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Sapphire Events: GETTING PAID FOR THE CREATIVE

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Tess Robin

on 4 August 2016

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Transcript of Sapphire Events: GETTING PAID FOR THE CREATIVE

GETTING PAID
FOR THE CREATIVE

Valerie Gernhauser
Tulane Law School class of 2009
Founded Sapphire Events New Orleans in 2011
Launched Ruby and Pearl Events December 2014
My Mission:

Maximize the earning power of
entrepreneurs in the wedding
space
NUMBER ONE MISTAKE CREATIVES MAKE IN PRICING
Not charging for what sets you apart

There is a time and a place for flat fees:
When your target is
high volume client turnover
= 20+ weddings a year per person
When you are offering a service that clients can take off of a shelf and put into a basket
i.e. Event management services
WHY FLAT FEES DO NOT WORK FOR CREATIVES
3) The biggest question mark we cannot predict is the issue of
time
COST = COMPLEXITY = TIME INVESTMENT
If the cost is low, then the complexity of the line item is expected to be relatively low.
If complexity is low, then our required time investment in managing the line item is expected to also be low.
If the cost is high, then the complexity of the line item is expected to be relatively high.
If complexity is high, then our required time investment in managing the line item is expected to be substantial.
(MO' MONEY, MO' PROBLEMS!)
Specialty + Actual Labor + Time Investment = PRICE
THE GOAL: to price in a way that takes into
account the variables and sliding scale of complexity that is inherent with the unique nature of the special event industry
THE GOAL OF CORRECTING PERCEIVED VALUE:
Sell the product/service to clients in a way that is both easy to wrap their minds around and also sells clients on what creative value is truly worth
THE PRICING SOLUTION
DESIGN FEE
PRODUCTION FEE
EVENT MANAGEMENT FEE
Flat fee that is also the retainer fee paid in full at the time of contract signing
Percentage taken on the cost of all contracts over the length of the project
Flat fee that is commensurate with the going rate of event management (a.k.a "day of"/"month of") services
DESIGN FEE
This is where you set yourself apart from the crowd!
Event Planner
Planner/Designer
Event Designer
Designer/Planner
PRODUCTION FEE
This is where the rubber meets the road!
Percentage taken on the cost of ALL contracts over the entire length of the project
Whether contracts were first arranged by client or by you does NOT matter
Exception: anything that does not affect the complexity of your level of involvement
2 things that I can think of: dress and stationery (unless I am involved)
12%
15%
Production Fee
Remaining 50% is paid no later than 2 weeks out from event date
Taking into account any
minor
changes
to suppliers bids
This is when final head count is due to caterers, thus no significant changes can be made after this time

EVENT MANAGEMENT FEE
This is due 30 days prior to event date
Goes toward paying for your staffing/labor/payroll/your time spent on the day of the event, prepping timeline, confirming vendors, etc.
By this time, you can calculate with certainty how much staff you need for the day of
Flat fee ranging between $2500-$3500 for a typical event, one location, 150 guests. This cost should be relatively stable across markets
The perceived value of this service NEEDS to change!
PUTTING THE FEE STRUCTURE INTO PLACE
Step 1: Determine your number = how much you should charge per event


A) How much do you want to make per year (your salary)
B) What are your fixed costs, overhead, tax, etc.? Add this to your desired salary
C) Determine your capacity (how many events can you feasibly do in one year/ do you
want
to do in one year?)

Step 2: Do the math
A + B ÷ C = your "number"
NOTE: this is NOT what your flat fee should be for each event! We have to go one step further!
STEP 3: APPLY THE FEE STRUCTURE
Example 1:
Let's say $10,000 per event is your number
Let's also say your average client spends around $40,000 on a wedding
Your design fee =
You take a 10% production fee =
Your event management fee (standard) =
$3,000
$4,000
$3,000
$10,000
STEP 3: APPLY THE STRUCTURE
Example 1:
Let's say $10,000 per event is your number
Let's also say your average client spends around $40,000 on a wedding
Your average fee per event =

Your capacity is 8 weddings a year =

Your annual revenue =

Then back out your costs =

Your salary=
$10,000
X 8
$80,000
- $30,000
$50,000
STEP 3: APPLY THE FEE STRUCTURE
Example 2:
Let's say $10,000 per event is still your number
Let's also say your average client now spends around $80,000 on a wedding
Your design fee =

You take 10% production fee =

Your event management fee (standard) =
$6,000
$8,000
$3,000
$17,000
YES! IT'S TRUE! YOU ARE WORTH THIS!!!
STEP 3: APPLY THE FEE STRUCTURE
Example 3:
Let's say $10,000 per event is still your number
Let's also say your average client now spends around $250,000 on a wedding
Your design fee =

You take 10% production fee =

Your event management fee (standard) =
$10,000
$25,000
$3,500
$38,500
SUPER YAY!!!
STEP 3: APPLY THE FEE STRUCTURE
Example 3:
Let's say $10,000 per event is still your number
Let's also say your average client now spends around $250,000 on a wedding
Your average fee per event =

Your capacity is still 8 weddings a year =

Your annual revenue =

Then back out your costs =

Your salary =
$38,500
X 8
$308,000
- $30,000
$278,000
KEY THINGS TO KEEP IN MIND
You have to determine WHO your target
market is and hone in but don't
let the market or your competition
dictate your value
Only YOU can determine
what you are worth!
Next step: do your homework on
how they spend
Study
why
your target clients
buy services in other industries and
learn how those industries calculate
their fee structures
Remember that YOU are not your client!
Don't hesitate to price yourself
this way because you personally would
not spend $17,000 on a wedding planner
HOW TO SELL THIS TO CLIENTS
This is where knowing how your client buys comes into play
"LUXURY" MARKET
Build Houses
Architect
General Contractor
Interior Design
FREQUENTLY ASKED QUESTIONS
How do I know you aren't going to jack up the invoices so that your percentage is higher?
Putting a minimum price on website--is it worthwhile?
What questions do you have for me?
Instagram, Snapchat, & Periscope:

@sapphireevents

Email: valerie@sapphireevents.com

www.sapphireevents.com

1) Every event is inherently unique,
posing different challenges and
various demand levels of clients


Creatives
lose
when charging
one flat fee in the beginning of the client relationship before beginning to
understand what the clients
really
want
2) Flat fees undervalue the
sacrifice and level of service we are
delivering on the most important
day of our clients' lives
18%
20%
22%
50% of the production fee is paid at the time client approves design plan
No later than 3-4 months out from the date
Based off of projected costs calculated from your suppliers proposals
Gauge overall cost, then calculate Production Fee (projected), then client pays half before you launch into production stages
Flat Fees
Percentage with a Minimum
Great for compensating for the scope of work
Misses the boat on what lies between your ears
It is up to us to educate the market on the true value of our services to correct this value perception
Scaling your business and service offerings
TWO SERVICE LEVELS IN PLANNING
Event Management
Planning and/or Event Design
"Day Of"
"Month Of"
"Partial Planning"
become obsolete terms of art
"Full Service" becomes obsolete as a description
THREE PIECES OF THE PRICING PUZZLE
1) You have a
specialty
that you develop over the course of time
investment in continuing education/honing your craft
relationships built with other creatives (reputation)
your own personal opinions/perspective
Things we know for certain, we charge a flat fee
2) There is
actual labor
involved to execute the event itself and to deliver your service or product
payroll (number of assistants, plus your time on the day of)
the routine systems in place for making it happen (timeline development, vendor confirmations, etc.)
Things we don't know for certain, we charge a percentage for
Reading suggestion: "Breaking the Time Barrier," Mike McDerment
$100 x 15% = $15
white vs. ecru paper
flat printing vs. thermography
no envelope liner
$1000 x 15% = $150
8 ply vs. 12 ply
beveled and/or gilded edges
letterpress vs. engraving
boxed enclosure with specialty stamps
THE GOAL: to price in a way that compensates us for our "special sauce" and the unique product/service that only we can offer
THE GOAL: to price in a way that covers that actual labor, staffing, man hours going into the physical execution of the deliverable
Flat Fee
Percentage
PLUS
(what it takes to get you out of bed in the morning to do what you love)
number of assistants x their day rate, plus
your hours for execution on the day of, plus
any additional labor costs, set-up, strike etc.
(yes, ALL contracts, not just decor items)
The value of the design fee should reflect what services you bring to the table
Logistics
= $
Logistics + Design = $$
Logistics, Design + Florals = $$$
Logistics, Design, Florals, + Decor items = $$$$
"I'm not expensive, I just cost a lot."
Sean Low & Big Pun
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