From our last article we proceed to calculating your event charge. Once you figure out what your niche, market, and clients will hold, it’s important you figure out how you want to charge. Most event planners charge one of these ways:
A fixed hourly rate.
This can be anywhere from 2,000KES on up. Most clients paying an hourly rate will want to know how many hours you expect the planning to take. With an hourly rate, you’re getting paid for the hours at the event but also the hours of coordination ahead of time.
A flat fee.
You review the requirements with the client and then present the price. Many clients like this approach because they know exactly what they will pay, but if you’re not good at estimating the time spent on the job, you’re likely to take a hit in this type of payment.
Percentage of profits.
This is a popular means of payment for those working in fundraising events. Your fee is based on a percentage of what the group raises. In this type of pricing, you need to be sure that you can fill the seats or you could be working for pennies on the dollar. Some event planners work for a percentage (usually between 15-20%) of the total cost of the event that way they know what they’ll make regardless of how many people they bring in.
A minority of event professionals base their fees on receiving commissions from venues, travel agents, and/or hotels. While these can be lucrative, it’s probably not your only pay. However, some clients are aware of these perks and may look down on “double dipping,” getting paid by them and a venue for the same services. Commission works well when you’re planning an event with a client who can’t quite pay you what your rates are, such as working for a nonprofit you believe in.
Hourly + expenses.
The final way to price your projects is to charge hourly, with add-ons to cover expenses.
Keep in mind many event planners are project managers and will subcontract out portions they don’t directly handle themselves, such as flowers, and then bill the client 15-20% over their cost of those services. This can also include things like printing and mailing.
You could use a basic formula to figure out your event planning cost is;
Sales – Cost of Goods Sold = Gross Profit
(Selling Price – Cost to Produce) / Cost to Produce = Markup Percentage
After you figure out your formula and how you will be charging for your event. Make sure to have those prices available for internal use. You might even want to consider having prices also available for external use too.
Many businesses do not distribute pricing and evaluate each case separately, and provide a catered proposal to their client based on each unique event. Whatever the case may be, make sure to communicate pricing in a clear and concise manner.
If you find you will have to place your pricing within a contract, make sure everything is laid out even the fine print associated with any line item if applicable.