How To Start a Party Planning Business?

What is a Party Planning Business?

A party planning business is about organizing an entire party and event according to the client’s requirements and expectations. This business includes organizing corporate and social parties.

The services in the party planning business are the following:

• Research conduct regarding the event
• Finding an appropriate site for the party
• Creating a specific event design and theme
• Arranging catering, entertainment, food, and refreshments
• Sending invitations
• Site supervision
• Coordinating the personnel’s activities at the event
• Event evaluation

Apart from these services, there are plenty of others that vary according to the kind of party planning business you want to start.

Why Start a Party Planning Business?

A party planning business is one of those ventures that does not require a high start-up cost. You can start even with a small investment. Moreover, this business requires good communication, management, and people skills; if you have these, then you can get your business off the ground.

What’s more, it is one of those businesses that are most in demand. It has the potential for growth in the coming years. According to Allied Market Research, the event industry size is expected to reach $1,552.9 billion by 2028, registering a CAGR of 11.2% from 2021 to 2028. These statistics are convincing enough to kick-start this business.

Furthermore, for the start-up of this new venture, you do not need a proper office setup. You can kick-start your business right at your home. If you have prior management experience, it will give you the edge of working with efficiency right from your comfort zone.

Party Planning Business Market Analysis

Global market size: $3.2bn

Projected Annual Growth Rate: 4%

Average Party Planning Permits processing in the USA: 45-50 days

Key Players in Party Planning Business Market: Access Destination Services, BCD GROUP (BCD MEETINGS & EVENTS), ATPI Ltd., Riviera Events, Entertaining Asia, Live Nation Worldwide Inc., StubHub, Anschutz Entertainment Group, Pollstar, Cvent Inc., Capita Plc., Reed Exhibitions, Questex LLC, Outback Concerts, The Freeman Company, Penguins Limited, CL Events, Seven Events Ltd., Clarion Events Ltd, and Versatile Event Management.

Source: IBIS World, License Application Requirements, Allied Market Research

Party Planning Start-Up Analysis:

 

Production equipment	$600 to $2200
Insurance and legal fees	$50 to $500
Permits and licenses for the business	$50 to $700
Business Software	$5 to $100
Small business insurance	$500 to $2000
Supplies	laptop ($1500), cellular service ($600), business cards ($400), Printer ($300), Wifi ($100)

Disclaimer: These costs may vary depending on location, competition, supplies, sources, market share & your personal decisions, but they do offer a good idea of what you will spend to start. Our Data are purely informational and should not be taken as legal or financial advice.

Start a Party Planning Business in these 11 steps

1. Creating a Party Planning Business Plan
2. Legalize Your Party Planning Business
3. Setup Your Party Planning business for Taxes
4. Setting Up Your Party Planning Business Bank Account & Exploring Funding for Your Business
5. Party Planning Business Accounting & Invoicing Setup
6. Acquire the necessary permits & licenses for your Party Planning business
7. Get Required Party Planning Business Insurance
8. Grow your Party Planning Business brand: Helpful Tips
9. Create An Online Party Planning Business Presence
10. Getting Leads & Calls for Your Party Planning Business
11. Get to know Your Party Planning Business, Research local competition

Step 1. Creating a Party Planning Business Plan

The most important step in starting a new venture is creating a business plan. The party planning business greatly banks on crafting a perfect business plan. A clear plan maps out the unknown facts which determine the success of the business. Moreover, to ensure the long-term and short-term success of the business, you will need a business plan.

A business plan, in particular, is a strategic tool that highlights all the facts and figures you will need to run a smooth business. It also helps to determine the financial cost of a start-up. This way the process of getting funding for the startup will be smooth and quick.

Above all, it is also essential to grab the investors’ attention. Through a properly crafted business plan, the investor will get insight into your business and would like to invest. It also set a professional image of the business.

Furthermore, it shapes the future and identifies the weakness and potential of a business. It also specifies the mission statement of the business. Moreover, if you overlook the importance of creating a business plan; you are certainly planning to fail the business.

Essentials of what a Party Planning business plan contains are:

• Executive summary of the overall business
• General description of the company
• Introduction
• Organizational structure
• Market research and competitor analysis
• Description of your products or services
• How you plan to market and sell your products
• Financial projections and funding plans
• Sales & Marketing Strategies
• Roadmap for your business
• Projected growth based on your business plan
• Appendix

What Are the Costs involved in opening a Party Planning business?

The startup cost of a party planning business depends on the size and scale of the business. If you are planning to start a small-scale party planning business from your home, which will target a specific niche then the startup cost will be low. If you are planning to start a large-scale business then the startup cost will be high.

The average startup cost is $8,050 and the maximum cost is $31,100. The estimated cost breakdown is following:

• Rent $0 – $2,300
• Equipment $5,000 – $17,000
• Inventory $0 -$500
• Licenses and Taxes $250 – $350
• Communications $100 – $250
• Payroll $0 – $4,000
• Advertising $500 – $2,000
• Legal Fees & Accounting $650 – $1,500
• Insurance $800 – $1,700
• Miscellaneous  $750 – $1,500

Common Party Planning Supplies Required:

• Pen
• Paper
• Sticky notes
• Folders

The cost for these supplies ranges from $100 – $200.

Equipment Needed for Your Party Planning Business

• Cellphone and cellular service $600 – $1200
• Laptop $1500 – $1200
• Wi-Fi $100 – $400
• Car $25,000 – $35000
• Printer $300 – $1000
• Furniture and decor $100 – $3000
• First-aid kit $25
• Extension cords and floor cords cover $200

Other required costs:

Insurance

The average insurance cost for general liability is $500 to $1100 per year.

Permits

For starting the party planning business, you will need several permits which include the following:

• Noise Permit $338
• Alcohol License $300
• Firework Permit $35
• Building Permit $50 – $300

Web design

Web design can cost you around $500 to $5000 depending on your need for a quality website. You can also seek the aid of various online calculators, like Web Fx and Squarespace, to check the cost of web designing.

What are ongoing expenses for a Party Planning Business?

• Rent and facilities: If you plan to start the business from the office and you do not have your own space, then you will need to rent one. This is an ongoing expense that will keep popping up every month. Starting the business from your home will save this ongoing expense.
• Utilities: It is another ongoing expense that includes electricity, water, and heat. Regardless of your profit and loss in the business, you will have to cope with this operating expense.
• Salaries: You will require to hire employers either part-time or full-time. They will get paid for their services. Salaries are also an ongoing cost of running your business.
• Equipment Maintenance: Another ongoing cost that may show up every week or month is equipment maintenance. As they are liable for defects and damage. You will need to keep maintaining them to not compromise on your quality services.
• Supplies and Equipment: All businesses, regardless of size, require equipment and supplies to carry out product creation and service delivery. As the supplies and equipment are not one-time purchases. You will need to keep replacing and updating them as per your need.
• Fixtures: These include things such as signage, paneling, table stands, lighting, and storage cabinets.
• Legal Compliance: One of the costs of starting a business is the registration of the business as a legal entity with the relevant tax and business regulatory agencies of the local council, state, or country where you intend to operate.
• Marketing and Promotion: A significant portion of your operating costs will go toward service marketing and promotion if you want to grow your business.

Who is the target market?

To start any business, you will need to identify the target market. In the party planning business, there are two target markets, corporate and social events. Charities and non-profit organizations are listed alongside businesses in the corporate. The charities and non-profit organizations held events for fundraising. The companies host holiday parties, business meetings, dinners, and conventions. You can either target the whole corporate or choose one event out of these.

The social events include wedding events, birthday parties, anniversary events, reunions, and so on. Social events particularly weddings, birthdays, and anniversaries have a huge scope for generating greater revenue. You can target either all of these or one. However, if you want to start a small-scale party planning business, it will be better to target one event at first.

The knowledge of the target market will help you understand the business and will point out the weaknesses of your competitors and what potential you can add to your business plan. Certainly, market research will help you to figure out how your competitors are running the business. You will also learn about their target audience and their ways to meet and exceed the clients’ satisfaction.

How does a party planning business make money?

A party planning business makes money by organizing events for clients. You will get paid for the services you will provide in arranging the whole event. The services that you will have to provide are the following:

• Arranging décor according to theme
• Organizing catering, live DJ, food, and refreshments
• Finding the perfect location for the event
• Sending invitations
• Event coordination on that day
• Follow-up activities include returning rented items and paying the vendors

How much can you charge customers?

The charges of the event greatly vary as per the size of the event. So, how much can you charge customers depends on the event you are organizing. You cannot start with low charges as you will have to cover the overhead expenses and earn sufficient profit. The event planners charge an hourly rate to the clients. The average event planner charges around 15-20% of the total event cost as his fee.

According to the industry expert Patty Sachs, a social event planner earns $12 to $75, plus vendor commissions. The corporate event planner charges an hourly rate of $16 to $150, plus vendor commissions.

Moreover, you can determine the prices by setting your ideal salary goals. For example, average event planners work 50 to 60 hours a week. If you want to earn $50,000 a year then you can calculate your charges in the following way:

Ideal salary = $50,000

Total hours = 50 weeks x 60 hours = 3000 hours

50000/3000 = $16

One way to determine how much to charge for your clients is to do a cost analysis. A cost analysis considers all the costs associated with making and selling a product or service. This includes things like the cost of materials, labor, overhead, shipping, and marketing. Once you have all this information, you can determine what your price should be to make a profit.

You will not like to overcharge your customers. The cost analysis will make sure you charge sufficiently to not overlook the overhead expenses. Most importantly, you can also get an idea about charging by finding out what your competitors are charging the customers.

How much profit can a party planning business make?

The profit margin of the party planning business particularly depends on the size and the location of the business. An average hourly rate of a social event planner is around $17 to $24. The average hourly rate of a corporate planner is $34. According to builtin, the average salary of an event planner is $62,085.

How can you make your party planning business more profitable?

You can make more profit in your party planning business by

• Expanding your customer base. You can expand it by offering a free newsletter and asking for opinions from the customers.
• Keeping up and maintaining excellent customer support service
• Keeping your website content fresh
• Promoting your business on social media networks
• Collaborating with other businesses
• Identifying the new opportunities that will show your innovative ideas
• Seeking referrals, which include sending emails, addressing the name of clients
• Asking clients about their contact information; add them to your list for sending messages to keep them updated about your products
• Launching a user-friendly website for your business
• Adding a variety of quality services to your business

What Will you name your business?

A business name is important for creating a massive influence on customers and other businesses. Most importantly, it depicts the essence and creation of the new venture. The business name gives recognition to the business in the marketplace. Moreover, one cannot overlook the need for branding. The fact that your business name will appear on all of your billboards and signage makes it a branding tool.

An easy and catchy name will also aid to boost sales of your service. Considering the fact that people will remember your business name and spread the word about their positive experiences with your high-quality service shows the necessity of a business name. Only a strong name gives the business a prestigious place in the industry and helps to achieve all the milestones.

Step 2. Legalize Your Party Planning Business

Another important step for the success of your business is to introduce it as a business entity. It gives the professional image of the venture in the marketplace. Moreover, introducing your party planning venture as a business entity can ensure your protection from liabilities. Various business structures ensure to keep business and personal assets aside.

Nearly every aspect of how a business operates is affected by the type of business entity a person chooses, so those who are considering starting a business should carefully consider all of their options.

Depending on the profit, size, and expenses of the business, a suitable business entity can help with tax savings.

Following are the four business structures that you can choose to introduce your new venture as a business entity.

• Sole Proprietorship
• Partnership
• Corporation
• S Corporation
• Limited Liability Company

Step 3. Setup Your party planning business for Taxes

The next important step in starting a new business is to set up the venture for taxes. For the smooth operation of your party planning business, you will need to register it for certain state and federal taxes. For the tax registration process, you will need EIN. You would not like to use your social security number for business. As it is also liable for identity theft.

An Employment Identification Number (EIN) is a tax ID that the owner needs while filing for taxes. It keeps the track of business finances and separates them from personal expenses. Also, it makes the tax payment a lot easier by separating the business and personal taxes. For opening a business bank account, it is also needed.

In order to get an EIN, you need to determine your eligibility which includes that your business should be based in the U.S or its territories. Also, you must have a valid taxpayer identification number such as a social security number.

The simplest way to apply for your EIN is online via the IRS EIN Assistant. If you want to apply and get further information, click here.

Step 4. Setting Up Your party planning business Bank Account & Exploring Funding for Your Business

Another necessary step is setting up your business bank account for a new venture. It is not wise to use your personal bank account for business purposes. If you use your personal bank account you put your personal assets at risk in the event that your business is sued.

Moreover, a business bank account provides payroll services that make the employees’ payment process simple. It also delivers a professional image to the customers. It makes tax filing smooth and keep the track of your business finances.

Along with the business bank account, another important entity that you will need is a business credit card. A business credit card has a larger credit limit than a personal credit card. You can purchase the items you will need for your party planning business even if you run out of cash. What’s more, it is more convenient to use than having cash and a checkbook. Thus, a business credit card ensures financial flexibility.

Besides, business credit cards give cash back or points in their reward programs. You will earn points for rewards each time you use the card.

Most Common Types of Funding to start Your Party Planning Business

Step 5. Party Planning Business Accounting & Invoicing Setup

Accounting and invoicing setup is another important step for your party planning business. It is crucial to keep the track of finances and figure out the performance of your business. If you keep an accurate record of your business’s finances, you’ll be ready for tax returns. You can manage and cut unnecessary spending once you have a complete view of your business’s financial records.

For accounting, you will not like to use the pen-and-paper technique. As the world is shifting to digital solutions, you can also use one. You can seek the aid of software that will reduce your manual effort in accounting. The recommended software is QuickBooks.

The software can be explicitly used to automatically control your business expenses and produce reports of your business’s financial records. It also keeps a record of every transaction you make. It is a very simple and effective way to assess the progress and state of your business.

Invoicing builds trust, reduces conflicts, and delivers a professional image of the business to the clients. Moreover, it also keeps you focused on your business expenses.

Step 6. Acquire the necessary permits & licenses for your party planning business

State & Local Business Licensing Requirements:

Step 7. Get Required Party Planning Business Insurance

Business insurance is another important step that helps cover the costs associated with liability and property damage claims. For the sake of your safety, the safety of your business, your employees, and your clients, it is absolutely necessary.

There are many types of business insurance policies available. So, it is crucial to speak with an insurance agent to determine which kind of coverage is right for your business.

Some common types of business insurance include:

• general liability insurance
• product liability insurance
• property damage insurance
• business interruption insurance
• worker’s compensation insurance

Get a Free Quote Here

Step 8. Grow your party planning Business brand

The growth of the business is necessary to generate significant revenue. The minimum recognition of your party planning business will not help you to compete in the industry. Similarly, it will also not create a steady customer base.

So, for the success of your business, you will need to grow. Moreover, in the business sector, there is always room for expansion. By following the right strategies and planning, you will be able to get your business off the ground. You’ll find the following tips and suggestions helpful to do so.

How To Promote Your party planning business?

• You can promote your party planning business by employing a marketing strategy. It is an effective way to grow your business.
• You can use signage and billboards to attract the attention of potential customers.
• Paid advertisement is also an effective way to gain customers’ attention.
• A well-defined website will help your customer to understand your services and it will also reduce your and your client’s time in describing the services you offer.
• Business cards and flyers with your contact information help in the business expansion. You can distribute them around the block.
• Also, you can create a social media presence for greater reach.
• Make sure to offer customer satisfaction with your quality services.
• At the start of your business, you can offer some discounts to your new customers.
• What’s more, do not forget the target the right audience and hire well-trained professional staff for their service.

How To Retain Your party planning business clients

• To retain your customers, you must provide them with the best possible services.
• Follow the client’s instructions and suggestions regarding the event.
• Do not overlook the minimal details the client provides.
• Work within the client’s budget. Do not exceed.
• Employ professional behavior and be punctual.
• Ask for the clients’ reviews on your website. You can also ask them to refer your services to their social circle.

Step 9. Create An Online party planning Business Presence

In the 21^st century, one cannot overlook the importance of online presence. You will certainly like to introduce your party planning business in the online world. For this purpose, you can create an online presence through a website.

A website gives credibility and a sense of professionalism to your business. It provides a wider reach for your business. An SEO and user-friendly website ensure you stand out in the online marketplace. Furthermore, approximately, all legitimate businesses either small or big prefer to have a website.

For creating a website, you need to choose web hosting. Web hosting act as storage that stores business data like profiles, files, and images. The recommended web hosting is  BlueHost. It has remarkable features which provide the customer support base 24/7. Kudos to its responsive customer service, high uptime, and cost-effective beginner plans make Bluehost a trustworthy web hosting provider.

Create a social media account

Social media plays an integral role in business. On average, social media users spend 2 hours and 25 minutes every day. You can utilize these 2 hours to leave an impression of your business on potential users. You can create an account on Facebook, Instagram, LinkedIn, Pinterest, and Twitter. Moreover, you can link these accounts to your business website. Not to mention, people may have easier access and a better understanding of the services you offer.

Create YouTube channel

Video marketing is another essential tool for a stronger online presence. You can use YouTube for video marketing purposes. Moreover, YouTube provides the opportunity for a small business owners to promote their services and products. As this medium has over 2 billion users, results in 30 million visits per day.

As per the reports, only 9% of the United State small business users use YouTube for their business promotion. It signifies that you have a chance to yield and generate significant revenue.

Get Online reviews

Online reviews are important for the business to grow. Customers prefer to read online reviews regarding the products or services of their interest before making a decision. Your positive feedback and a five-star rating on your website and social media handles will let your clients trust your services.

Besides, use Yelp and Google for listing and get online reviews there. Clients will be more likely to trust your products as a result.

Step 10. Getting Leads & Calls For Your Party Planning Business

Another important step to getting leads and calls for your party planning business is by adding contact information on your website and creating a business email account. Additionally, you can get leads and calls by adding your contact information in listings, online, and local directories.

Business Cards: Create business cards because it crafts the first impression of your business on the customer. It also serves as an official representative for your business. It provides crucial contact details like name, title, email, website, address, and phone number.

Flyers: Create flyers to get leads for your business. They help small businesses attract more customers.  With the aid of flyers, you can establish a favorable first impression, strike up a conversation with fresh prospects, and inform potential clients of your products and services. They pass your contact information to the customers which might like to stay in touch with you. They can increase sales by 1.25%, according to studies.

Word of mouth: Word of mouth is a free marketing tool that helps to get leads in your business by 23%. Word-of-mouth generates $6 trillion in annual global spending on average and accounts for 13% of all sales.  You can also get leads by word of mouth if you will provide an impressive first experience and quality services to the customer.

Network: Network with other companies or people to get more leads. For your party planning business, you can network with catering services, photographers, and other event planners.

Separate Your Business Phone from your Personal Phone

When you first start your business, you may want to share your personal phone number on your website or with customers. But as the calls keep coming in, you’ll start to feel stressed and burdened. Also, it doesn’t sound professional to provide your personal phone number. It intrudes on your privacy and personal space.

A separate business phone, particularly,  with a variety of features is a convenient way to stay in touch with your customers and suppliers. You cannot use your personal phone to access business phone features for your business’s growth.

Virtual phone numbers are changing the way businesses are conducted. It has the same outlook but additional benefits. You can use a virtual phone to receive and make calls on your mobile phone, desktop app, or desk phone via the cloud and the internet. Due to the setup it offers, all business phones ring at once, it gives users the leverage of not missing calls.

Step 11. Get to know Your party planning Business, Research local competition

Education on Your Party planning Business is key, learn the market and trends

Market research is the key to success in your party planning business. Through market research, you will be able to know about the local competition. Being an event planner,  specifically, you will organize a whole party on the base of your research.

Industry trends highlight the change in shift and dynamics as per the client’s perspective. For example, local trends determine what kind of theme is in demand for birthday parties. As can be seen, most people like to have a character-based birthday party theme.

Thus, your proper market research and knowledge of local trends will ensure your long-term success and smooth operation of the business.

Getting to know your local area and competitors

Understanding your local area and competitors helps you make better decisions about how to run your business. Indeed, the knowledge of your local area will identify the market saturation. Knowing the competitors and local area will help you decide which services to offer in your business.

Network with other Businesses

For the long-term success and expansion of your venture, you will need to network with other businesses. As a result, it ensures to provide more services and get more investors and business partners.

Seasonal Vs Year Long Business- What’s Right for Your party planning Business?

In general, events and parties last the entire year. It depends on you if you want to start this business as a side hustle or a full-time one. The party planning business works both ways.

Is Starting a Party Planning Business Right for You?

Starting a party planning business is absolutely right for you if you have the potential management and communication skills. Furthermore, it is one of those businesses which provides the opportunity to start as a side hustle. What’s more, people are always in need of an event planner to organize their events. It shows the business has the potential to grow further.

Moreover, you can start this business right from your home with a little investment. For the smooth operation of the business, you will need room to turn it into an office for meetings with the client. If you do not have the extra space at your home, you can arrange meetings with your client at restaurants or coffee shops as well. So, the flexibility this business provides makes it the right choice for your startup.

Tips for Your party planning Business Success

Always stay on top of your Business and do not lose focus because the party planning business only prospers if you are willing to give your innovative ideas and up-to-date services to the customers.

Finding a niche market in your party planning business is necessary to grab the customers’ attention. Furthermore, this business has a vast variety of niche markets that you cannot introduce at the beginning of your startup at once. When your business becomes sufficiently established, you will be able to focus on various niches.

Learn to Delegate because you’ll initially think you’re capable of managing and running the business efficiently but as it will grow, you will feel insufficient. Ultimately, you will need someone’s assistance to control your business setup. So, for your own sanity and the growth of the business, you will have to learn to trust, value and consider others’ help.

Be patient because if you are planning to run even a small-scale business it will take time to establish and leave its recognition mark in the market. Eventually, with your patience, you will be able to earn the desired output from your business.

Frequently Asked Party Planning Business Questions

1. What skills does an event planner have?

• Communication
• Multitasking
• Leadership
• Problem-solving
• Management
• Creativity

2. What challenges might a party planning business present?

• You will have to be flexible
• Might have to work 72 hours or more to get things done
• Must be physically and mentally fit to run the event smoothly
• You may have to stay away from your home to organize the event

3. Does the party planning business need experience and a professional degree for a startup?

A well-paying client prefers to assign the event to someone who has some experience and a professional degree.           So, both of these are necessary to get your business off the ground.

4. How much does a degree in event management cost?

Bachelor’s degree cost $28,380- $40,350 and master’s cost $57,916- $28,644.

5. What are the various party planning professions available?

• Venue Manager
• Wedding Planner
• Catering Services Manager
• Social Media Event Coordinator

6. Does a party planning business an area-specific business?

You can provide the services in other cities as well.

7. Does the party planning business need a team on the startup?

If you are planning to start a small-scale business then you will not need a team. But for the expansion of the business, you need to hire employees.