If we had to pick “the hardest thing to do” in business, it would be pricing our services. Because, regardless of whether you’re just starting your wedding planning business or are 10 years in, crunching the numbers (and figuring out how to pay yourself) is something every planner struggles with at some point. But, just because everyone struggles with it doesn’t mean you have to struggle for a long time—and you shouldn’t! So today, we wanted to share our top tips to help you review the numbers behind your business and figure out how to price your services for profit. Read on for our best pricing practices!
Step 1: Know Your Numbers
When it comes to figuring out how to price your planning services, the first step is to do a financial needs assessment. From knowing your recurring expenses to how much you want to be saving, you cannot begin to formulate a profitable pricing structure if you don’t understand the fundamentals of what is coming in and going out. So, open a spread sheet (and maybe your online banking statements) and start listing the monthly, annual, and one-off expenses you have for your business.
- What does it cost to run your wedding planning business? (We’re talking about regular or recurring expenses like rent, internet, insurance, etc.)
- What are other expenses you have? (Think assistants, marketing budgets, client gifts, etc.)
- How much do you need to set aside for taxes? (This varies per state, so we recommend hiring a CPA to help you figure out this percentage.)
- How much do you want to put in savings every month?
- How much do you need to take home to pay your personal bills?
Once you know these numbers, you can do simple calculations to decide where your baseline pricing needs to be.
Step 2: Figure Out Your Hourly Rate
Once you have your pricing baseline, you need to confirm that your estimate is accurate and that you’re making the hourly rate you need to be. For example, let’s say you booked a full-service client 18 months out and charged them $5,000 for your services. But, over the course of those 18 months, you spent a total of 150 hours working on their wedding. That means your hourly rate was $33.33/hour—and that before accounting for your expenses, taxes, and savings! See how you can get yourself in trouble?
The solution is to track your time so that you understand how many hours you spend on your clients for each service, as well as where you might need to set up better boundaries and expectations.
Pro-tips to help you track your time:
- Batch your work by client so it’s easy to know “I just spent 2 hours” working on Jack and Jill’s wedding.
- Use a time-tracking app or plug-in if that makes your life easier. (Or, simply watch the clock and log your time in an excel sheet or note under the client project in Aisle Planner).
Step 3: Revisit and Revise Your Pricing (Every Year)
Perfecting your pricing is a journey you will be on as long as you’re in business. For this reason we strongly recommend revisiting your numbers on an annual basis. Because, whether your cost of living has increased, your experience has bumped you into a higher tier, or there was a shift in the average price in your market, you want to make sure that you’re building a sustainable business and not undercutting your own potential to be profitable.
What to consider before re-crunching your numbers:
- On average, how many hours did you spend on each of your services (planning and/or coordination)?
- Did any of your recurring operating expenses change?
- Are you adding any new expenses?
- Do you need to take out more for taxes?
- Are you trying to save more?
- Do you need to make more?
Make this financial assessment a regular administrative task and (over time) you’ll get better and better at perfectly pricing your services!
Want to learn more about how to price your wedding planning services? We are sold out for 2019’s wedding planner workshop but you can save your spot for 2020 by emailing us at academy@lvlevents.com! Join us for 3 days of diving into your business and planning process to set yourself up for your best year yet!
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