Party Planner: Building Your Business Base
 
 


Party Planner: Building Your Business Base

The Market and the Competition

You can start a party planning business with very little money. It is, however, always wise to conduct some type of market research to determine the needs in the area where you want to plan parties.

Say you live in an area with a population of 100,000 people. This can be a profitable area for social party planners if your area consists of people with high incomes. The greater the income, the more prospects. If you live in an area with a population base of 60,000 people and most are affiliated with manufacturing, you may decide to keep your business more toward a smaller scale, such as children's parties, or smaller adult parties. This is a question you must answer when doing a market analysis.

Another question that deserves attention is whether the area's demographics are compatible with the market you plan to serve. You might be wondering, what exactly does this mean? Let's say you live in a college-based town, where the majority of the population is 18 to 23 years old, single, a tad more females than males, and most well-educated. Or you may live in a large city, such as Los Angeles, where the economic base is usually stable, but has undergone trauma and the economics are still a little slow; but there is potential and a lot of competition. To make a solid decision, you may want to pay special attention to the competition's pricing scale and their length of event-planning experience in comparison to yours.

Conducting market analysis/research doesn't need to be difficult or exceptionally time consuming. Many chambers of commerce have offices that track their area's economic development, others may not be quite that sophisticated. www.bls.gov/cex/ does surveys pertaining to how families and individuals spend their money.

Memberships in event-planning associations offer a wealth of industry-related information and opportunities to network with your associates.

Who Are Your Prospective Clients?

Once you have completed your marketing analysis, the next step is to interview potential clients. Why not start by asking your mom friends what they would expect from a party planner hired to plan a birthday party for one of their children? Start building a portfolio of needs, and when the party is over, testimonials. Here's a short list of questions you might ask:

  • Do you have a party theme in mind? This could be a princess party, pool party, outer space party, camping party, sleep-over party or a backyard party packed with games.
  • Will it be an inside, outside, or a venue party -- such as a roller skating rink?
  • Would you like entertainment, such as a clown, magician, disc jockey, or roller skate instructor?
  • How many children are expected to attend? And their ages?
  • What is the anticipated length of time for the party?

It helps to know, or to have met, the party host or hostess for the party when first starting out in the party-planning business. Once you have built up your confidence, you can branch out to organizations, specialty, or non-profit groups. Prepare by educating yourself on current party trends and come up with original special theme suggestions. If you are leaning toward social parties, keep in mind that women do most of the social planning.

Also consider interviewing professionals, such as photographers and caterers. Once you have completed your interviews, determine how you can transition your strengths, and where the opportunities lie. If you enjoy working with children, great. Perhaps you have connections and a love of community and could work on the parade or pancake breakfast planning committee.

A very successful Spanish festival event for parents and their children was held in a small mountain town in northern California. The purpose was to raise enough money by selling tickets, and through raffles, to hire a special Spanish instructor for the town's two elementary schools.

Crafting a Business Plan

A typical business plan runs about 25 pages and involves many hours of preparation. This usually is done by yourself, rather than hiring a ghostwriter to write the plan for you. The plan should reflect your personal viewpoint, depth of vision, and project your voice. If you are not a confident writer, you can always have a freelance writer or editor polish the plan after you have completed it. A well-conceived business plan should provide a road map for the future of your business. Your business plan is the means by which to manage your new venture.

If you are applying for a business loan, your business plan is the foundation for communicating your plan to the potential lender. If you are not planning to finance your business, you will still need a business plan to reinforce your goals, to decide where the company needs to go, instill awareness of the possible roadblocks along the way, and to prepare responses to certain possibilities. The following components will help you develop a successful plan:

1. Executive Summary - This is the actual meat of the plan discussing all the fine details of the types of services you will provide, your vision, and short- and long-term goals. Long-term goals are often an extension of your short-term goals. Ideally, goals should be reviewed at least once per month. Be prepared to change existing goals. As your situation changes, new goals may need to be considered. Finally, if you don't set goals, you'll never reach them.

2. Design and Development - Here is an opportunity for you to discuss how you plan to grow your business and develop new markets.

3. Market Strategies- This is where you will outline or disclose your marketing strategies.

4. Competitive Analysis - Almost all businesses have competition and this is where you'll discuss how your services will be more innovative and differ from the others.

5. Management Plan - Describe how you will run your business, whether you will hire employees, and if this will be a full- or part-time business.

6. Financial - Whether you're thinking large or small growth, you financial future should be outlined for one to five years.

You may feel a business plan is not a necessity. Wrong. Ask any successful business owner and they will tell you their business plan was vital to their success. Envision yourself sitting down in front of a loan officer at your friendly bank. When asked to see your business plan in writing, will you give the loan officer a copy of your plan, or will you shirk down into your chair? If you don't know how to begin drawing up a business plan, checkout sba.govsmallbusinessplanner/plans/index for business plans, or www2020software.com for financial planning.

As you describe your business plan, you may ask yourself questions such as: Should I have a partner or go solo? What shall I name my company and do I need a logo? Is my wardrobe professional enough? Am I going to work full-time or part-time? Should I become certified?

Party planning is a wise choice for someone who wants a home-run business that requires hardly any capital. The special event/party planning business has grown enormously in the past decade. Here is an example of a low end start-up cost.

Rent

$0

Equipment

$2000 to $5,000

Inventory

$0

Licenses and Taxes

$250

Communications

$150

Payroll

$0

Advertising/Promotion

$500

Legal Fees & Accounting

$700

Insurance (1st Quarter)

$750

Miscellaneous

$600

Want to learn more? Take an online course in Party Planning.

Note the equipment cost is high, and the quarterly insurance rate substantial. Shop around for better insurance rates and start out with used, or a minimal amount of equipment. There is ample software on the Web to help you do your own accounting. You can do it!

Setting Goals

Many flourishing party planners have decided to take their business international and have had a favorable outcome. There is much to think about before attempting to do international party planning. However, you can still set goals and have a prosperous business by staying within a certain area, or in the U.S. Keeping track of your goals on a day-to-day basis can help keep the wind beneath your party planning sails.

Set up a goal calendar. Any 365 day calendar will do fine. Each day you stick to a specific goal, or successfully meet a goal, mark it on your calendar. For example, if your goal was to set up and complete two steps within your marketing plan, and you have successfully done that, mark it on the calendar. Keep your goals simple and realistic until you feel comfortable expanding on them. If the goal is a large goal or a big change, set small gradual goals, rather than attempting a large goal all at once.

Short-term and long-term goals can be broken down into a day, a week, months, or even seasonal. Often, short-term goals become long-term goals and vice-versa. Goals can change like the weather, however; if you don't keep track of them, you lose your momentum and that's a formula for failure.

Show Me the Profit!

Pricing Your Events

When pricing your services, be sure you charge enough. This means assessing, on the up side, what you need to charge to turn a healthy profit. Low-balling your bid or proposal just to get the job is financially frustrating and annoys the competition. Not making enough profit can have a toxic effect on you and your business. Of course, start-up in any business should be a learning experience. Keep in mind that controlling expenses can be easier than predicting profit. Do you really need the expensive copy paper? For the price of having them picked up, you can mail your own packages. Fresh flowers every week for your home office? You get the idea.

Charge enough, but not too much. Therefore, when first starting out in your party-planning business, proceed with caution. Start out with six months cash reserve. You may be a risk-taker, however, this is an area where taking risks is foolhardy.

Upon signing of contracts with clients, obtain a deposit. You need this to pay vendors and site deposits. You should never be in the mind-set of financing someone else's party. There are more than enough of the dreaded deadbeat stories such as: The woman throwing the party bailed out on her hotel tab and stuck the party planner, who did not get a large enough deposit. If the party is on short notice, certain planners ask for a sizable deposit -- enough to cover vendor and site expenses, or any other deposits you may be requested to pay. Others ask for full payment up front.

Your goal when pricing your party-planning service, is to make enough to turn a profit, and cover overhead and expenses. For any sized project, a budget is created. Start by asking other planners what their fees are. This is based mainly on the professional's qualifications and experience. There is actually more than one way to price your services, such as:

  • Price by the percentage - For example, estimate the cost of your services as a percentage of the total budget. A benchmark might be 20 percent to 25 percent of the total budget. If the client wants an elaborate decor, gourmet food, and expects a large amount of hand-holding, it's within your right to increase your fee.
  • Price by fee - If you learn early on that the project will require extensive reporting, the potential of ongoing changes, or written reports up until the time of the event, define what you will do for a set fee and farm the reports out by the hour. Experience is always the best teacher and that's why you may want to work with a meeting planner before you go out on your own.
  • Price by the hour - The hourly fee can be anywhere from $25 per hour, up to $125 per hour. Here is where you should learn to price your services properly and professionally. You want the client to value your services, not to resent them.

These are the typical ways of pricing your services. You can reasonably price however you wish, but if you are just starting out in the business, it's best to stick to the most common ways of pricing yourself until you have developed your business to the point where you can explore increasing your fee.


The Party Proposal and Agreement
Party Proposal

As you do business, you will need an array of invoices and purchase orders, some of which are pretty standard and can be purchased print-ready with typical language. Let's concentrate on proposals and agreements. Each are important, however, the proposal is what gets your party-planning foot in the door. A proposal might consist of any or all of the following basics:

  • History of your company (if you have one).
  • What the planner will provide
  • Press releases or trade write-ups.
  • Event Description is where you can really sell your company and your ideas. Take the client through the event from start to finish. This includes floral arrangements, special draping, lighting, music, or entertainment:
  1. One hundred and twenty-five guests will be served a variety of Asian style appetizers, including Peking shrimp, hand-wrapped pork dumplings, and complimentary cocktails in the blue room for one-hour.
  2. Decor will include assorted potted plants, soshi screens, and Japanese lanterns.
  3. A sit-down dinner will be served in the Hyatt Regency main ballroom. The menu will consist of puree of potato leek soup, orange spinach salad, a choice of prime rib or fresh sea bass. A vegetarian meal will be available when ordered one week prior to the event. Apple strudel with clotted cream will be served for dessert. The vintage being poured is a Sterling Merlot and Chardonnay from the California Napa Valley.
  4. The (pro bono) guest speakers will be introduced during dessert and coffee.
    This merely gives you an idea of what you can do to dress up this area.
  5. A description of services outlines who you will hire for the catering, place settings glassware, etc. and service duties.
  6. Other services may include the floral designer, rental agency, and any other services you are paying for.
  7. Production schedule. This is mainly so the client can know the pertinent timing during the event, such as cocktails, dinner, and finish time.
  8. Cost estimates accompany all proposals for large or small parties. It's wise to include an expiration date. You don't want to be held down to your pricing one year later.

You now have an idea of what a proposal should include. Adjectives, in good taste, are welcomed. Keep in mind, this is your proposal and you can polish it up to really shine. You want the client to envision the whole picture and be excited by the proposal.

Agreements
Agreements are necessary to detail all aspects of the event and insure vendors are properly bonded and insured. This is where forms from another event/party planner can be helpful to give you ideas of what you must cover in your agreement. Event planning associations, such aswww.eventplannersassociation.com, also have basic agreements available. The agreement/contract varies by state to conform to state code. While you may draft your own agreement, and have an attorney review it, your client may wish you to also sign their contract. Information in each contract should basically correspond. If they do not agree in part, discuss it with your client or have an attorney review both contracts. The following is a list of some of the agreements you'll be dealing with:
  • Client Agreements
  • Vendor Agreements
  • Site Agreements

 
 
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