Example of a traditional centerpiece
This is, without question, THE biggest mistake I have made during my many years in business. Even today, I still consider it a work in progress. How do you put a value on what you do? And, most importantly, how can you explain to most (if not all) of your clients that you are in business to give great service and design beauty, but that you also need to make a living?
I have heard it all:
- “If you give me a great price, I’ll turn you on to all my friends.” Which, even if it happens, her friends may also expect a “great price.”
- Do my benefit with me for nothing. This is great exposure for you.” I believe in charities, yet I have learned to choose which charities I support and give to freely. When I first started, I did many charities for nothing and the problem was that, again, the clients I received from the exposure expected basement prices too.
- “I’ll give you the balance payment the day of the event.” This is a HUGE NO NO. I can not tell you about all the cat and mouse games I have played at weddings, trying to collect my balance check from some of my clients. What I am about to tell you should be non-negotiable: MAKE YOUR CONTRACTS STATE THAT YOU ARE PAID IN FULL AT LEAST A WEEK BEFORE THE EVENT. (This way the check can clear.)
Even though I have been mostly fortunate to always have clients, a few years ago I almost went out of business for my mistakes in pricing. I was lucky enough to hire a fantastic Comptroller by the name of Anne Crenshaw and a financial genius named Sean Low. (He started his own company, The Business of Being Creative, and you can read his blog here). Both of them helped me tremendously in running a profitable business.
Example of a non-traditional centerpiece, made out of paper
There is so much to share on the topic of PRICING that I’d like to bring you part two in next Thursday’s Common Mistakes, but this is the first part of what I have learned:
- Use the 50/50 pricing model. Spend 50, make 50. Make sure all your costs and expenses are doubled in your final price. By expenses I mean everything–your time (something you should establish a price for), hard goods (like flowers, props), etc…However, even if you are running a 60/40 (spending 60 and making 40) you’ll be still running a profitable business (though your ultimate goal is always 50/50).
- Your clients need to understand, in extreme detail, EXACTLY what they are getting. This especially applies to you folks that are planners since most of your business is selling a service. (This was another huge mistake I made in the past–not giving proper presentations.) For your clients, this is like buying a coat without seeing it in person.
- When I first started, I was so thrilled about getting a job that I almost wanted to give it away. Even today, I am not allowed to discuss money with my clients because I am only thinking of how I can create a great design. If it’s possible in any way, be the artist and designer that you are with your clients, and have someone else within your company discuss money.
Please tell me, what do you say to those who accuse you of being overpriced? (I say, “Baby, I’m worth it!”)
On 02-18-10 heather says:
I say “I’m sorry, but it looks like we aren’t a fit. No hard feelings!” It is kind of like breaking up. The “dumped” then gets flustered and wants to REALLY work with you at any price. Humans are funny that way.
On 02-18-10 Barbara Hearne says:
You are so wise and gracious to share this gospel with us. No truer words have ever been spoken. Thank you for your direct approach and fabulous work.
On 02-18-10 Linnyette Richardson-Hall says:
Mr. Bailey:
I could not agree with your sentiments MORE! After 17 years in the business – I’m very hard core about the issue of pricing and money. I love what I do – but I have two kids, a house and the rest of the American Dream to take care of, so you will NOT shortchange me on this!
My contract clearly stipulates that the final balance is due the month prior (we bill on the 1st of each month), without exception. I’m not chasing you down for a dang thing – if you see me and my team at an event, trust & believe – we’ve been PAID.
P.S. I look forward to meeting you in person next month – I’ll be on the panel at the Master’s Brunch for WeddingWeek2010.
On 02-18-10 John Murph says:
Preach, dear, Preach. As a freelance writer/web producer, I had really take stock into what I’m delivering, the amount of energy and resources (travel, phone, computer, etc.) and sheer professionalism when it comes to pay.
One of the biggest lessons I learned last year was when I was asked to write something about the History of Black Music in Washington, D.C. for the D.C. Commission on the Arts. The person who contacted me was a bit surprised when I asked for payment. It was a like awkward because she said that know one had ever asked to be paid before.
She asked my price; I told her; and I got paid exactly what I asked for. The take-away for me is ask for what you need upfront and in contract even if it’s awkward. And that in the end, you’ll be more respected for your work by them because you put value on it upfront.
On 02-18-10 Teresita Doucet says:
Thank You Thank You..this too has been the major problem in our business…we get tons of work, just how to make money at it! I am printing off your great words of wisdom and putting it on :”LIke” wall! Cheers
Sita
On 02-18-10 La Toya M. Jackson says:
Mr. Bailey,
thank you so much for this important piece of information. I’m just starting out in the wedding and event planning business, and I was about to fall into the trap of “payment on the day of the event.” It’s apparent that I need to go back and take a closer look at my contract and revise it accordingly before I start to take on a lot of clients. Thank you for helping me to avoid this (and a few other pricing) pitfalls.
On 02-18-10 Lisa Smith says:
Mr. Bailey,
Thank you for sharing this information. I am very direct when it comes to money I let the client know I expect to be paid what I charge and if you do not pay me I don’t work, I also let them know that” I go above and beyond when it comes to planning their event I may charge more than your friend,relative or co worker but I can assure you that I am a professional not only is this my job it is my passion not a hobby the time I spend on your event is time being spent away from my family and if you were in my shoes wouldn’t you want to be paid too?”.
On 02-18-10 Renatta says:
I LOVED hearing this. As a planner who is just starting out, this pricing thing has been a definite struggle for me. How refreshing to hear these simple tips (and also that I can have someone ELSE do the money talking). Thanks for sharing!
On 02-18-10 Marcia Villiers says:
I said the very same thing “I’m worth it!” Very, Very Good and especially now that every one want’s to sell you the economy story. 50/50 rule is a very good model, and at least 4 weeks prior to event for final balance prevent a lot of oh the “mail” story. Yeah! Always refreshing. Thank you Mr. Bailey
On 02-18-10 Amira Harris says:
AMEN. I could not agree with you more. Charge what you are worth. This is my career, not a hobby. When clients understand that and you show them, they see the value in your product or service.
Thank you Preston for your wise words.
On 02-18-10 Cendi Micor says:
That’s a real eye-opener. It can be really tough to draw the line, especially when you are starting out and need experience. Thanks!
On 02-18-10 Apple says:
“Baby I’m Worth It”… that’s all the advice all us planners need. Thanks for always giving us the inside scoop!
On 02-18-10 Ophellia says:
Amen! I hope there are same brides who read this
As a destination planner, this is my biggest obstacle because brides come with the idea that it should cost less regardless of what they want to do. It is a huge part of my customer service to manage those expectations and still produce a great wedding and make a living. Thank you Preston…say it like it is!
On 02-18-10 Christine says:
Thank you for this post. As a floral designer, people think we are lucky because we “get” to work with such beauty all the time and flowers are so romantic. What is romantic about schlepping buckets, stripping roses, hours on your feet, striking an event at midnight when everyone else is partying or passed out? I love what I do and get great satisfaction from a well executed event, yes, but this is my career, business, and livelihood. Ask your clients – Would you spend all day at work for the fun of it? I think not. We have cost of goods sold, overhead, taxes, insurance and labor to pay for, in addition to a profit margin. I have had clients ask me to lower my setup fee for instance. When I explained to them that it costs me $100/hour for three staff people and it will take five hours that day to set up the wedding including transport, setup and cleanup, they totally get it and back off. And we need to stop allowing our clients to expect things for free, which is tough to do when the next guy will.
On 02-18-10 JONATHAN VERZOSA says:
I am grateful for you in sharing this issue. You have opened my eyes to reality with this tip. More power to you, Mr. Bailey!!!
On 02-18-10 Lindy Satterfield says:
Mr. Bailey,
First I just want to know the you are so amazing at everything you do. Second do you have any advice at all for a new Event Planning company? I am just starting out and I am do fairly okay. But pricing and getting clients is so hard. I live in Georgia a little south of atlanta and I am targeting the people south of the city, because their is not a whole lot of planners. I would love any advice for an upcoming planner.
If you are ever in Georgia I would love to meet you!!!!
Thanks,
Lindy Satterfield
On 02-18-10 Celia Callender says:
Thanks for the words of wisdom. First of all proper pricing is key. It is what makes people take you seriously, and what separates the professionals from those doing a hobby on the side. Secondly, I’ve always felt that clients made discussing payment seem like something taboo. It’s alright for me to tell you what type of flowers you will have, but the mention of payment, let alone ahead of time makes some uncomfortable. At the end of the day, you can’t take a trip on a plane without paying first, so why do clients think a trip down the aisle should be that much different.
On 02-19-10 Joana Tomova says:
Pricing… always the hardest thing in my job. Especially in my country /Bulgaria/. The people here haven’t learn yet that they have to pay, not only for the flowers, materials etc. but for your time, work, background and all the people involved in the making of their event. It’s extremely hard to give a contract in wich there is а column “Work”. In my first big wedding the klient was one evil woman, who didn’t pay me only the “work” value, beacause “there was 3 baloons less in the restaurant than I ordered!” …. no comment. Since then I higher my prices of materials and flowers, and the “work” column is the minor feather of the hole contract. The explanation for the clients is ” I work only with firs class materials and that’s the price for “the best”. I was really satisfied when I read that you charge 50/50 because thats and my way of making the final bill! Thank you
And YES, Baby you’re worth it, and if there is someone who does not bilieve that doesn’t deserve your services!
On 02-19-10 Amaris says:
Hi Mr Bailey, thanks so much for this article;it is worth its weight in gold.
On 02-19-10 xzhibitPlus says:
wow, you always hit the button right all the time. thank u so much for sharing your life and experience with us
On 02-19-10 Dino Varesano says:
Mr. Bailey,
as a florist and floral designer in the business for the past ten years , I found your words very wise and inspiring. It kind of brought me to your level for just one second although i do believe you are the best and really admire your work. I currently work in italy and sometimes find that all the price-related problems are only confined to my area and then find that it is a general situation that must be taken on carefully and wisely. i am really looking forward to meeting you someday and will continue to read about all your works..
On 02-19-10 martha Andrews says:
Hi Mr. Bailey,
I have often thought I would LOVE to have someone else do the quotes. I to get caught up in the design and begin to go down the merry path of I just want it to be fabulous, which, as you know, affects profit. How do you come up with the design and then have someone else prepare the quote?
martha
On 02-19-10 Tere Powell says:
Mr Bailey,
I put my all into the weddings I do and it’s not equaling out for me. I always try to give my weddings / events the illusion that my client paid more than they actually paid. Even though this has brought me clients the newer referred clients want even more for nothing. I do everything on my own because I love my business but your advice just hit home. I’m to soft hearted and need an assistant that will be bold with pricing. “Thank you for those wise words of advice.”
On 02-19-10 Caris McCainKing says:
Great Advice, I couldn’t have said it better my self! I would have never thought of having another person discuss
the money part of business with my clients because to me if what they wanted was great work and had a budget i would have to arrange my work to be with in their budget. But now I see its okay to do the 60/40 sometimes for a good purpose or a great reason. I also learned the hard way to get ALL payments before the event or take the loss. My contract states ALL monies paid 30 days prior, in the event something needs to changed or added less stress on their pockets getting it paid. Thanks for all the advice looking forward to part II on Thursday.
On 02-19-10 Beth Hohensee says:
When a client tells me I’m overpriced, I tell them that I’d be delighted to work within their budget, but that will require revising the design concept. So many want ‘world” but can only afford a few “countries”! We work hard to be creative and give bang for the buck, but my prices are my prices.
My contract requires payment if full 30 days before the event. If there is one less centerpiece or some other reduction, I add other decor somewhere or use the extra money to really beef up the other designs.
I’ve come up with a great response for donations or charity requests. I tell the group that we have a committee who reviews these requests, that we do 2 charity events per year, and require that we provide the floral decor for the whole event. They are welcome to submit in writing a donation request and it will be forwarded to the committee for review!
On 02-19-10 Tu says:
F-A-N-T-A-S-T-I-C!
On 02-19-10 Janet says:
When accused of being over-priced? Luckily, I haven’t been. I owe it to the face that I have great references and clients don’t mind spending if they’re going to receive same end result. Once I had a bride-to-be follow me around a wedding (she was a guest at a wedding that I was producing). She wanted to meet the planner; my assistant told her, pointed to me, and she literally booked me at the wedding. Another time, I was spotted on TV at a bridal show, and the bride-to-be came down to the show and booked me. I have been blessed to have had some great clients!
Mr. Bailey – I sat in on one of your courses a couple of years ago; you are as genious in speaking as you are in sharing your works of art! Continued blessings!
On 02-21-10 Nicole says:
When I am accused of being overpriced I simply tell people that “you get what you pay for!” When you settle for less that is exactly what you get. Less than you expected.
On another note. I’m starting to get more inquiries about destination weddings. What is the proper way to charge for lodging, travel, and even site visits that are needed before and during the event? What is a good approach for letting a client know what is required for the initial consult that takes place outside of your state and/or main delivery area?
Mr. Bailey, thanks for your willingness to help those who are in the industry!! I pray for your properity!!
On 02-22-10 Dan CRISTEA-IORDAN says:
Dear Mr. Bailey! First of all, thank you for sharing your experience with all of us. I’ve been working in this industry for about 2 years together with my wife. We’ve started an event plannig agency in Constanta-ROMANIA in 2008, just before we got married.
) i think you know what i want. Usually, we say to the ones who consider us overpriced “That’s the price! This is what you ordered values!”… many of them usually come back… 
I read your blog very carefully and we try to use some of your advices, as they cannot be all applied on our market.
Regarding the prices… yeah, this is sensitive topic, as all the clients want to get top class services with on-sale prices.
On 02-25-10 Common Mistakes: Paying or Receiving Commission | PrestonBailey.com says:
[...] and I lose out on the job. My advice to you: LET THEM. The reason is simple. As I discussed in my entry on pricing, if your goal is to make a 40 – 50 percent profit, and you give away 10 – 20 percent of [...]
On 03-08-10 Thom Green says:
50/50, really? You mentioned adding in your time. How do you propose for that? Do you estimate before contracting?
On 03-08-10 Ali- Berber Events says:
this is the third or forth of your posts i am reading.
i am amazed and i can’t thank you enough for GENUINELY sharing so much valuable tips. from the quality of the content. i can bet you are not only a great designer but also a great person.
Cheers