If you aren’t running a business, you are running a charity; or at a minimum paying for an expensive hobby. Being profitable is a choice. You have to pay attention to your finances, your processes, and most importantly, your mindset.
Pricing is a mindset game, and there are multiple ways to price depending on your strategy. If you think you can make money, you will. But if you are afraid to make money because people won’t buy from you, they won’t. It all depends on how you view it.
There should NEVER be a situation where you have to spend money out of your own pocket to pay for an event. Every event you do should put money in your pocket and help move your business forward. Today we are looking at 5 ways you can price for profit and earn money on each event you host.
PARTYPRENEURS TIP: This is about earning a profit on each event, NOT your whole business. Your whole business has more factors like overhead costs and other expenses. That is a more in depth conversation that we aren’t covering today. This is profit on EACH EVENT so you can set up a solid process to make money on each party.
TIP #1 – Charge a Flat Party Planner Fee
So are you running a business or a hobby? A business is meant to create a profit for you. A hobby is an expensive project that just takes your money. In order to run a business, you need to make money, and that starts with your party planner fee.
A party planner fee is the base amount you need to make personally. It is your take home salary from each party. If you are leaving your salary out of your business and not paying yourself for your time, then you can’t truly have a profitable business. How can you pay others for everything else and not pay yourself?
If you don’t know this number, you need to find it out quickly! If you aren’t paying yourself, then you aren’t doing what you need to do to grow your business. Plus, getting paid means you are less likely to hit burnout and hate what you are doing.
You can find out HOW to figure out your party planner fee in our CHARGE YOUR WORTH course inside the Partypreneurs School of Party Planning. See below for more about the course and a special discount JUST FOR YOU!
TIP #2 – Rent Your Inventory
Your inventory is an additional stream of income for you. You can rent individual pieces to your clients or create a custom package to include certain items. Do you offer marquee letters? Create a package to rent the words BABY or ONE or other popular words for each of your events.
If a client is looking for 4 centerpieces that you have in your inventory and you charge $25 per centerpiece, you now have an additional $100 in your pocket. If you didn’t have these centerpieces in your inventory, you would have to buy it or rent it from another company. Would you pay for the items or charge the client? If it is in your inventory, you can make $100 on the first party and the next party and the next one after that.
Your decor and inventory should not be free! You have to spend time pulling these items and setting them up. There is also time involved to clean them and return them to your inventory after the party. Everything that you touch should have a price attached to it so that you are being paid for your time.
TIP #3 – Stick to Your Scheduled Hours
When you work for someone else, do you give them free labor? They ask you to work from 8a – 5p, are you going to stay 4 hours later? NO! You are going to work what you are scheduled and nothing else unless you are being paid additional money.
The same is true for you as a party planner. You should have a set amount of hours that each package or party should take you to set up and host. Understand these hours and work within that time frame for the party once it’s contracted. If you are being paid for 10 hours and you end up working 15 – 16 hours, you are doing too much and making less money.
When your client wants to change the scope of work and add something else into the package, charge it as an add-on so you are paid for the additional hours you are putting into the party. Your time and expertise is valuable and giving it away because you are afraid to charge is not the mentality that will make your business grow.
TIP #4 – Charge for All Vendors You Coordinate
Working with other vendors can help you build your network and give you an opportunity to add some additional income to your bottom line. There are several vendors that you can recommend such as balloon artists, DJs, face painters, etc. Each vendor you have to coordinate into your schedule is additional work on you and should be charged accordingly.
Be sure to let your client know this fee will be added. You don’t want to nickel and dime your client with multiple invoice revisions and small fees here and there. Be very clear and upfront about what you include in your package and what other things the client can add on to enhance their party experience.
Typically the markup is 15% of the vendor price for additional vendor coordination. The fee can go as high as 35% depending on location and other factors. As long as you are being compensated for the work you do, you can adjust the percentage to fit what you will offer.
PARTYPRENEURS TIP: This is a separate fee from your Party Planner Fee mentioned in Tip #1. Adding additional vendors that need your time and coordination should be charged for because it is beyond what you are contracted to do in planning the party.
TIP #5 – Do NOT Discount Your Fees
The moment you offer a discount, you are eating into your profits. Is this profit coming out of your salary? That means you are earning less and less every time you give the client “a deal.” This sets you up for a loss; the client is gaining while you are giving away money out of your pocket.
Instead of a discount, you should add value. A value add is a low cost option for you that will make the party a little more special, but doesn’t cost you a lot of money. Think about some things in your inventory that will fit with their party and offer them that as a bonus in the proposal.
Maybe you want photos of a new centerpiece that you just added to your inventory. Gift this item to them as a value bonus. The client gets an amazing centerpiece; you get the chance to feature something new in your business, and both of you win!
The point behind a value add is to give them something that they want and will also encourage them to book with you. It has to be of value to THEM, not you. Listen during your initial consultation and think about what you have available that will give them the boost they want to sign the contract.
Remember, this conversation is about making a profit on each event, not your whole business. But the more you make a profit on each event, your business will start to profit as well. It takes time to learn your hours and what will work, but the more you do, the better you will be. You will be more confident in speaking with your clients and how to present yourself.
But you don’t have to figure it all out on your own! Finally….there is a course that shows you EXACTLY how much you should be charging and how to come up with a profitable pricing strategy so you can profit on every single event. NO MORE GUESSING! NO MORE CHARGING WAY BELOW WHAT YOU SHOULD! LET’S MAKE THAT MONEY!
Our Charge Your Worth course is our MOST POPULAR course and has gotten rave reviews. Check it out here and as a gift to you…you can use coupon code: PARTY100 for a limited time to get $100 off the course. OH YEAH! CLICK HERE FOR ALL THE DETAILS!
PIN FOR LATER!
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