During the past couple of years, event management business has grown intensely in the major cities of Pakistan. The increasing population has also escalated various businesses which have added to the demand of event management. In addition to investors, youngsters have also started participating in this business. Many female students have taken up this as a part time profession. The best aspect of this business is that it can be started with a team of only 2 or 3 individuals with very less or zero investment. The business mainly depends on personal contacts and every single project/event if successful lands more business. IBEX is exploring this business opportunity of event management companies which are in collaboration with multiple vendors for the provision of the related equipment.
Types of Events
Broadly speaking, there are two markets for event planning services: corporate and social. The term “corporate” includes not only companies but also charities and nonprofit organizations. Charities and nonprofit organizations host gala fundraisers, receptions and athletic competitions, among other events, to expand their public support base and raise funds. Thousands of these events occur each year, and although the large ones require specialized event planning experience, one may find smaller local events to start out with. Companies host trade shows, conventions, picnics, holiday parties and meetings for staff members, board members or stockholders.
Social events include weddings, birthdays, anniversary parties, children’s parties, college functions and so on. The event company may decide to handle all these events or just specialize in one or more of them.
Starting the Business
In the event management business, the location does not matter. Pubic relations and business contacts are significant. In the initial stages, the work load can be distributed among 2-3 people. One person can deal with the vendors while the other person can look after the business and the third one can be responsible for handling the creative side. During the start of the business, it is not advised to have an office; this only increases an unnecessary expenditure. After the initial events, the company can start its marketing and PR strategies.
The back bone of this business is the relationship with vendors. There should be more than 5 or 6 vendors for each specific task. The company should develop good relationships with all the vendors so that they can give you the best possible rates on the related equipment, food stuff and other provisions.
How to get projects?
The person responsible for presentations/ proposals must have excellent presentation and communication skills so that he is able to convince clients. Once the team has a few projects in hand then they can show their portfolio to potential clients but till that time it should try to keep the service charges low.
Major Requirements of an Event
Requirements vary from event to event. Corporate events are different from social event as each has its unique prerequisites. The following equipment and facilities are needed by any event management company.
- Canopies-Tents—Carpet-Tables & chairs
- Various decorations suiting the event
- Sound system/Disc Jockey (DJ)
- Dance Floor
- Rent a Car
A good event manager should have at least 5 to 8 vendors for backup for all these necessities. All the equipment is provided to the event company by vendors at minimal rates.
As the work and the equipment have been outsourced to vendors, each vendor also provides workers for their relevant work. In the start of the business, there is no need to hire workers or even buy a car to transport the equipment; everything should be outsourced. The rest of the equipment can be purchased with the passage of time and also depending on the number of projects/ events the company gets.
The profit margins vary from event to event. Sometimes a special discount is given to special clients while at other times a sufficient amount can also be charged. Some event planners charge a fixed amount as their “service charges” excluding the equipment cost which is minimal as the event company is renting the equipment at a low rate from vendors. Some event planners charge a certain amount with all services included in it. A normal wedding event can bring a profit of Rs. 20,000 to Rs. 30,000. Some times this amount can be increased up to Rs. 100,000, but it solely depends on the client and the work of the event manager. If an event company can get 5 clients in a month or 3 months; it can easily make more than Rs 1.5 lac. Don’t forget that we are talking about the small event managers. Event planners who are well established and are in the field for more than 3 years, can earn much more than this amount. If you invest in this business by purchasing your own equipment, the profit margins can be greatly augmented.
Charges are typically determined by three factors:
- Market segment served. Social events have a different fee structure than corporate events. In the social events industry, planners typically receive a fee for their services, plus a percentage of some or all vendor fees. The two income streams produce enough revenue for a profit.
In the corporate events industry, however, planners typically charge a fee for their services, plus a handling charge for each item they contract. For example, a planner buys flowers from a florist, marks them up and charges that amount to the client.
- Geographic location. Fees are higher in the metropolitan cities likeIslamabad,Lahore,Karachi, Faisalabad etc. Moreover, with in these cities there are some posh areas where event managers charge more as compared to other areas. This difference reflects the variation in the cost of living.
- Experience and reputation of the event planner. If you’re just starting out in the industry, it’s reasonable to charge less for your planning services while you gain expertise.