Call Us: 1-800-504-7615

Money Talk: Where to Start When Starting a Business

Jul 16 / The IWED Blog

Financial Planning for Starting Your Event Design Business

Starting an event design business and decorating weddings and events is an exciting venture, but it requires careful financial planning to ensure success. With over 10 years in the industry, I've learned that smart budgeting and strategic planning are crucial for the survival and growth of any new business. Here's a guide to help you navigate the financial aspects of launching your event design business.

The Importance of Financial Planning

Financial planning is the foundation of any successful business. It helps you understand how much money you need to start, where to allocate your resources, and how to manage your finances effectively. Proper financial planning ensures that you can cover your expenses, invest in growth, and weather any financial challenges that come your way.

Budgeting Realistically

Creating a realistic budget is essential. Start by listing all potential expenses, including:

Initial Costs: These include business registration, licenses, insurance, and any legal fees.

  • Equipment and Supplies: Consider the cost of tools, decor items, software, and other necessary equipment.
  • Marketing and Promotion: Allocate funds for building a website, business cards, and other marketing materials.
  • Operational Costs: These include rent for office space, utilities, and other ongoing expenses.

It's crucial to be thorough and realistic when estimating these costs. Overestimating can tie up funds unnecessarily, while underestimating can leave you short when you need money the most.

Tools and Resources for New Business Owners

Fortunately, many tools and resources are available to help new business owners, especially online and free options. Here are some valuable ones:

  • Business Plan Software: Tools like LivePlan and B plans offer templates and guidance for creating a comprehensive business plan.
  • Accounting Software: Free or low-cost options like Wave and QuickBooks Self-Employed can help you manage your finances, track expenses, and generate invoices.
  • Budgeting Tools: Apps like Mint or YNAB (You Need A Budget) are great for personal and business budgeting.

  • Online Courses: Platforms like Coursera, Udemy, and LinkedIn Learning offer courses on entrepreneurship, financial management, and marketing.
  • Small Business Associations: Organizations like SCORE and the Small Business Administration (SBA) provide free mentoring, workshops, and resources.

Starting Capital and Overhead Costs

Having sufficient capital to start your business is incredibly helpful. It allows you to invest in necessary equipment, marketing, and initial operational costs without the stress of financial strain. Here are some tips on managing you starting capital and overhead costs:

  1. Bootstrap Your Business:  In the beginning, try to keep overhead costs as low as possible. Work from home or a shared workspace, instead of renting or leasing an expensive office. Use free or low-cost software and tools if you can. Consider renting equipment instead of buying it outright.
  2. Avoid Unnecessary Expenses:Be cautious about spending on things that aren't essential to your business’s immediate success. For example, expensive office furniture or high-end technology can wait until your business is more established.
  3. Invest Wisely: Spend money on areas that will directly impact your business growth. Marketing, for instance, is crucial for attracting clients. Invest in a professional website and high-quality marketing materials.
The most expensive part of running an event decorating business often varies based on several factors such as location, scale, and specific services offered. However, some of the most significant expenses typically include:

  • Inventory and Supplies: This includes purchasing and maintaining a wide range of decor items such as linens, centerpieces, lighting, furniture, and floral arrangements. High-quality and unique items can be particularly costly.


  • Labor Costs: Hiring skilled staff for design, setup, and teardown of decorations can be expensive. This includes full-time employees, part-time workers, and any freelance or subcontracted help.


  • Storage and Transportation: Renting or owning space to store inventory and the cost of transporting items to and from event locations can add up, especially for larger businesses with extensive inventories.


  • Marketing and Sales: Promoting the business through advertising, maintaining a website, social media marketing, and participating in bridal shows or industry events can be a significant ongoing expense.


  • Insurance and Permits: Liability insurance, worker’s compensation, and any necessary business permits or licenses are essential and can be costly.


  • Office and Operational Costs: Rent for office space, utilities, software for design and planning, and other operational costs are also a considerable part of the budget.

Investing in high-quality decor and providing excellent service can also increase repeat business and client referrals, helping to offset these costs over time.

The Benefits of Budgeting Effectively

Effective budgeting helps you allocate resources where they are needed most. It ensures that you can cover your expenses, invest in growth opportunities, and build a financial cushion for unexpected costs. By keeping a close eye on your budget, you can make informed decisions that contribute to the long-term success of your business.

In an event decorating business, several inventory items require significant financial investment. The most expensive items typically include:

  • High-End Furniture and Specialty Pieces: Luxury furniture like custom-made sofas, lounge chairs, dining tables, and unique statement pieces can be very costly. These items are often used for upscale events and need to be durable and stylish.


  • Lighting Equipment: Professional-grade lighting, including chandeliers, uplights, spotlights, and LED fixtures, can be expensive. High-quality lighting is essential for creating the right ambiance and is often a critical part of event decor.


  • Floral Arrangements: High-quality, fresh flowers, especially for large installations like flower walls, arches, and centerpieces, can be a significant expense. Preserved and artificial flowers of high quality can also be costly but offer longer-term use.


  • Custom Linens and Drapery: Custom-made linens, tablecloths, chair covers, and drapery in various fabrics, colors, and designs require substantial investment. These items need to be kept in pristine condition, necessitating professional cleaning and maintenance.


  • Decorative Props and Structures: Items like arches, backdrops, photo booths, and other large decorative structures require a significant upfront investment. These pieces are often custom-built and designed to be reusable for multiple events.


  • Audio-Visual Equipment: High-quality sound systems, projectors, screens, and other AV equipment are crucial for many events and come with a high price tag. Investing in reliable, state-of-the-art equipment ensures smooth event execution.

These items represent a considerable portion of the initial and ongoing investment in an event decorating business. Proper maintenance and storage are also essential to ensure the longevity and quality of these expensive inventory items.

Conclusion

Starting an event design business requires careful financial planning and smart budgeting. Utilize the available tools and resources, manage your starting capital wisely, and keep overhead costs low in the beginning. By doing so, you'll set a strong foundation for your business to survive and flourish. With proper financial management, you'll be well on your way to building a successful and sustainable event design business.

Get all the info you need to start your business and learn from the experts at IWED. 

Our hands-on training programs teach you not just how to design, but how to sustain a design business. When it comes down to it, you need the skills and the business knowledge to make sure this is a viable career you can launch and maintain on your own.

Enroll in our signature program, Accredited Event Designer, and learn everything there is to know about launching your very own event design business!