning business? Perhaps you’ve been working in the events and meetings industry for several years and think that now is a good time to figure out how to work for yourself. Or maybe you’ve helped organize a few events in the past and feel that this could be your life’s passion. These are all good reasons to pursue this profession. But anyone who contemplates the fantasy of starting their own event planning business must follow some important steps before you even beginning to talk to clients.
Gain Event Planning Skills and Experience
The long-term success of an event planning business will be based on the experience that the planner brings to his or her clients. That means, if you’re thinking about starting an event planning business, you should have a solid grasp as to what an event planner is, and make sure you have some solid skills:
- Verbal and written communications
- Organization and time management
- Negotiation and budget management
- Creativity, marketing, public relations and more
It would also be helpful to obtain professional certification in the industry, including CMP designation or involvement in MPI.
Determine Your Event Planning Market/Forte
Okay, let’s say you’ve been working in corporate meetings for five years and are ready to create a business. The first thing to realize is that your strengths are in the corporate arena. A common error many planners make is to say that they are willing to coordinate all kinds of events, including corporate meetings, weddings, fundraising galas and more.
Stop. While the urge may be there to offer a variety of services, the reason you’re ready is based on your collective previous experiences. In time you may handle a full range of events, but initially recognize that there are distinctive differences between corporate, association, nonprofit and social events. Determine your market accordingly.
Develop a Business Plan
Because you decided on your market, you may be thinking this is a good time to share the news about what you can offer to the world. Not so fast. Starting your own business isn’t as glamorous as such fantasies. Like everything else, starting an event planning business requires a business plan.
The good news is that several resources are available to help. Expert to Home Business Randy Duermyer provides some insights into business plan basics and walks you through the process. The U.S Small Business Administration is a good resource that publishes materials about writing business plans as well.
Designate Which Business Entity Fits Best for Your Firm
Now that you realize that creating an event planning business should be viewed as a “work in progress,” it’s very important to determine your business structure in the beginning. The most fundamental step is to make sure you decide what type of business entity works best for your plan. For this, it’s important to secure professional advice.
There are several options available to you, and it’s important to select the type of business organization that best represents your interests. The Expert to Tax Planning William Perez outlines the six forms of business organizations recognized within the U.S. by the IRS: Sole proprietor, C-Corporation, S-Corporation, Partnership, Trust and Non-profit organization.
Obtain Business Insurance
Business insurance is mandatory. Event planning businesses should secure general liability and other forms of insurance to protect the business owner’s interests. Several forms of insurance exist, so it’s best to speak with an insurance advisor to learn all of the requirements.
Whether you plan on starting a home-based business or if you will have a small office elsewhere, ask questions about these forms of insurance (but not limited to) as follows:
- General liability
- Product liability
- Home-based insurance
- Worker’s compensation
- Criminal insurance
- Health and other benefits
Develop Your Network of Suppliers and Staffing Resources
It’s time to try to lighten the burden of business structure for a moment. Now it’s time to consider who you want to include in your network of suppliers. Event planners work with a variety of suppliers, including caterers, florists, photographers and more.
And although you may think that you can handle all tasks, ultimately you are going to need to establish an infrastructure of resources to support your events and overall operations. This includes staffing resources for administrative, sales, marketing, communications, legal, accounting, and other functions.
Define Your Event Planning Services
Some of you may be disheartened by the reference to “legal” and “accounting.”. Don’t be. They are very important friends and resources. But now it is also a time to think a little deeper and continue pondering what types of event planning services you will offer.
We recognize that many of you have probably already thought of this, but it’s important to stay focused on your core services. What’s your product? Who is your target market?
Will you offer full-service planning and execution on behalf of your client for venues, catering, production, speakers, gifts, transportation, lodging and more? Will you specialize in one particular aspect of the planning? What about communications services for event communications and more?
Establish an Event Planning Fee Structure
With services in mind, it’s important to determine your fee structure. Many independent and small event planning firms should be conscious of the various ways to cover their expenses and make a reasonable profit. After all, this will help keep you in business five years from now. Most event planners charge based on the following:
- Flat fee
- Percentage of expenses
- Hourly rate
- Percentage of expenses plus hourly rate
- Commissionable rate
Secure Funding for Your Business
In most cases, this shouldn’t be step 9, but it’s important to be motivated by the work that your new firm will bring so that you don’t get discouraged when considering the necessary realities. And each business owner will vary how he or she chooses to secure and source such funds.
Most businesses require an operating budget, and it will be important to have access to a comfortable base of cash while establishing the firm. While it is possible to establish a business with limited funds, it is still important to have enough money to start your business and cover any living expenses while waiting to become profitable.
Focus on Business Development and Marketing for Your Event Business
With your business model in place, an understanding of your services, a sense of how you will charge for your services, now it’s time to begin to develop important business and marketing materials.
Well, now you’re ready to choose the right name for your business and work your business development plan. You will also need to create business cards, stationery, a website, sales collateral, proposals, client agreements and more.