Meet John. He runs an event planning company in New York. He charges his clients on a project basis. But there’s a problem. He and his staff are exhausted working 16 hours a day, there’s little money in the bank to pay the bills, yet John is fantastic at what he does.
When I see talented people like John delivering and suffering cash flow squeezes, it drives me crazy. What would you do?
The first question I asked John was, what value do you bring to your clients? There are a million event planning companies out there, what makes you different?
He said, “We plan the events, but we also make sure high value people are at the event. These events are usually fund raisers so the quality of the guests really matter.”
Aha! So these guys are not event planners; they’re influencers. In one five minute phone call, John can make sure people whose names are nationally broadcasted, show up.
John’s company earns $20K per event with 200 people present. That’s too little money for too much work.
Here’s what we recommended to John:
- Get out of the event planning business. Find a subcontractor that’s superb at event planning and delegate all the logistic headaches to them.
- Next, don’t charge by the hour or by the event. Charge by the HEAD. Charge at least $200-$400 per head.
- Some clients will scream, but others will realize they’ve been getting a free ride for a long time. These events raise from $250K-$500K each.
- Would the client invest $40K to get a return of $200K? Of course.
- Last we told John to make sure the client knew that the quote for their fees was only valid for 24 hours and with a lead time of at least six weeks.
If the client took longer than 24 hours to sign the contract, you reserved the right to renegotiate your fees.
If the client chose another, cheaper resource then asked John to pull a rabbit out of a hat five days before the event to fix problems, the price triples.
The bottom line is, try to get out of a commodity business. Organizing an event is something many firms do.
Focus on the part of the business where you’re offering a unique and highly valuable service, like inviting people of influence.
I asked John, “If the client didn’t hire you to invite high profile guests, who else would they call?”
You know what he said? “There’s no one else out there doing what we do.”
OK. Earth to John. Stop bottom fishing. If you charge per head, your revenues double over night on every project.
The amount of time it takes to complete the job also gets cut in half.
Why? Because now you’re not worrying about the table cloths and the rubber chicken.
You are a specialist. Specialists always charge more. So should John.
John will make more money, get more sleep and still deliver great value for the client.
You can do that too! Feel free to write to me and we’ll see how we can help you increase your revenues too.
