DIFFERENT CHARGING PHILOSOPHIES:

• Percent of the total budget – some wedding planners charge 10% of the total cost of the wedding
• Fee based – Lump sum fee for example for $10,000 for planning an event
• Hourly Rate – Dangerous because neither party knows how much this is going to cost. What happens when you get to the client’s limit. It also take self discipline to keep track of your time.
• Commission Base – Where the planner receives a commission from vendors to use their product or venue. Always be open with the client when vendors are paying you a commission and offer a discount to the client for receiving that commission. For example:
• BBJ Linens provides an option to pay a commission when we bring an order to them
• Planner points or commissions from a hotel
• Consider asking vendors for an exclusive agreement that prevents your clients from booking direct with your vendors

DETERMINING A FEE:

If you have experience with a similar event, consider basing your fee on the number of hours it took to produce that event.

Think about what your hourly rate is. Base this on your experience level. The more experience you have, the more you can charge. People are paying you for your experience, your relationships with vendors etc. Your time becomes more valuable as you become more efficient and effective at planning.

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PRO TIPS:

Don’t charge a low amount this year thinking that next year you will be able to charge double or triple.

Don’t ever discount yourself. If the client needs to reduce your fee, then take away services but don’t just reduce your fee.

Limit how much you trade for services. This can be very risky and costly.

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PROPOSALS:

Sometimes it’s helpful to divide out fees for categories of services such as registration, planning and graphics. Then the client can choose which services they need you to provide.

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TURNKEY FEE:

Some event planners will take a lump sum for the entire event and upcharge for everything in exchange for assuming liability for all the expenses and contracts.

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CHARGING FOR DÉCOR:

Remember to upcharge for décor items you sell to a client. This covers your time to source and purchase an item for your client. It also covers for mistakes in ordering. We typically upcharge between 20-100%. Think about décor – is it a rental or are you creating it and selling it to the client? Are you keeping it for the client? Think about if you are agreeing to keep a décor item for a client and how you will charge them to store it. Plan for getting rid of items after an event. Consider donating décor to non-profits. If you buy décor items such as vases or easels, think about buying something that can be reused for other events.

Charging for limited expenses like travel, copies, samples:

These are part of the cost of doing business and are usually included in our fees. But you should make that clear in your contract if they are not included and how you will charge for them.

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MARKETING EXPENSES:

As a rule of thumb we try to spend about 5-10% of our fee on a meal, gift or treat for our client as a marketing expense.

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PAYMENT SCHEDULES:

We like to get at least a portion of our fee up front up on signing of an agreement.

Pay half up front and half the month of the event

Pay monthly – spreads out the fee more. We like this option a lot.

Pay quarterly

Pay 100% up front – this one is a little more risky as it is tempting to use this money before the event happens and could leave you short on cash when it’s time for the event.

Some clients will want to pay some or all the fee after the event. In this case we might recommend that to have the client put money in an escrow account to pay for fees at agreed upon planning milestones.

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BATMITZVAH:

Funny story…

Know who you are working with. Beware of scams. If someone wants to put a deposit on a credit card or wire you money – be wary. Be sure new clients are reputable and legitimate. Know who you are working with.

Send your questions to

todd@rumbledrum.com or joe@rumbledrum.com

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NEXT TIME…

How do we engage graphics and color in an event?

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