For many people, planning an event is challenging and stressful, and that’s why event planners are in demand. So, if you have a passion for planning and love bringing people together, starting an event planning business may be perfect for you.
Starting an event planning business isn’t just about knowing which fork goes where on the table setting, but with the right knowledge and preparation, you can turn your skills into a fun and profitable business. That’s why we’ve put together this guide on how to start your very own event planning business. This guide will not only provide you with an overview of the business and the industry, but it will also give you step-by-step guidance and answer common questions.
Business Overview
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 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 many 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 with a unique skill set, specialization in certain types of events, or something else you can offer that other businesses don’t.
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Industry Summary
From 2018 to 2022 (which included Covid shutdowns), the party and event planning industry experienced an average decrease of 4.1% annually, according to research from IBISWorld. In 2023, the 112,000 party and event planning businesses are expected to generate $5.6 billion in revenues.
The industry is poised for future growth due to a few main reasons. One, 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 attempt to throw an event by themselves. Secondly, with the rise of social media, people are constantly sharing their pictures and videos of events, making events more important than ever before. This means that there are plenty of opportunities for event planners to enter and grow in the market.
Industry Trends
The event planning industry is constantly evolving, with new trends emerging every year. In recent years, there has been an increase in demand for personalized and unique experiences. People want events that are tailored to their specific tastes and interests.
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.
Steps To Start An Event Planning Business
With the proper groundwork and research, you can start an event planning company that allows you to pursue your passion. Here are some of the key steps to follow.
Step 1: Market Research
You’ve got the skills, the drive, and the vision – and now you’re all set to start your business. But wait, before you print those business cards or design your website, let’s take a step back. Doing your homework in the form of market research can help guide you on whether there’s enough demand for another event planning business like yours, potentially saving you from an expensive mistake.
To start, you need to identify your target market and the types of events you want to specialize in. Whether it’s weddings, corporate events, or fundraisers, conducting research into the demand for these events in your local area is needed. By doing so, you’ll be able to identify your potential clients and see if there is a need for another event planning business in your area. The key here is to gather data that will allow you to make informed decisions about your business plan.
Next, you want to gain a better understanding of the event planning landscape in your area by examining your local competition. Search online directories and industry publications to find other planners in your area. See what services they offer, their pricing, and brand identities. This can help you identify unmet needs or niches that you can fill in the market. You can also use this knowledge to differentiate your business and offer unique services that will set you apart from your competitors.
Another aspect of market research is connecting with venues and vendors in your local area. Venues can provide valuable information about their average booking rates, peak seasons, and the type of events they host. This information can help you tailor your services to meet the demands of your target market. Also, reach out to vendors to see if they have planner recommendations and insights. You can leverage these partnerships to establish your reputation in the community and increase your network.
Step 2: Write a Business Plan
You’ve gauged the market, the demand looks promising, and you’re ready to turn your event planning dream into a reality. Your next move? Crafting a detailed business plan. Think of this document as your roadmap, one that outlines everything from your revenue streams to your marketing strategies. But it’s more than just a checklist; it’s a reality check. With a well-thought-out business plan, you’ll project your income and expenses, enabling you to estimate whether this venture is truly feasible.
Related: How to write a business plan
Step 3: Source Funding
The next piece of the puzzle is gathering the funds needed to get started.
The most straightforward way to fund your business is through personal savings. Before you dip into your account, make sure to calculate all startup and operating expenses to see if your savings will cover them. If personal funds aren’t enough to get started, you will need to look for outside funding. Some of the most common sources for an event planning business include:
Loans from family and friends: People who are close to you and believe in your vision may be willing to lend you money at low or no interest to help get your business going. Be sure to put a formal agreement in place to avoid misunderstandings that could strain relationships.
Business credit cards: If you need to spread out some of your initial costs, a business credit card can come in handy. They’re easy to use and can help you build business credit. But be careful: the convenience comes at a price, often in the form of high interest rates. Always have a plan to pay off your balance as quickly as possible to minimize interest payments.
Small business loans and lines of credit: Traditional lenders like banks, as well as alternative lenders, offer various types of small business loans. These could range from term loans to SBA-guaranteed loans and business lines of credit.
Microloans: If you find that your funding needs are on the smaller side or if traditional credit options aren’t available to you, consider a microloan. These are smaller loans offered by economic development organizations. The bonus? Some microloan programs also offer business training, which can help you not just financially but also operationally.
Related: Finding the money to start a business
Step 4: Register the Business
Starting an event planning business involves taking care of several legal steps, including selecting a business structure, registering your business name, and acquiring the necessary licenses and permits. Here’s an overview to help you navigate through this section.
Choose a business structure: Before you register your business, you’ll need to decide on the type of business structure that best suits your needs. The four primary types are sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).
- Sole proprietorship: The advantage of this structure is the ease of startup and lower costs. You are the business, and it’s straightforward to set up. However, your personal assets could be at risk if the business incurs debt or is sued.
- General partnership: Similar to a sole proprietorship but involves two or more people. Each partner shares the profits, losses, and management of the business.
- Corporation: This structure provides protection if the business is sued, but is complex and costly to set up.
- Limited Liability Company (LLC): Combines features of both the corporation and sole proprietorship/partnership. It provides personal asset protection of a corporation, but is easier to administer.
For many event planning startups, an LLC tends to be a popular choice due to the mix of liability protection and operational flexibility. But state regulations can vary, so do your homework.
Related: Comparison of business structures
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.
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Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.
Related: Tips and ideas for naming an event planning business
During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.
Related: Finding a domain name for your business
Obtain business licenses and permits: Finally, you’ll need to procure any necessary business licenses and permits. The requirements vary by state, county, and city, and can include a general business license, zoning permits, or health department permits. If you’re hosting events, you may also need special event permits from the municipality where the event is being held, which are often required for large gatherings, outdoor events, or events that involve selling goods or services.
Related: What licenses does an event planning business need?
Step 5: Set Up Operations
Starting an event planning business takes more than a flair for throwing a great party. You also need to set up an efficient operational structure that helps you manage every detail, from the first client meeting to the wrap-up after the big event. Let’s walk through some key steps to get you up and running smoothly.
Finding the right space: Your work environment can set the tone for your productivity. Some planners opt for home offices to cut costs, but keep in mind that you’ll need a quiet space for phone calls and possibly even a dedicated area for client meetings. Renting an office or joining a coworking space are other routes you might consider, each with its own set of logistics and costs. The right choice often hinges on the types of events you’re planning and where your clients are located.
Equipment and supplies: Furnishing your workspace is the next step, but it’s just as important to have the right technology and supplies. From computers to projectors, think about what you’ll need to create presentations and communicate with clients and vendors. You’ll also need software tools to manage client data, handle invoicing, and facilitate payments. Various planning software exists to help keep track of all the details from a single platform, making your life much easier.
Vendor partnerships: Building strong relationships with vendors is key to running a successful event planning business. Research and connect with caterers, venues, rental companies, photographers, and other service providers in your area. These relationships can help ensure that you have reliable partners to deliver quality services to your clients.
Setting your prices: Last but not least, you’ll need to decide how you’ll charge for your services. Rates can vary based on experience, services provided, and regional norms. Whether it’s an hourly rate, a percentage of the event budget, or a flat fee, make sure your pricing structure is transparent and competitive, but also sustainable for your business.
Step 6: Create a Marketing Strategy
Marketing a new event planning business is both an exciting and challenging process. One of the first steps is to define what sets your business apart. In an industry that often has low barriers to entry, you’ll likely face stiff competition right out of the gate. That’s why it’s key to highlight your unique selling points. Maybe it’s your years of experience, a specialized focus like “eco-friendly events,” or an innovative service no one else offers.
The next phase is building a strong brand identity. Your name, logo, and website aren’t just cosmetic touches; they’re the first impression potential clients will have of your business. Also, having a visual and detailed portfolio can serve as a powerful tool in turning interested parties into loyal clients. So, invest the time and, if necessary, professional design services to get them right. Your marketing materials should reflect this brand identity and clearly convey your unique selling points.
Choosing the right marketing channels can feel like a gamble, but it doesn’t have to be. Think about where your potential clients are likely to spend their time. Is it Instagram, reading blogs, or at local networking events? Most businesses find that a mix of online and offline marketing works best. This can range from social media and email marketing to attending industry events and forming partnerships with other local businesses.
Speaking of partnerships, don’t underestimate the power of a strong professional network. Building good relationships with other event pros, like caterers, photographers, and florists, can lead to valuable referrals. You help them; they help you; everyone wins.
Step 7: Prepare to Launch!
Starting an event planning business requires tackling several steps, and while we’ve covered the big steps like market research, business plans, and marketing, there are some equally important yet smaller tasks to attend to before opening your doors. Every business will have different needs, but here are some of the final tasks to consider:
Business insurance: One of the foundational pieces to put in place is business insurance, especially general liability insurance. Accidents happen, and this coverage can protect you from financial losses.
Setting up bookkeeping: Implementing a solid bookkeeping system is vital for managing your finances. This includes tracking income, expenses, and managing invoices and payments. Whether you handle this yourself or hire an accountant, make sure you have a reliable system for tracking income, expenses, and taxes.
Staffing: Are you planning to be a one-person show, or will you need to bring on other planners, assistants, or administrative help? Make these decisions early so you can budget and plan accordingly.
Contracts: Legal protection should not be an afterthought. Whether you consult with a lawyer or find reliable templates online, make sure you have contracts for both clients and vendors to set clear terms and protect your interests.
Opening a business bank account: It’s important to separate personal and business finances. Open a dedicated bank account for all business-related transactions.
Joining industry associations: Membership in groups like Meeting Professionals International (MPI), the Event Planners Association, or the National Association for Catering and Events can offer advantages like networking opportunities and professional development resources. These associations often provide valuable industry insights and can be a great way to meet potential partners or clients.
Common Questions When Starting An Event Planning Business
How much does it cost to start an event planning business?
Starting an event planning service will typically cost between $2,000 to $6,000 when accounting for all initial expenses required to open for business.
Some of the key startup costs include:
Business registration fees and licenses: $0 to $500, depending on your state and local municipality requirements.
Equipment and supplies: Your basic setup will include a computer, printer, and phone, as well as possibly planning software. All told, you might be looking at anywhere from $1,000 to $3,000 initially. You’ll also need basics like furniture, which could cost another $500 or more.
Insurance: General liability insurance can cost between $400 and $600 annually for a small business, with initial payments often required upfront to start your coverage.
Marketing: You’ll need a website, business cards, and perhaps some initial online advertising to get the word out. Setting up a website could cost you as little as $200 if you do it yourself or up to $2,000 if you hire a professional. Business cards might run you around $50 for a decent batch. Initial marketing efforts, like a launch campaign on social media platforms, can cost another $300 or more.
Location costs: If you’re considering starting your own event business, it’s often recommended to start it out of your home rather than renting an office space. This approach can significantly cut down on overhead costs. However, if you choose to rent a workspace, you’ll need to account for the initial deposit, which can vary greatly depending on your location and the size of the space.
It’s also recommended to have three to six months of operating expenses available when first launching, which can mean raising $6,000 or more in additional capital.
How much can an event planning business owner make?
On average, event planners tend to charge a fee that is around 10-20% of the total event budget. So, for example, if an event costs $100,000, the planner may charge $10,000-$20,000.
According to industry statistics, the typical wedding in the US costs around $30,000. So, for a planner charging 15%, they would earn $4,500 for planning that wedding. If the planner organizes 25 weddings in a year at that rate, they would earn $112,500 in revenue.
Factoring in expenses like marketing, insurance, software fees, etc., of around $55,000 per year, the net profit for the event planning business would be approximately $57,500 for the year.
Keep in mind that these numbers are estimates and can vary. However, with proper pricing strategies and expense management, the potential for profit in event planning can be quite substantial.
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’s 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?
Resources:
Event Planners Trade Association & Club
National Association for Catering and Events
