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Question DetailsAsked on 10/31/2016

what is a start up price beginner decorators such as churches or venues

I am gifted in decorating want to decorate for parties birthdays wedding churches but don't know where to start with pricing.I don't know where to begin to charge. I have done a couple churches but Im really just getting myself out there with portfolio. I don't want to over charge or under charge. The charges has been small and the parties have been to. But it was very elegant everyone loves my work. So now want to take it a step further and see where this can go. Can you give me some advice please

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You could google for comments and reviews about such services and the amount paid for them - web is probably full of people commenting on what they paid for party or event decorating and management.

Start with what it takes you to cover your costs and a fair profit - the consumed materials cost and a fair labor rate (I would guess about $15-20/hr for a beginning person, more like $30-50/hr for an experienced person or multi-employee company owner in this field) - then figure a multiple to account for overhead costs. (Overheads commonly run in the 50-100% range for labor-intensive businesses that do not require a lot of equipment or specialty vehicles).

Be sure to account for not just the setup/teardown work, but also the planning and prep time. And decide if you are going to be the decorator or docorator and caterer, and also if you are just doing the mechanics of the decorating or if you are actually going to be the "event planner" also - providing invitations, seating arrangements, cloakroom attendant, servers (drink and/or food), etc.

You can google for overhead factors - but those include building/facility costs, vehicle / liability / health insurance, bonding costs if bonded, any retirement plan, any employer-paid labor overheads like unemployment / employee disability taxes and social security/medicare taxes, income taxes, local business property or gross receipts or sales taxes (though sales taxes are usually added as an itemized item on the bill), professional/business license costs, accountant / tax preparation costs if not doing that yourself, vehicle costs including maintenance and fuel and depreciation, specialty equipment or racks or carts or furniture or such (including ladders or man platforms possibly in your case if doing church decorations and such or house outdoor decorations), contingency for underbidding or jobs you aren't able to collect payment for, time value of money tied up in inventory, inventory wastage (things overbought and not usable on future jobs or which go bad/unusable before use or made useless / wastage in the course of use), cost of investment (time value of your investment in business, allocation of cost of business loans), set-aside for minor damage fund to reimburse clients for damage to their property from your services (spills, tape marks or tape pulling paint, accidental broken window during setup/takedown - basically anything too small to be covered by insurance), etc.

For your sort of business, even though not all the materials bought for a job will be used on the job (always some leftovers here and there) trying to count most of those as "inventory" can be a lost cause - you end up accumulating more and more that may not get used for years. Usually for your type business you would "stockpile" or inventory a fairly minimal amount of materials or supplies, bill out the entire cost of everything you buy to use on a job against that job, and just count any leftovers as "scrap" which you may use on a future job, but do not inventory or count as "in stock" unless substantial like entire bolts or rolls of materials.

For seasonal materials it is a tough choice, if doing that sort of decorating service - also things like fake flower arrangements and temporary potted plants (if you don't rent them) and such. You can maintain an "inventory" and charge out a certain portion of the cost on each job - certainly an item-by-item inventory would be a major time consumer to keep up on, but you could form categories like potted plants, fake flowers, halloween docor, xmas decor, tropical theme decor, wedding decor, etc and bill out a percentage of current inventory on each job and increase the valuation of each category of inventory when you add new items. This can quickly get out of control if you get too detailed, given the relatively small value of the individual items you buy and use - and means you are tying more of your money up in inventory. It does mean, however, that you will not be charging the first customers the full cost of the materials you use so your fee can be lower for them getting started. It does however mean that if you buy specialty materials for a specific job you either have to add those items as direct charges to the customer or at least charge a % based on how often you think you will reuse those items.

You will have to account for inventory however - and value of supplies - for supplies and for tools/equipment, so look into the requirements about that and ways to handle the valuation and writeoffs, both for income tax and for proeprty tax (if applicable in your area) purposes.

I suspect most vendors in your business line direct charge almost everything directly to the client/job, and figure anything thaat comes back to you (in the course of cleanup) is unallocated "scrap" you may reuse but is already fully paid for. Of course, if your pricing includes cost allocation over multiple jobs then the contract needs to make clear that anything you ARE counting on reusing is taken back by you at cleanup, and you need to make clear in the contract what items are available for the client/guests to retain. Things like fresh flowers obviously you do not intend to get back but maybe the vases ? And some items like table centerpieces (and especially individual place setting decor) you will probably assume will vanish during the event, but be careful about what you assume is coming back to you. Things like potted fake flower arrangements or fake plants (like for a tropical theme) that you count as "stock" or "props" the client or guests may assume are theirs for the taking at the end of the party, or perhaps a food provider may take some of your place setting or decor bases or platters or such with them thinking they were theirs - so you need to make clear what is your property and what is staying in the contract.

Plus don't forget profit - though many self-employed people commonly (at least initially when getting started) they figure their pay is their profit - or they do not figure a personal wage and just figure any profit the business generates is their "pay". This can be a major mistake because it makes the business more like a slightly profitable [hopefully] hobby and does not account for the fact you need to be compensated for your time to cover your personal living expenses and saving for retirement and college funds and braces funds and such. You should be paying yourself from day one - and if the business does not support that then you need to up the income level or reconsider whether the business venture makes sense and maybe you should hold down a more conventional job. Of course, when getting started, it is quite likely that you will need a "day job" anyway to cover your bills - perhaps part-time at soem flexible hour location. That may be an issue right off, because for your type business you need flexible hours for when the event is and when setup/cleanup time is available, so fitting that in with a regular job's demands for work hours may be a significant issue.

Oh - and assuming this will be a sole proprietorship initially, become familiar with the rules for IRS 1040 Schedule C and equivalent state/city income tax forms - and some of the things you can write off against the business too (if profitable) like personal vehicle usage and depreciation and health insurance coverage.

And don't forget licensing requirements - business license at a minimum, possible an event planner license or permits, possibly food service certification and licensing, liquor serving/establishment license, etc. And become familiar with fire code requirements on decorations - public accessway clearances, fire resistance of decor, limits/safety measures related to anything using open flame (candles, incense, food warmers and cheese pot warmers), use of extension cords anbd GFCI requirements, not blocking emergency exit signs or emergency lighting or windows in doors, etc.

One other thing - may sound negative, but important - when operating as an individual proprietor you have personal liability in the event of an accident (guest/client tripping, falling, getting burned by hot food or candles or such, allergic reaction to foods or decorations or flowers or candles or pot pouri type decor etc, injured by falling or low-hanging items or ladder or such during setup, etc) - so definitely have liability insurance, minimum $1 million and probably double or triple unbrella that to be on safe side. For a small one-peson outfit you can sometimes add this onto your homeowner's insurance, and as you grow or company becomes formally an LLC or corporation or whatever then is part of the firm's insurance coverage.

And as soon as the company gets on its feet (if not immediately), consider converting to a limited liability company or corporation if you don't start off with that right off the bat - to isolate yourself more from the company's liability. Far too many sole proprietors go decades without any problems, then late in life get their livelihood and retirement funds and sometimes even lose their house due to a liability claim related to their business.

One other suggestion - subscribe to and READ a magazine specializing in your type of business (venue/function decorating). INC magazine is also an excellent source of info on setting up and running and growing a business - sort of like the MONEY magazine for small business owners. And stay up to speed on the decorating/arts and crafts side of Pinterest - because I would bet you will get a LOT of clients wanting something trending that they saw on Pinterest and similar sites.

Oh - one other thing that is IMPORTANT - set up separate eMail account and preferably dedicated phone line (can usually be routed to your personal phone for free except long distance) so your personal communications are not intermingled with business. Also lets you "turn off" business calls without having to turn off personal/family calls when you want/need to.

And consider, when coming up with a company name, potential future growth and diversification - so a more generic type name rather than something very specific to your current interest might be an idea. For instance, Barb's Party Decorating is pretty personal (small) sounding and specific and limiting (in terms of people scanning for vendor names), whereas Davis Event Services could be more professional and capable sounding and inclusive of future expansion to event planning, catering, etc if you go that route. Or, though it reduces eye catching for people scanning through company names looking for a specific service (though with Google to search by service offerred that is less important today) a name like Davis Services is even more generic and could be inclusive of any number of types of service - including making/selling of party products, running a party/event goods store, interior decorating, etc.

Depends on how much expansion you think is possible or how ambitious you are - but a lot of new companies are too limiting and end up having to rename themselves as they grow and offer more services, which can result in sacrificing some of your name recognition - plus having to keep the old name active in phone directories and on the web for people to "find" when searching by that name from a prior contact, so they can still find you under the new company name. Also affects eMail and website addresses, which you want to retain as stable as possible forever, otherwise you end up having to keep several web addresses active just to provide a good link or automatic forwarding to your new one.

Couple of other similar questions links here FYI -

Answered 3 years ago by LCD

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