Pricing yourself competitively is tough for most business owners, especially when you’re in the event venue business. When you set your prices, you need to include everything that a client will receive, both leading up to their event and on the day itself. In other words, you have to charge what your business is worth. That includes your expertise as an event manager, as well as all your venue’s extras like seating and catering.
At the same time, you’re venue’s pricing plan is also at the mercy of factors you can’t easily change. Things like your location, competitor’s prices, and even your venue’s capacity will naturally limit how much you can charge for your services.
Read on for ways you can establish accurate, fair, and profit-oriented pricing for your event venue.
Price Your Market
The first step in evaluating your pricing is to research your competitors and potential clients. While this is true for every business, you’ll need to take special care to price yourself slightly lower than the competition. At least in the beginning.
It’s also important to look at what the average income levels of individuals are in your area. If most people are pulling in $30k a year, you probably can’t get away with charging $10,000 for a single day’s event no matter how gorgeous your space is. Alternatively, if you’re in a wealthier community, don’t be scared to charge more for your venue because you’re worried clients will look elsewhere.
Identify Your Strengths
Figure out what makes clients choose your venue over your competitors. It won’t always come down to the single fact that you’re charging less. Identify your strengths by asking yourself what makes your venue different. Do you offer exemplary event management on the day of the event? Are you combining services that guests would otherwise have to hire two or more companies to acquire?
If renting your venue removes the requirement for additional deposits, fees, and tips from the shoulders of your clients, you’ll find that they’re often willing to pay a little more. For more ideas on how you can set yourself apart while giving the most value to clients, check out professional organizations like the International Association of Venue Managers or the National Association for Catering and Events. They can provide you with ideas and rate suggestions based on what you do best.
Listen to Client Comments
If you’re consistently hearing your clients say things like, “I would have paid $1,000 more for this place,” after signing a contract, it’s time to raise your rates. Listening to the feedback that your clients are already giving you regarding your pricing is a smart way to figure out how much your rates can grow in the future.
Just because you started out charging lower for your services doesn’t mean you can’t raise rates if they’re not serving you. You’re not betraying your clients or tricking them into paying for your venue. You’re offering quality services and a specialized space for meaningful events that foster human connection and grow community. That’s important and shouldn’t be disregarded through charging clients less than you’re worth.
Switch Up Pricing
Don’t be afraid to offer deals or different pricing plans for packaged services. It’s not uncommon for venues to offer a discount during their typical off-season to entice clients to rent their building. Your clients feel like they’re getting a great deal, and you’re able to maintain your income stream through a tough time of the year.
When organizing different price packages, you might find that clients appreciate, and are willing to pay more for, certain aspects of your venue. Figuring out what people want, and are willing to pay for, is a great way to better understand your clients and work harder at the aspects of your business that people love most.
To help you establish price packages, evaluate the amount you’ll charge against the time and resources that make up each package. Make sure to factor in things like replacement cost of furniture and fixtures and staffing for the event. Create a variety of packages with different services that you know your guests will use.
Ask for Help
The event venue industry is huge. According to Lending Tree, the event venues generated an impressive $325 billion in direct spending and $845 billion in business sales. All while employing an estimated 5.9 million people. What’s more, the U.S. Bureau of Labor Statistics estimates that the industry will grow by 7% between now and 2026.
That’s a lot of competition and a lot of potential income to manage. Finding an experienced accountant or CPA to run your numbers every month and provide financial support can help you unlock your potential for growth. A CPA can also use financial reports, like profit & loss statements, to uncover how much money you’re spending every month and determine the rates you need to set for long-term success.