How to Charge a Percentage For An Event
June 25, 2012
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.
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.
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!
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)