By Gwen Helbush, Where to Start Event Management
If there is one unwritten rule everyone in our wedding community adheres to that rule is no one talks about price. Why? My guess fear. They are afraid if they tell you their prices or how they derived them; you will judge or use the information against them.
It is not an entirely unwarranted fear, knowing what others charge can be a competitive advantage, it can also be a disaster. If you base your price on that of others rather than on your own business, you may put yourself out of business.
You need to establish your prices on YOUR business. What others charge is not relevant, unless you can guarantee their prices are made up of the same components as yours. Which is only possible if you know every expense, every cost they incurred for a client and everything about their business. Do you know that? Are they likely to tell you? Safe to say the answer to both questions is NO.
Fear is no way to run a business, talking about prices should not be taboo. I don’t see the point of avoiding speaking about something we all struggle with daily! The one thing every business in our wedding community and any other industry has in common, we all have to charge clients to make a living.
To paraphrase Star Trek, “I will boldly go where no has gone before.” I’m going to talk about how I price my services. Yes, that's right I said it- I'm going to tell you how I price my services!
I’m a wedding planner I have been in business for almost 27 years, not surprisingly my pricing structure has changed over the years. What and how I charge my clients has been a work in progress for every one of those 27 years. I’m going to talk about, my business specifically but the principles with some minor alterations can apply to any of your businesses. Now I’m not going to share actual dollar figures with you just the equations I use to get to the price. I like you, but I’m giving up all my secrets.
I charge a flat fee; my couples know up front what they are going to pay. I see what I'm going to make; we are all aware what they get for that price and what it will cost if they change the scope. I prefer a flat fee because I don’t have to spend non-billable hours creating reports and invoicing constantly. I’m not crazy; I know the services a couple starts out wanting are seldom what they end up needing I include a factor for that in the calculation. The following are the components I use to calculate my price.
What I collect from the client:
- Getting Ready
- Any after events
- Bridal party
Type of service they think they want
- Full wedding planning or some portion
Copies of any contracts for creative partners booked
- This tells me how much time I need to add or subtract based on who they have in place
Anything they will provide themselves
- Mom is making cupcakes, did they check if the caterer can allow outside food?
- Will my team need set up the cupcakes
- They want to make the escort cards, but they don't know how so I may need to help
- Will my team need to sort and display
My evaluation of the client
- Will they be needy or business-like or some combination
The couple's "not to exceed" dollar amount
- Not what they want to spend (their budget) the actual amount they have to spend
- It takes a little work, but you can get it if you ask the right questions!
What I need to know about my business:
What will it cost to provide what the couple is asking us to do?
- My time
My costs of doing business (overhead)
- Cost of my office, utilities, mileage on my car, gas, computers, office supplies, etc.
How much staff will I need to provide the quality of service?
- What the couple is asking us to do?
- Staff time
You should have numbers for your business if you don’t, get busy! I can’t tell you what your numbers will be as they differ for every business; some people are very good at keeping their overhead lean others not so much. But you will need to know all of that to ensure you're charging the right amount.
If you have been in business for a while, you have the data needed to find these figures. Hopefully in an accounting system like (QuickBooks or something like it) or maybe you use a shoe box however you collect expense data that is what you need to calculate overhead costs. Once you have your overhead estimate, then you need the number of projects you want to do in a year or if you have the data the average number you did over the past three years, then divide your overhead costs by that figure. You now have the overhead number for your calculation. Because overhead costs can and often do change, I suggest revisiting this number at least once a year to confirm it is accurate.
Alright, we have the prospective client data, we have the cost of providing services, we know how much staff time we need, and the cost of staff and we have calculated how many planners billable hours are necessary to provide the service the couple has requested, now add it up.
Part One: Planner Time + Staff Time + Overhead = Base price
Part Two: Base price + specific client needs (i.e., travel, parking, etc. anything unique to them not in your overhead) = Price
That’s it. Nothing very complicated, just a little basic math! I’ve helped many other planners over the years calculate their price- they all either skip or under estimate their overhead and staff costs. Not properly calculating overhead costs is the reason most are not making as much money as they think they should!
Far too many in our wedding community use “interns/apprentices/volunteers,” i.e., family and friends rather than paid staff, this in my humble opinion is a rookie move. If people are working for you (whether they want to accept payment or not), they should be paid. The cost of staff must have a place in your fee; you are not doing yourself or our wedding community any favors by not charging for all the labor required to produce a wedding. You can include staff in your overhead costs or as a line item in your equation. Either way, the cost of staff MUST be included.
I don’t show the equations that make up the price to my couples they get a scope of work and the price. I’m not hiding anything from them; I am an independent contractor they are paying me to do a project, HOW I do that project is not their concern. I’m not obligated to tell them how many assistants I’ll have on wedding day or what each will do, what I pay them or how I write my timelines. If I did, I stop being an independent contractor and start being an employee and nobody wants that.
Over the years I have found if you itemize or share too much, you end up wasting time negotiated how you run your business and jeopardize the quality of the work you do. I’m very clear about what they can expect for what they pay. That is after all, what a scope of work is. How I accomplish that scope of work is solely up to me.
I hope this helps anyone struggling with pricing; I also hope you will join me in having a meaningful conversation about price rather than avoiding it as if it's a dirty word!