Read the image all the way, so you get the point. A popular idea in event planning is costs plus 20%. Can I charge 20% on top of costs? I have had this question before and my answer is you can do what you want. I would respond back to you with another question. How much are you leaving on the table by not charging what the market bares? After you thought about that question, I would ask, do you think you may be missing opportunities because your margin may be too high?
The point is you need to know what your market is charging. You may be missing opportunities because of pricing. 20% can sometimes be a good benchmark; however there are markets that are less than 20%. You also want to consider the price of what you’re charging even if the market is higher and you are charging 20%. If you are doing corporate events, you don’t want to be perceived as cheap. Cheap is not always synonymous with value.
You can be slightly less than your competition, but there needs to be a justifiable reason why. If you have gone through the process of creating products and services corporations want from an event planner/DMC and present yourself professionally, you may want to price your services pretty close to the competition.
Don’t get trapped in the 20% margin thinking that is a standard. Its not, in event planning or any business you need to do market research. Can you see beyond 20/20?