Finding the Value: How to price your work and know your worth

July 27th, 2016 | by Jennifer Taylor, Taylor’d Events Group

KNOWINGYOURWORTH

Every business owner knows the value of the work that they do. The problem is that many others don’t, especially clients who always want lower rates and deep discounts. With that said, it’s important to price your work so that it’s worth your time and effort, especially when you’re balancing the work with other day-to-day tasks.

There are multiple pricing structures to consider, so be sure to know your options before mapping out your offerings. The way you price your services is unique to your company, so it’s important to think about what method is the best fit for your business. However, it may help to look at competitors’ pricing just to get an idea of what the local market looks like – keeping in mind that yours doesn’t have to (and shouldn’t!) fall right in line with them.

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Let’s cover some of the most used pricing structures:

Commission

Admittedly, this is not a popular approach for pricing but it’s worth covering. Commission works by getting paid through the vendors you hire. If, for example, you’re a planner and you hire the caterer, florist, and bakery, you would be paid a portion of their fees. Generally, I suggest avoiding this option.

Percentages

In this case, you would look at the client’s overall budget and choose a percentage as your fee. If your going rate is 15% and your client’s budget is $50,000, you would bring in $7,500. This can make sense if you generally stick to one type of wedding, but be cautious with clients who increase their budgets after the initial consultation. Include a clause in your contract that requires a fee adjustment if they change their budget.

Hourly

Charging hourly requires some math, but it can make sense if you want to keep everything consistent based on the time you spend on each client. Generally, hourly rates are calculated with the following formula:

(The 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 your goal for the year is to earn $50,000 net, you’d have to charge $62.50 per hour to meet your goal. However, if you look at the average day of an event professional, things don’t always break down into neat hourly units. Unless you have a strict time management tool, it may not make sense to bill hourly.

Packages/Flat Rates

This is by far the most popular option among event planners, as it’s simple for both the client and the vendor. However, determining your package rates is not as simple as pulling numbers out of the air that sound about right. With a test client, start a tally where you mark the number of hours spent – from the client appointments to the behind-the-scenes work to the actual day-of services.

Using the hourly rate calculated above, you can determine a pretty accurate estimate for a typical event and use that as a starting point. You can then create lower and higher packages based around your average event.

The Art of Negotiation

Even if you have the best rates in the market, you’ll still come across those clients who aren’t happy with it and want you to make concessions for them. While some discounts may be appropriate, don’t shortchange yourself for any reason. Don’t forget the tings that you give up in order to put together gorgeous weddings for your coupes – weekends, birthdays, and holidays may be missed and you should be charging accordingly. If you don’t, you may begin to resent the couple and their event – it’s better off to come to an agreement to avoid any negativity.

My suggestion is to negotiate through add-ons, not through pricing. While the client may not be getting a discount on their package, they may be satisfied with an additional service for the same initial fee. Keep it simple so it doesn’t add to your plate too much, but it’s much better than lowering the value of something that you’ve already determined to be worth your time.

Don’t assume that estimated prices or even your competitors’ prices will work for you. The way you price your services has a major impact on your future as a business, so do your due diligence and make your efforts worthwhile the right way.

Meet the Author

Jennifer Taylor, Taylor’d Events Group 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.

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