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What sounds more fun than starting a party planning business? You get to spend your days planning fun events and activities, and then get to see everyone enjoy the parties you worked so hard to plan perfectly.
In reality, starting a party planning business is just as difficult as starting any other business. Before you can get to the fun part of planning parties, you still have to get through the logistical aspects of starting a business. There are multiple moving parts to consider as you start a party planning business, so we’ve created this guide to walk you through the process. Let’s get started.
One of the first steps in starting your party planning business is writing a business plan. While this might feel like “busy work,” it’s actually a foundational step toward creating a successful business.
A business plan is a tool you can use to think through the steps of building your business. While thinking through these steps, you’ll start to notice potential problems and pitfalls. Awareness in advance can make solving these problems that much easier.
In addition to helping you identify problems and create a roadmap for how you’ll take your party planning business from an idea to a profitable company, you’ll also need your business plan if you decide to apply for business funding. You can make this process even easier by easing a business plan template or business plan software.
As you’re writing the business plan for your party planning business, you’ll want to conduct a market analysis to determine whether there is a demand for your business, who is already operating in the space, and more. With this information in mind, you’ll then want to define your target market.
Your target market or niche will be the types of events you plan or types of clients you work with. When you’re first starting a party planning business, it can be helpful to focus on a small niche market to more easily target certain clients. Then, as you gain experience, you can broaden your scope to work with other types of events or clients.
While there are many different niches in the party planning industry, here are four different main types you can choose between.
Corporate events is a broad party planning category that includes a number of different types of events, but is categorized by the type of client. With corporate event planning, you’d be working with corporate businesses, which could range across size and industry.
Here are some examples of corporate events you might be able to lend your party planning expertise to:
Some corporate events require specialized knowledge to plan, but if you’re looking to start in this niche, look for smaller, local companies in your area first.
Social or celebratory events focus on party planning for an individual or family. You can keep a broad focus and plan any type of celebratory event or specialize in a specific type of event.
Social or celebratory events include:
Another type of event you might decide to specialize in with your party planning business are promotional events. This type of party is a combination of corporate and social. It’s typically an event that’s designed to be fun and attract the public, but also be informative.
Promotional events include:
Finally, commemorative events are typically more formal and intended as remembrances for people or events.
Examples of commemorative events include:
While “party planning business” might seem like a straightforward description for your business, it’s actually a wide umbrella term for a type of business. And based on the different types of party planning businesses we discussed above, you’ll want to make sure you’re clear about what kind of party planning business you’re starting so you can start finding clients. Defining your scope, mission, and elevator pitch will help you do this.
Defining your scope will help you to limit what types of events you want to plan and what type of clients you’re interested in working with. You’ll have a good idea of the scope you want to work within based on the target market you chose in step 2. However, within that market you may want to narrow down your scope even further based on project size, location, timeframe, etc.
One of the most difficult aspects of business is knowing which clients and projects to turn away. But specializing in certain events and perfecting your business in that area means satisfied customers who will spread the word about your party planning business.
Your mission statement is a short statement that defines what your company does, who it serves, and why. The mission statement for your party planning business might also define your values and what your business stands for.
The mission statement acts as a guiding principle for future business decisions that you’ll have to make.
Once you’ve crafted your scope and mission, it’s time to write out and practice your elevator pitch.
In its simplest form, your elevator pitch is the 30-second pitch you give to sell your business to a potential customer or investor. You want your elevator pitch to describe your business, spark interest, and motivate someone to ask questions or take action.
While a certification isn’t required to start a party planning business, you may decide to seek out a training program to expand your knowledge and build your confidence in your party planning skills. A certification is a signifier to potential clients that you take your work seriously and have the credentials to back it up. Plus, it can also be a good networking opportunity to meet like-minded individuals and grow your connections.
There are many programs that offer party planning certifications.
A certification will be especially important if you’re looking to work with corporations, as they often have requirements for what certifications a business must have before they can hire them. Additionally, some individuals look for a certification before hiring a party planner—and even if they’re not explicitly looking for this designation, it can help set you apart from the competition.
Once you have a good understanding of what your party planning business will do, it’s time to get into some of the nitty-gritty details of starting a business.
You need to choose a business entity that will give your business the legal protections and tax designations that work for you. Your business entity choice will affect the taxes you’ll pay, your legal risk exposure, and more.
Each business entity type comes with unique advantages and disadvantages, which will help guide you to the right choice for your business. However, it’s always a good idea to consult a business attorney at this stage to get some expert advice on which business entity will serve your party planning business best.
Once you decide on your business entity, you will likely have to register your business (with some exceptions, discussed below). The specific steps around registering your business will depend on the state where you’re operating your business, but the secretary of state website is a good place to start. Here are some common business entity types to consider.
The most basic business entity is the sole proprietorship. This type of business consists of a single owner and operator.
One of the advantages to a sole proprietorship is that there’s no need to register your business. A sole proprietorship is a common business entity for consultants, contractors, and single-owner party planning businesses.
Sole proprietorships are one of the most common business types in the U.S. because of their simplicity. One of the drawbacks of a sole proprietorship is that there’s no separation between you and your business. It’s simple to file your taxes, as your personal and business income are the same, but this also means you are personally liable for any business debts and legal obligations.
As a sole proprietorship, if your business is sued, your personal assets are on the line. Because of this risk, many business owners choose an LLC or corporation instead of a sole proprietorship.
Very similar to a sole proprietorship is the partnership. The key difference between the two is that sole proprietorships have one owner (or a married couple as the owner), while partnerships have two or more owners (who are not married). There are two types of partnerships: general and limited.
A general partnership is just like a sole proprietorship in that it doesn’t need to be registered with the state. It’s essentially a multiple-owner sole proprietorship, with each business owner reporting their share of business profits and losses on their personal tax return.
A limited partnership is one in which there are two types of partners within the business: general partners and limited partners. General partners actively manage the business and are jointly liable for the debts and obligations of the business. Limited partners, on the other hand, don’t actively manage the business and therefore receive limited liability for the business debts.
A limited liability company, or LLC, is similar to a limited partnership in that it insulates the business owner’s personal assets from the business’s legal and debt obligations.
If you’re wondering: “Do I need an LLC?” it’s probably time to seek assistance from a knowledgeable business attorney.
An LLC offers more protection than a sole proprietorship, but it also has more requirements to get started and to stay compliant each year. An LLC requires certain paperwork to be filed with the state in which you do business. Some paperwork will need to be filed annually.
One of the benefits of LLCs is that you get to choose how your business will be taxed. You can choose between being taxed as a corporation or as a pass-through entity.
A C-corporation is an incorporated business that is completely separate from the business’s owners. A C-corporation, or C-corp, must also have a board of directors, shareholders, and officers. While this sounds complicated, these roles can all be filled by the same person.
A C-corp has a lot more regulations around it, meaning there are more tax laws and legal obligations that must be met. C-corps are subject to “double taxation,” meaning the business must pay a company-level income tax and shareholders also have to pay personal taxes on corporate dividends. Each state has its own requirements for how a business incorporates and what fees are required.
An S-corporation, or S-corp, is similar to a C-corp in that it offers legal protection to the owners, but it remains a pass-through entity for tax purposes, like a sole proprietorship. An S-corp’s taxes will be processed on the business owner’s personal tax return. An S-corp requires no corporate level taxation.
Like, C-corps, there are some filing and paperwork requirements with an S-corp that will depend on your specific state’s requirements.
When starting a party planning business, you will likely need some business licenses or permits to operate your business. You may also find you’ll need to obtain specific permits for the parties you plan, as well.
The specific licenses you need will depend on what type of party planning business you start and where your business is located. Some licenses you may need include a local business operating license, a fire department permit, or a signage license.
Even if you plan on starting your party planning business as a home-based business, you may still have to obtain some licenses or permits, so make sure you confirm with your local, county, and city governments before you officially open your doors so you don’t end up with any violations.
A step that some new business owners forget when starting their business is to separate their personal and business finances. While you may not think you need to do this when you’re just starting your party planning business, the earlier you get this one done the better it will be for both you and your business—not only for your taxes but also for your legal protection.
To separate business and personal finances, you’ll want to open a business bank account and a business credit card, and then restrict your business spending to these accounts only. Similarly, you will want to make sure you don’t use these business accounts for any personal expenses.
How much does it cost to start a party planning business? This answer will depend on the type of business you start, whether you plan on renting office space or working out of your home, how you plan to promote your new business, and a host of other factors.
If you find that starting your party planning business is going to take more capital than you have on hand, though, you might turn to a financing option. Understanding what types of business loans and funding are available is an important part of being a business owner. After all, even if you don’t need any funding right now, you might down the road. Here are some common types of business funding you should have on your radar.
In the hierarchy of business loans, an SBA loan is one of the most coveted. SBA loans offer some of the best repayment terms available on the market. However, it’s also difficult to qualify for this type of financing, especially as a new business.
The SBA microloan program, therefore, is intended for new businesses that are looking for $50,000 or less in funding to start or expand their business. SBA microloans are a great option for new businesses that need a smaller injection of capital to get started.
The maximum loan term for an SBA microloan is six years. Interest rates typically range from 6.5% to 13%.
If you’re in need of a smaller amount of cash to start your party planning business, consider using a business credit card, specifically a 0% intro APR business credit card. Because these credit cards have zero interest for a set period of time—12 months at most—you can treat it as an interest-free loan of sorts.
Say you need to buy some supplies for your first party planning gig. You can put these larger expenses on your 0% intro APR business credit card and while you’re waiting for your client to pay their bill, this balance won’t accrue any interest. Then once you’re paid, you can pay off your credit card bill. The important thing to remember here is, this is only a useful tool if you have a plan to pay off your balance before the introductory offer ends. Once it does, a variable APR will set in based on the market Prime Rate and your creditworthiness.
A business line of credit is like a more powerful credit card. In this funding option, a lender will extend a specific amount of money (known as your line of credit) that you can draw from at any time. The pros of a business line of credit are that you only have to pay interest on the amount you use, the money is suitable for a wide range of business expenses, and you don’t need great credit to qualify. Using a business line of credit responsibly can also be a great way to build your credit score, which can help you qualify for even better financing options in the future.
Once you’ve been in business for a while, you may decide to look into a business term loan. This financing option is easy enough to qualify for if your business has been operational for some time, you have a good credit score, and you’re generating revenue.
Term loans are suitable for a wide range of business purposes and have lower monthly payments and longer payment terms than short-term loans. Depending on the lender, you can also receive this funding in just a few days.
See Your Business Loan Options
Once you understand your target market, know what type of business entity is right for you, and know more about your funding needs, you’re well on your way to starting a party planning business. Now, it’s time to build your brand.
You’ll need to build your brand internally to start. Choose a business name, domain name, and color scheme; write a tagline that describes your business; and create pricing packages for the different events you’ll plan.
Then it’s time to show your brand to the world. Use the small business branding you’ve created internally to share with others what your party planning business does. Set up social media pages for your business, create a business website, and create business listings on Yelp and Google.
You’ve done the prep work, but now starting a party planning business comes down to finding your first client so you can start doing what you love—and getting paid for it. Finding clients, especially as a new business, is all about your network. Not only will your network help you find clients, but you’ll also need to forge relationships with vendors, including caterers, entertainers, suppliers, marketers, musicians, and so much more.
In addition, you’ll likely want to get to know other party planners in your area. Go back to your market research and start attending local events that other party planners and people in the events industry frequent.
But don’t limit your network to people in your industry only. You never know where you’ll find your next meaningful connection.
Starting a party planning business is not easy. Luckily, there are a lot of resources out there to support you along your journey in starting your business. It’s okay to not understand or know the answer to every question, but consult your resources—including a business attorney or tax professional familiar with your industry—to help you through the process.
Before you know it, your party planning business will be fully functioning!