Fee Structure for Event Planners
You should know how to charge for services if you’re launching an event planning business for social gatherings, corporate events, or a combination of the two. Your rate is determined by a number of criteria, including event preparation and operating expenditures, salaries, and profits. Rates differ depending on where you do business, the types of projects you take on, and what the market is ready to pay.
Fee Structures Used by Event Planners
If you wish to start a part-time or full-time business, you can structure your event charge and estimate your rates to your clients in one of five ways:
- Fee for a single project
- Expense percentage
- Hourly pay
- Expense percentage plus hourly rate
- Rates of commission
- For the purposes of the following explanations and examples, pretend you intend to charge $75 per hour for your services.
- Fees for a Flat Project Rate
- Many clients prefer to know the total cost of a job, including all costs.
Flat project fees are commonly used for packaged events, such as those seen in sports marketing programmes, and can be set on a per-person basis with numerous requirements and limitations. In this case, the client may directly contract with the event planner to arrange all logistics, food, venue, and accommodation charges, and so on. Assume you’ve been hired to organise a one-day historic city trip for 15 people. Your client would like you to offer a fixed charge for transportation, a private tour, lunch, and any/all venue admission fees. They do, however, request a high-level breakdown of each spending category.
To provide this service as an event planner, you must establish a flat price by calculating the whole cost of the project. You must negotiate and assess the cost of all services, including your time, and provide a complete expense estimate.
This places the duty of budget management squarely on your shoulders and necessitates planning for a number of situations in which circumstances may change. It is your obligation and risk to identify mandatory deposits, pay for all services, and hold all service agreements accountable.
Fees Determined by a Percentage of Expenses
Event planners should typically charge between 15-20% of the entire cost of an event as part of their fee. Depending on the program’s complexity and the length of time required to plan and execute an event, this may be sufficient to cover a planner’s whole cost and source of profit.
Assume you are hired to organise a special dinner at an exclusive restaurant for 40 people at a cost of $175 per person. Let’s say you spend 15 hours meeting with your customer, planning, attending, and following up on this event. If you charge 18% of total expenses, you will make somewhat more than your desired hourly rate of $75/hour.
Fees are calculated on an hourly basis.
Some clients prefer that the event planner quote an hourly rate and estimate the total number of hours required to oversee and execute a specified client programme. It may appear comparable to a flat project rate, but it allows for greater flexibility on both sides to respond to adjustments that may be required along the route.
Many commercial event planners charge by the hour. It enables a client to calculate a fair budget after learning how much it will cost to engage your services. Frequently, this is done because the client wishes to better manage any unforeseen expenses. Always remember to set clear expectations so that all parties are on the same page about what services will be offered. You should include a reference to billing for all reasonable business expenses that may be incurred as an event planner. Some event planners may mark up running charges like shipping, car rentals, and other ancillary expenses by up to 20%. If you do, you should disclose such markups and receive advance approval from your client. When determining hourly event planning charges, it is also critical to consider how frequently you may bill for your time. Assume, for example, that a client hires you in October to organise a one-day seminar in March. Your services are being hired to find and negotiate for the venue, catering services, A/V, and to contribute to the creation of content for a limited number of communications items (i.e., invitations, agenda, evaluation forms, etc.).
Your client has also requested that you provide on-site management. You agree ahead of time to bill for certain services at different times and to provide bills for all services performed to date on a weekly, bimonthly, or monthly basis.
Under this agreement, you and your client should jointly create a thorough statement of work outlining both sides’ expected responsibilities. Then you can calculate a complete budget consisting of so many hours plus reasonable expenses (be clear on what those details may include). Fees Determined by a Percentage of Expenses Plus Flat Fee vs. Hourly Rate When you’re engaged to organise an event, the customer may choose a cost based on a percentage of expenses for whatever reason. However, this is insufficient to pay the overall cost of your time and services. In these cases, it is fair to present your fees in two different categories at a combined cost. For example, suppose a client hires you to organise conference-related events. Your task is to plan two private dinners and a golf outing for 50 people each. The entire cost of these events is around $20,000, but it takes roughly 60 hours of your work, and the complexity of this project may warrant a greater profit margin. Keeping this in mind, you can calculate your final flat price and hourly rate using the following formula: