The more specific you are about the requirements for your event, the better your event manager can control costs.
When you decide to hire an event manager, you need to know what you will pay. In order to make a decision on whether the event management cost is suitable for the event you are hosting, you need to have a basic knowledge of the ways that these companies quote their fees.
Event planners normally quote fees for projects using one of the following methods:
- Flat fee
- Hourly fee
- Percentage of expenses
Flat Fees
Event management companies usually charge flat fees for “all-inclusive” events, such as company retreats sporting events and events that need a head count.
If you decide to host a weekend getaway for ten people to a historical site, the company will provide a flat fee which includes transportation, lodging, food, admission fees, and a tour guide. If the event costs $4,500 to host, the event managers may request a flat fee of $500 to organize the entire trip. The total price for this event would be $5,000.
Hourly Fees
If you are planning a “template event,” the event management cost may be calculated using an hourly rate based on services rendered. This is a great option for clients since there is more flexibility and estimates can be given easily.
If you are planning a Christmas Party which follows a standard template, the company may tell you that the planning process takes 25 hours at $X per hour. This allows you to stay within your budget and set aside budget for the planning fees. It is important to keep a record of any extra time the company puts in so that you can adjust the budget, request funding, and factor at least 5-10 extra hours into your event budget to be safe.
Percentage of Expenses
If you are planning a large charity ball or an event that involves selling tickets, the event management costs may be determined by percentage. Most event planners will charge a 10-20% commission of the total event planning cost. If you decide to host a weekend with a group dinner, private golf, and historical visits for a group of 40 people, the company may give a quote of $20,000. If they decide to charge a 15% service fee, you will need to pay them $3,000.
The event planning companies will often give estimates based on your budget from the beginning; however, if the expenses increase or decrease throughout the planning process, the fee will also change. This is a great option for planning events that are highly complex.
Event Types
Many planners will alter their fees based on the type of event that you decide to throw as well. Some event planners will charge a flat percentage rate for weddings, retreats, golf tournaments, or any other event. It is important to remember that they may also decide to work on an hourly rate, or even a percentage of ticket sales plus a flat fee.
There are many different payment plans and styles that event management companies use based on the project, the amount of man hours that they need to put in, the amount of work they have to do, and their reputation. New event management companies will usually charge less since they are trying to establish a reputation, while companies that are well established and have a lot of experience will be able to charge more for their services.
The important thing to remember is that you need to be completely up front about your budget, the services that you want to contract, the type of event you want, and the goals of your event. Be sure to ask about all the different payment schemes that they have to offer, and whether there is any other information you need to know about each payment plan.
