How to Start an Event Planning Business
Planning a successful event, like a wedding or conference, is challenging and stressful, but it can also be highly rewarding when it goes well. Some people hate the challenge and stress that come with event planning, while others thrive on it. If you are skilled in planning events that go off without a hitch, then an event planning business might be right for you. Starting your own event planning business can be the first step in your success, and with your own business, you’ll be in charge of everything, from what types of events you decide to specialize in and how you market yourself.
Event planning businesses help corporations, businesses, and individuals to plan and execute all kinds of events like weddings, birthday parties, graduations, celebrations, retreats, product launches, and conferences. An event planner typically works closely with the event’s host for months or years leading up to the event, and they’re tasked with ensuring that the event runs smoothly. Most event planning businesses offer a relatively full-service program where they manage nearly every aspect of an event, from coordinating with caterers to planning the event’s layout and decor with the venue.
Some event planners work independently, establishing their own businesses, and working entirely by themselves. Others will start their own businesses and develop a team of planners for large-scale events or increased project volume. Many event managers will establish relationships with caterers, decorators, florists, and other industry professionals. These existing relationships can help with future event planning and are one of the ways that planners add value to each job that they do.
Getting into the event planning industry is relatively easy since there aren’t any education requirements, and there are minimal startup costs. But because it’s easy to get into the industry, you’ll probably face lots of competition no matter where you’re located. This means it’s important to find a way to differentiate your business from others, whether it’s with a unique skill set, specialization in certain types of events, or something else that you can offer that other businesses don’t.
From 2014 to 2019, the party and event planning industry experienced a 2.9% annual growth, according to IBIS World. The number of businesses increased to 142,097, and industry employment also grew to 132,042. In 2019, the industry was predicted to bring in $5 billion in revenue.
This growth is closely linked to the improved economy during that same time period. With more per capita disposable income, more people chose to host events and hire professional help. Similarly, companies that enjoyed increased profits during that time were also more likely to host events. The increased overall busy nature of American lives tends to leave more people with less time, making them more likely to hire help rather than attempting to throw an event by themselves.
According to Endless Events, many trends are shaping the events industry in 2020 and beyond. Personalization has become more important to event attendees, especially when it comes to corporate events and conferences. Personalized emails, multiple workshop tracks, and personalized content have become increasingly important, and attendees notice when these elements are missing from an event experience.
Event planners also need to be aware that the focus on event sustainability is continuing. Many event hosts and attendees increasingly value eco-friendly decor, plant-based catering, and the use of recycled materials. The more strategies an event planner has to make events sustainable, the better they’ll keep up with this important trend.
Unfortunately, another significant trend is the need for event security. This includes everything from onsite security, cybersecurity, and emergency communications plans. An emergency plan needs to be in place for every event, especially larger corporate events that draw significant crowds. These security needs may add one more element to an event planner’s to-do list, but this is also a precaution that modern-day events can’t afford to go without.
Event planning businesses target those who are hosting an event. Some businesses focus on corporate events, while others will market to the general public with significant financial resources. In all cases, these events tend to be larger, more expensive affairs. Event planners offer both skill and convenience, and their target markets value those elements and have the disposable income to afford the event planning services.
Some event planners niche down even further, offering services for a specific type of event, like weddings, conferences, or fundraising galas. This will further define the business’ target market.
Checklist for Starting An Event Planning Business
If you’re thinking about starting an event planning business, it’s important to do your research first. Here is a checklist to help you get started.
Step 1: Write a Business Plan
After coming up with the idea, the next step in starting your business should be to write a business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.
Related: How to write a business plan
Step 2: Name the Business
Finding the perfect business name can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
When deciding on which business entity is best for an event planning business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay.
The corporation can be a good choice to minimize liability risk because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: Guide to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
IncFile - $0 plus state fees & free registered agent for 1 year!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
Step 4: Select your Location
It’s often possible to start an event planning service out of your home. If the business expands and you decide to hire employees, renting an office space may become a recurring operational expense. Rental rates will vary depending on the size and location of the space.
Related: Choosing a business location
Step 5: Register for Business Licenses and Permits
There are no specific licenses for an event planning company; however, there are general business registrations at the local, state, and federal levels that an event planning business might need, such as a local business license, sales tax permit, and Employer Identification Number.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start an event planning business is another. Funding to start an event planning business can be difficult. In order to get a small business loan, the borrower(s) will need to have good credit and personally invest 15-25% towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your small business and personal finances in separate bank accounts is important to track the income and expenses of your business and identify trends.
Many banks offer free business checking accounts, so be sure to find a cost-effective option for your business.
Step 8: Get your Marketing Plan in Place
While some customers will become returning customers, event planning businesses need to continuously market to bring in new customers. A portfolio of photos of past events and testimonials will be a powerful way to build credibility with potential clients.
Some common marketing techniques include social media marketing using Facebook, Twitter, Instagram, and Pinterest), print, and television advertising.
It may also be worth networking with catering businesses, photographers, and other event venues as each business can refer clients to the other. While other event venues will be competitors, if they are booked for a particular date, they can refer potential customers your way.
Step 9: Get Business Insurance
There are several types of insurance to consider when starting an event planning business. A few of these include:
– General liability insurance helps to protect the business if customers or their property are injured or damaged due to the business’s actions or work.
– Commercial auto insurance covers a vehicle used for business use, offering protection if the vehicle is involved in a car accident.
– Worker’s compensation insurance helps to cover expenses like medical bills or lost wages if any employees are ever injured while on the job.
The cost of insuring an event planning business will vary according to factors like the number of employees a business hires and the value of the business’ equipment. To get an accurate idea of insurance costs, request quotes from multiple providers and see how those quotes compare in terms of variables like premiums, coverage limits and exclusions, and deductibles.
Step 10: Hire Employees
As a business grows, it may help hire an event planner assistant on a part-time or full-time basis. According to PayScale, event planner assistants earn an average of $14.66 per hour or $35,856 per year.
In addition to budgeting for employee salaries, a business will also need to cover other employee-related expenses, like workman’s comp insurance, paid time off, and even health insurance and retirement contributions.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:
- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.
Find bookkeepers in your local area or use a service like 800Accountant.
How much does it cost to start an event planning business?
Starting an event planning business requires minimal startup costs, and event planners can start this type of business from their homes to further save on office space costs. It’s possible to start a basic event planning business for as little as $4,000, assuming an event planner already has a vehicle they’ll be able to use for transportation to client meetings and events.
Some common startup costs for an event planning business may include:
– Event planning software
– Marketing materials, like business cards
How much can an event planning business owner make?
Potential profits for event planning businesses range widely. According to Glassdoor, the average salary for an event planner is $49,696 per year, but salaries can actually range from $35,000 to $71,000 and more. Many factors affect salary, including the planner’s experience and years in business, location, and specialty or unique skills.
Are there grants to start an event planning business?
It’s extremely rare to find a grant to start an event planning business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What skills are needed to run an event planning business?
Starting an event planning business doesn’t require a business degree, but certain skills and experiences can increase the business’ chance of success.
Event planning experience or education. Knowledge of event planning, its best practices, and experience in planning an event for others is important. A business owner might also have gone to college to study event planning, event planning certification, or have event management experience.
The ability to think clearly under pressure. Even with the best planning, unexpected issues still crop up during an event. Event planners need to be able to think clearly under pressure, and they should be able to quickly find creative solutions to problems.
Attention to detail. Planning events requires excellent attention to detail, including elements like logistics, time management, and budgets.
High degree of organization. Event planners have to manage many moving parts to every event, and excellent organization is important during every step of the process to ensure that nothing gets missed or overlooked.
Negotiation. Event planners will negotiate with suppliers, entertainment, and contractors to decrease their costs and ensure the client gets what they want.
Customer service skills. Event planners will need to have plenty of interaction with their customers, so great customer service skills can build the planner’s reputation and increase customer satisfaction.
Strong interpersonal relationship skills. An event planner will need to be able to work with many different people during the course of a single event, and many of these people won’t be the planner’s employees. The ability to build strong interpersonal relationships and work well with a variety of personalities is essential.
What is the NAICS code for an event planning business?
The NAICS code for an event planning business is either 561920 (event planners focusing on conventions and trade shows) or 812990 (event planners focusing on personal events such as wedding planning).
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Related: What is a NAICS code?