Event Planning Business Overview

An event planning business organizes and coordinates events such as weddings, corporate meetings, social gatherings, and more. These businesses provide services that range from concept development to on-site execution, ensuring clients’ events run smoothly and meet their expectations.

Related: Checklist To Start A Business

How Do Event Planners Make Money?

Event planning businesses create revenue streams by charging for their time, expertise, and the value they bring to making events successful. Most event planners use a combination of pricing methods, including flat fees, hourly rates, or percentages of the total event budget. Pricing often reflects the planner’s experience level, local market conditions, and the complexity of services provided.

Common ways event planning businesses make money include:

• Planning Service Fees: This makes up the largest portion of event planning revenue because it represents the core business function. Clients pay for the planner’s expertise, time, and effort in coordinating all event elements, typically as a flat fee or percentage of the total event budget.
• Vendor Coordination Fees: Planners charge for managing relationships with caterers, decorators, musicians, and other service providers. This includes selecting appropriate vendors, negotiating prices, and overseeing the delivery of services.
• Design and Decor Services: Revenue comes from creating event aesthetics, including theme development, decor selection, and overall visual presentation of the space.
• Day-of Coordination: Income from managing event execution, including setup supervision, timeline management, and problem-solving during the event.
• Consulting Services: Revenue from providing expert advice and recommendations without full planning services, often charged at an hourly rate.
• Travel Fees: Income from coordinating destination events or traveling to different locations, including transportation and accommodation charges.
• Additional Services: Revenue from extra offerings such as RSVP management, guest list coordination, or budget tracking software access.

Industry Statistics

Event planning businesses are classified under NAICS code 812990 – All Other Personal Services. Here are some statistics that show the current state of the event planning industry.

Event Planning Industry Size & Growth: The event planning industry generated $6.8 billion in revenue last year. Over the past five years, the industry experienced modest gains with an annual growth rate of 0.1%. The industry is projected to grow slowly over the next five years as rising corporate profits lead to increased spending on business events and social gatherings. However, growth faces some resistance as more consumers opt for do-it-yourself planning approaches for personal events. (IBISWorld)

Number of Event Planners: The industry consists of 94,293 businesses. Three major companies dominate the professional segment: Abigail Kirsch holds 39.4% market share, followed by Marquee Event Group Inc. at 3.9%, and Choura Events at 0.5%. The remaining portion of the market consists of smaller independent planners and boutique agencies. (IBISWorld)

Event Planning Profit Margin: Event planning businesses typically maintain profit margins between 10% and 15%. The variation in profit margins depends largely on the types of events planned, with corporate events generally yielding higher margins than personal celebrations.

Also See: Ideas for Naming an Event Planning Business

Costs To Start an Event Planning Business

Starting an event planning business could cost between $2,000 to $25,000, depending on the business model chosen. A home-based business requires minimal investment, while a commercial location with dedicated office space needs significantly more capital.

Here are some of the main costs to consider when starting an event planning business:

Office Space: For event planners choosing a commercial location, initial costs include the first and last month’s rent plus a security deposit. Basic office renovations and furniture might be needed to create a professional meeting space. These expenses could range from $5,000 to $15,000.

Software and Technology: Event planning software, scheduling systems, and financial management tools help track events and client information. A computer, printer, and business phone system are also necessary. Initial technology setup costs range from $1,000 to $3,000.

Insurance Coverage: Professional liability insurance protects against potential claims from dissatisfied clients or event-related incidents. Event planners also need general liability coverage. Insurance startup costs range from $500 to $2,000.

Professional Certifications: While not required, certifications from organizations like the Certified Meeting Professional (CMP) program add credibility. Initial certification costs, including study materials and exam fees, range from $500 to $1,500.

These estimates represent general ranges, and actual costs will vary based on location and scale of operations.

Resources:
Event Planners Trade Association & Club
National Association for Catering and Events