Starting a party planning business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful party planning business.
Importantly, a critical step in starting a party planning business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Party Planning Business:
- Choose the Name for Your Party Planning Business
- Develop Your Party Planning Business Plan
- Choose the Legal Structure for Your Party Planning Business
- Secure Startup Funding for Your Party Planning Business (If Needed)
- Secure a Location for Your Business
- Register Your Party Planning Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Party Planning Business
- Buy or Lease the Right Party Planning Business Equipment
- Develop Your Party Planning Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Party Planning Business
- Open for Business
1. Choose the Name for Your Party Planning Business
The first step to starting a party planning business is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your own business:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your party planning business.
2. Develop Your Party Planning Business Plan
One of the most important steps in starting a party planning business is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your party planning business.
- Company Overview – this section tells the reader about the history of your party planning business and what type of event planning business you operate. For example, are you an event planner, catering company, or an event venue?
- Industry Analysis – here you will document key information about the party planning industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target market are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract prospective clients to your party planning business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your party planning business make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Party Planning Business
Next you need to choose a legal business structure for your own event planning business and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the owner of the event business and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a party planning business together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a party planning business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a party planning business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your party planning business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Party Planning Business (If Needed)
In developing your party planning business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a party planning business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a party planning business that they believe has high potential for growth.
5. Secure a Location for Your Business
When starting an event planning company, the first thing you need to do is find a location. You’ll want to find a space that’s big enough to accommodate your business operations and client meetings. It’s also important to find a location that’s affordable and accessible. You may want to start by looking for an office space or commercial property for rent in your desired area.
6. Register Your Party Planning Business with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your party planning business’ name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your party planning business to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
The licenses and permits you will need to start an event management company will vary depending on your location. You may need a business license, a food license, a vendor’s license, and a special event permit. You should contact your local licensing agency or municipality to find out what specific licenses and permits you will need.
10. Get Business Insurance for Your Party Planning Business
There are a few types of insurance that you will need to operate a party planning business.
Some business insurance policies you should consider include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Auto insurance: If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Party Planning Business Equipment
To start a party planning business, you will need some essential equipment. You’ll need some basic office supplies, including a computer, pens, paper, and folders. You may also need office furniture such as a desk or table, chairs, a printer, a fax machine, and a phone to communicate with potential clients. Additionally, you may need a vehicle to transport supplies and equipment to your events.
12. Develop Your Party Planning Business Marketing Materials
Marketing materials will be required to attract and retain customers to your party planning business.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your party planning business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional party planning business website provides potential customers with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media platforms will help customers and others find and interact with your party planning business.
13. Purchase and Setup the Software Needed to Run Your Party Planning Business
In order to start a party planning business, you will need accounting software, event management software, and a website. You may also want to invest in software that can help you create invitations, manage guest lists, and keep track of payments.
There are a number of different software options available, so you should be able to find one that meets your needs.
14. Open for Business
You are now ready to open your party planning business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start a Party Planning Business FAQs
Is it hard to start a party planning business?
No, it is not hard to start a party planning business. The most important thing to do is make sure you have a clear business plan and a good marketing strategy. You also need to be organized and have a lot of energy, because party planning can be hard work.
How can I start a party planning business with no experience?
There are a few things you can do to get started in party planning without any experience. First, you can read online resources about party planning to get a basic understanding of the process. You can also join online communities or forums related to party planning to learn from others who have more experience. Finally, you can attend workshops or classes to gain more knowledge and event planning skills.
What type of party planning business is most profitable?
The most profitable type of party planning business is one that specializes in large events, such as weddings and corporate functions. These events require a lot of planning and coordination, and businesses that are good at this can charge high prices for their services.
How much does it cost to start a party planning business?
To start an event planning business, it will cost you between $2,000 and $10,000. This includes the cost of setting up a business entity, obtaining licenses and permits, and purchasing necessary equipment.
What are the ongoing expenses for a party planning business?
The ongoing expenses for a party planner can vary depending on the size and scope of the business. However, some of the most common expenses include marketing and advertising, employee salaries, materials, rent and utilities.
How does a party planning business make money?
A successful event planning business can make money by charging a fee for their services, by selling party supplies, or by receiving donations from the party guests. Many event planners can also make money by holding workshops and classes to teach people how to plan their own parties.
Is owning a party planning business profitable?
Yes, a party planning business is profitable because it offers a unique service that is in high demand. Party planners can also charge relatively high rates for their event planning services, since clients typically value the convenience of these services and the expertise of the party planner.
Why do party planning businesses fail?
There are a number of reasons why party planning businesses fail. One reason is the business might not have a solid business plan in place. Another reason might be that the business owner does not have the necessary skills to run successful parties and events. Finally, the business might fail because it is unable to compete with other business owners in the industry.