By Jennifer Taylor, Taylor’d Events Group
“Every second counts.”
If you’re a wedding business owner, you surely understand and agree with this saying. It’s true – every second really does count when you’re balancing client appointments, design schemes, and day-to- day admin work.
This is why it’s so essential to ensure that you’re pricing your work accurately and being compensated for the time and effort you put into your services.
There are a number of ways to build a pricing structure, but keep in mind that it’s different for every company so you’ll need to think carefully about what method works best for you. Let’s take a look at some of the options.
#1 – Percentages
When charging percentages, you choose a certain percentage of the client’s budget as your fee. For example, if they estimate a $50,000 budget and you charge a 10% rate, your total fee will be $5,000.
This can be a good starting place for new wedding planners, but be cautious about clients that change their budgets midway through the process. Be sure to have a policy on your contract that requires fee adjustment if there is a change in budget.
#2 – Commission
This is not as popular of an approach, but it’s worth outlining. Commission is essentially when you get paid through the vendors you hire.
Take a look at your competition and see if they’re using this structure. Otherwise, I’d recommend staying away from it.
#3 – Hourly
Charging hourly can make sense in some situations, but it will require a bit of math.
Here’s a formula that can help you determine your rate:
(Amount you want to net annually) / 50 weeks / 5 days per week X 2.5 (factoring in expenses) = per diem / 8 hours = your hourly rate
If, for example, you want to make $50,000, you’d have to charge $62.50 per hour.
However, in the events industry, we don’t work typical eight-hour workdays for five days a week – so it may not make sense to charge hourly unless you have a strict time management tool in place to break down billable time per client.
#4 – Packages/Flat Rates
This is how most planners charge as it’s a simple solution for both clients and vendors.
In order to determine the best package rates for your business, tally up every hour spent on a test client and use the total as an idea of how much time each client needs.
This includes face-to- face meetings, office work, and hours spent onsite for the rehearsal and event day.
Using your hourly rate from above, determine an estimate for a typical event and use that for your package pricing. Keep in mind that the Small Business Administration lists the average hourly rate for the service industry is between $25 and $125.
#5 – Negotiations
Chances are that some clients will want to negotiate rates. My word of wisdom is to never shortchange yourself.
Keep in mind the sacrifices that you make to help these couples have the best day of their lives. Ask yourself – will you be missing important weekends? Holidays? Birthdays?
It’s understandable if you have to miss something, but charge accordingly – otherwise, you may begin to resent them from taking you away while not paying you enough to compensate.
If you are willing to negotiate, try including add-ons and offering them a bit more for the initial cost instead of reducing your fee. Make it small so you’re not overworked, but stay away from devaluing a package that you already determined was worth your time.
Pricing is an essential component of your overall business structure and can determine your company’s future successes, so avoid making up prices that seem reasonable. Put some effort into it and determine an educated system that will make your time worthwhile.
How do you determine your pricing?
Jennifer Taylor is the owner of Taylor’d Events Group, a planning firm that specializes in celebrations of all kinds in the Pacific Northwest and Maui. She is also the creator of The Tailored Plan, a self-administered class for wedding planners to grow and improve upon their skills.