Having your own event planning business can be a juggling act with income, bills and accounting. We don’t know if next month will bring 10 bookings or zero. However, our bills will still be due no matter what. Managing fluctuating income is very important for the success and sustainability of our business.
Here are four tips to help event planning business owners with income management.
- Always have an emergency savings fund. If your business has a really tough month income-wise, or if you get sick or hurt, you will still be able to pay bills. Occasionally we have a few slow income months at my event planning company. Luckily, we have an emergency fund to cover businesses expenses and salary without stress when that happens. When business picks up again, we replenish the emergency fund for the future. If you are just starting a business, it is important to have a large emergency savings fund to cover expenses while you build your business.
- Be strategic about when you take on new clients. As a business owner, I can look at my projected income for the year on one spreadsheet. By looking at when the projected income won’t meet my expenses for that month, I know we need to book events or generate income before that month arrives. If you don’t have a spreadsheet or some other form of income projection software, this is an important first step to getting a grip on managing business income. If I see that we aren’t going to meet expenses for a month that is coming up soon, it may be time to network more, run a promotion, launch or add onto a current Facebook or Google ad and touch base with our referral sources.
- Cut your expenses to the bare minimum during your first few years. It is important to have some breathing room and not stress about unnecessary expenses. If you’ve had a few good years and find that you are freely spending money, rein it back in for a few months and evaluate where you may be able to cut back and put more money in your emergency savings fund. Event planners often get so busy with clients that we don’t realize we are wasting money on unnecessary business expenses or services.
- Create a payment schedule that works. It may make sense for your clients to pay monthly or quarterly instead of half down and half paid at the end of the planning process (or any number of other ways you may handle payments). For my planning business, all of our clients pay quarterly at the same time quarterly tax payments are due. This has worked really well with our cash flow. If your current payment plan isn’t working well to manage income levels, try something new.
While it can be challenging to manage fluctuating income in an event planning business, it is possible. By having an emergency savings fund, maintaining a clear view of your monthly cash flow, keeping expenses low and structuring client payments, you can grow a sustainable event planning business.