I want to end our discussion about planning and transparency by addressing an important question posted in the comment section. Your thoughts and concerns mean a great deal to me and I appreciate your letting me know what you need clarified.
Dear Preston,
At the beginning of this series, you mentioned listing five ways a planner can charge for an event, yet you’ve only discussed four. Will you please address the ways planners can charge a percentage of an event? Do you first secure a minimal deposit to begin the process and the rest after the event? I’ve always been a nervous about his format because planning budgets tend to fluctuate at times. If you begin with budget of $75,000 and the event winds up costing $85,000.00, do you simply invoice that? I would love some insight on this.
Simply Lavish
Dear Simply Lavish:
I am sorry for the oversight. Charging a down payment for the entire event is both a common and effective way to charge client. Here’s how it works:
1. Start by asking your client what is the complete budget they have in mind.
2. As a planner you’ll want to create a written budget based on your expertise. You should lay out how you think this money should be allocated.
3. Present the budget to the client with a binding contract.
Keep in mind that I am not a lawyer, but I would suggest including the following:
- Make it clear that this is an estimated budget but that the actual cost of the event might be different. I think a 20% leeway is safe. Be sure to note that you will do your best to stay as close to the estimate as possible, but you need their help. Make it clear that changes in their plans result in changes in costs.
- Agree on a percentage of the event and note that you are entitled to that percentage as payment, regardless of the cost of the event.
- Create a timeline agreement where you specify dates where you will firmly agree on the cost and receive the bulk of the money to pay for your vendors.
- State very clearly how you expect to be paid. This is up to you. If you are charging a percentage of the event, you might want to charge 50% at the moment the contract is written, 50% two weeks before the event.
- Make sure that you have a written understanding that the client pays for additional cost, always paying you the percentage of the total fee you both agreed on.
I hope this helps!
Preston
What part of your contract do your clients have the most difficulty accepting? I know some of my clients take issue paying myself and the vendors two weeks before the event.
(photo via Connect2Group)
PREVIOUS
George Bernard Shaw once said: “You see things and say, ‘Why?’ But I dream things that never were and say, ‘Why not?’” That quote embodies how Preston Bailey approaches every event.
AW
June 25, 2012
I’m part of a string trio that regularly plays for weddings. In the past we’ve always dealt directly with and negotiated terms with the clients. Recently, we’ve started getting calls from event planners wanting to book us on behalf of their clients. Since we’re not used to dealing with a “middle man”, we’re having a hard time creating solid partnerships with event planners in the area. In your experience as an event planner, do you have an umbrella service contract for any vendors that you find for your clients or do you have your clients sign each vendor’s specific service agreement? Do event planners expect to get a percentage of the rate that we charge their clients for our musical services? If so, should that come out of our pockets or their clients’ pockets?
Janice Brown
June 25, 2012
Mr. Bailey. Mr. Bailey! Thank you sooooo much for answering that question. And thank you Simply Lavish for asking.
Andrea
June 25, 2012
Dear Preston,
I love your insight! Currently we are going through some evaluation of what services we will continue to provide and what we want to change. For 15 years We have been known as a full event & production company with the bulk of the payments going directly to us for planning, design and securing all vendors and managing the entire event. Thus, the responsibility sits squarely on our shoulders to ensure every vendor does EXACTLY what the client wants.
Recently it has become an issue where I am no longer comfortable securing all vendors and taking on this enormous responsibility. Our billing process has always been just as you stated above.
50% down and the balance in full 2 weeks prior to event.
Since I am now looking to not carry the burden of securing all of the vendors and paying them directly ( and phasing this out is difficult) I wonder if you still agree that the above billing scenario works best with the client being responsible for paying all vendors and sub contractors directly 2 weeks prior?
Trying to find the best way to transition this into this new formula is difficult.
I would greatly appreciate any insight or guidance.
Nishaka
June 25, 2012
Excellent Blog! Though I mostly charge a flat fee per event, which works best for me. I do have a detailed questionnarie to help learn more about the event and expectations so that I properly quote the fee in a proposal.
Currently my billing process works like this.
25% deposit with signed contract is due to begin the project.
If the event is in 90 days or less away, it is 50% deposit with signed contract.
***Payable via check, money order, or credit card.
Payment Installments and Dates are included in the contract.
Then the balance is due 2 weeks prior to the event. If they need to pay to the balance the week of the event, then I require a money order, cash, or credit card. No checks the week of.
I would say 90% of my Clients pay the vendors payments directly via check or credit card. Only a few of my Clients actually paid the bulk to me to pay the vendors their fees for them. This is very clear in my contract. Now, they will write the checks out and give them all to me and I mail or deliver them to the vendors personally.
I have not had any major concerns about the contract. However, I do make sure that I highlight the cancellation and change of plans clauses to make sure we are clear of the terms.
Joyce
June 26, 2012
Thank you so much for answering the question Mr Bailey, you have certainly given me some very good tip especially since I charge a percentage.
ME
June 26, 2012
My clients would have an issue with the fact that no longer are the paying X flat amount spelled out in the package for the service, but that they are paying double, triple, and more than that amount for the same service.
How are you justiftying basically paying you that much more for the same service?? (besides i guess the legl responsiblilty of contracts in your name…but with a solid contract with the client i am sure you are not completely liable for those fees)
It might have a lot to do with what city you are in. Seems like certain cities paved the way differently on pricing and if your stuck in a flat rate city, you’ll never be in a percentage city because why would a bride with $200,000 budget pay a planner say $10,000 for service the same as a planner who ends up getting 10% =$20,000 ++ because my expierence has shown clients tend to go over budget when they start with a high budget.
And with that, cities with flat rates get stuck at a price cap when your at the top of the industry in that city. Judging other top companies in the city, your pricing has to be the basically be same or a client could sign with them because of less expensive price when your reputations are the same. It also takes awhile to ease in higher pricing when you dont communicate with other companies to make an increase overall…because their your competitors.
The problem for the planner with flat rate is the amount of work you do for the small flat fee (after commission earned on package considering your not the owner, overhead if your the owner, and end of the year taxes). There are only so many events one person can plan in a year without it completely overwelming their life working literally 20/7. Yes that 4 hours of sleep a night.
SO therefore, obviously the percentage is more ideal for a planner who wants to make a good living, get paid for the how hard and long we work , and have the security knowing you can increase your earning every year by the fact that the more expierence you have, the higher budget weddings you will contract to earn that percentage on. At a flat rate, your income stays pretty much the same or very slow to increase, and the income considering workload physically able to take, after ommission and taxes, is literally a teachers salary.
Therefore, due to all this, i didnt feel this post was as informative as some of the others.
I loved your breakdown of the wedding weekend pricing and easily translated to clients, however more than other competitors who even offer that small of a package and thus not sellable at that price in my city.
So your saying that you agree: on a budget, a percentage you earn, set amount you earn no matter what happened with budget, a possible flat rate on top of that for just using your service and then a percentage the budget can fluxuate without changing their cost to you? How do you figure your set amount to earn no matter what happens? I guess its way higher than ours and its just what is common practice for the servicepricing in your specfic city. If all charged percentage, all clients would have to justify it if they wanted the lux service. Too bad we dont have laws to help…oh wait minimum wage? haha just kidding, sorta..but really a way we have to charge law. Love my job, just would love to feel better compensated for my work/time and have income increasing every year to have continued success like a normal job your working so hard for and doing bigger and better work every year,
On a side note with that, its hard to show a client X amount in the beginning of planning when they hire a planner if they dont know much about costs of a wedding. So early in planning a flat rate, and for sure a transparent percentage, can seem high having not seen all the other vendors costs. Plus being a service, theres nothing tangible to justify cost in the beginning; plus the fact that people can technically have a wedding without a planner. When its all said and done you could have been paid for example, minimum wage, or less, over a year of planning one clients wedding (thats considering the flat rate listed above at 100 hours a month). If you did hourly rate like your other blog was about, that would mean the flat rate for 12 monthes of work equals the hourly rate of the same time of work in ONE month. 12X less than flat rate. Thats $70 per hour after commission compared to $5.85 per hour after commission….and both are before you have to do taxes at the end of the year as none are removed being in a commssion based job.
Therefore probably why theres so many bad planners out there because they only work minimum amount, dont go extra step, dont care etc because the flat rate money they are being paid isnt enough per wedding that they take more than capiable to keep quality in the work.
my last question is random: to those on the fence about hiring a planner, or to those who dont understand the service, how do you describe overall what we do that clients easily understand, therefore justify paying a lot for it when your not a fabulously famous Preston Bailey but do work with a top company in the city?
Overall advice to others: find out what pricing format is used in the city your in or thinking about going to and if you can pick, go to the hourly or percentage cities. No cities will hire someone for percentage or hourly if the other companies there are all flat rate.
Simply Lavish Weddings & Events, LLC
July 6, 2012
Dear Preston,
I thank you so much for replying to my request/question. Even after reading your breakdown, the % format still has me nervous, however charging a percentage for an event is the only way that makes sense to me with a budget in excess of $50k.
Reading fellow blogger @Nishaka below, and I too use the exact format to charge my clients.
Again I thank you for taking the time to respond to my request and for your daily professional insight. It means to the world to alot of us.
Samantha
December 1, 2012
I’ve never seen a justifiable way to use this method and never will. My prices are based on the value in each package, my time, education, skills, experience and great customer service! “Whatever you’re paying out, we want a chunk of that”?? I don’t get it. “And if your budget increase to have more flowers, our price will increase too!” Whaaat??