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Your best friend Katie throws a mean dinner party. Though she has a day job at a bank, she’s a great chef and a warm hostess. She’s just brought out dessert to the group, and you raise your glass to toast her. “To Katie,” you say to the group, “an amazing cook and a gracious host!”. Everyone nods in agreement and drinks.
Katie then turns to you and says, “Actually, I wanted to let you know I’m opening my own restaurant, and I’m asking some of my close friends, who know how passionate I am about cooking, to consider investing in it. I thought you might be interested.”
The Doer vs. the Manager
Yikes. If you’re like most people, you’re thinking: what does being a good cook have to do with running a restaurant? There are a ton of skills required that have nothing to do with cooking, such as marketing, finance, pricing, hiring and managing staff, operations, etc. You hate to dampen Katie’s enthusiasm, but you’re going to need to see her address all of those areas before you’ll consider investing a dime in her restaurant.
This is the most common problem entrepreneurs encounter. People assume that if they are good at a given craft they can run a business selling and producing that craft. Sometimes they have a knack for both skill sets, but usually not. And no matter how brilliant you are at your craft, poor business skills can kill your company.
We all know event planners or designers whose work is utterly mediocre, yet who are very successful because they have good business skills, or a partner who does. And there is a long list of extremely high profile, incredibly gifted event pros who are either losing money, or not making anywhere near what they should, because there are major flaws in how they run their businesses.
The 3 P’s: Pricing, Pipeline & Prospecting
I’ve spoken to dozens of event company owners and their biggest business struggles tend to fall into three categories. Over the 20 years I ran my event business, whenever we had bad years it was due to these same issues, I’ll be the first to admit.
1) Pricing. Nothing’s more maddening than being crazy busy all year doing great work, only to look at your year-end financials and say, “That’s all I made?!” People don’t charge enough money for the amount of time they spend on an event. This is usually a result of them (a) not knowing their full internal costs, and (b) not accurately tracking the time it takes them to produce an average event. Without both figures, you’re flying blind.
2) Pipeline. The event business can be very seasonal, often extremely busy in the fall and spring, and quieter in summer and winter. But there’s only so much work you can take on in May or October. When I ran my event company, I got tired of this dynamic after a while and we aggressively targeted several major clients whose annual events were in January and February. Landing just two of those clients made a huge difference in balancing out our workflow, and adding much needed revenue during previously slow months.
3) Prospecting. Few people like to prospect. Most would prefer to take on a much less ideal client that calls them, than have to proactively go after their target client. Then they’ll complain, “if only we had more XYZ type clients.” Prospecting doesn’t mean cold calling anymore. It simply means identifying your ideal client profile, and then going after them through whatever means works.
If any kind of outreach makes you feel too pushy, then create something of value and offer it to your prospect. Global event firm First Protocol created a quarterly networking and dinner series called Food For Thought, where they bring in great guest speakers and invite a small, but high level group of corporate planners to a cool new venue. These events have become a coveted invite, and it makes it much easier to reach a new prospect by inviting them to one.
Master these three P’s and you’ll go a long way toward building a successful foundation for your event business.
This is a guest post by Howard Givner, he teaches The Launching Pad: Starting Your Own Event Company at the Event Leadership Institute..
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