Economic slowdown or recession? Soft landing, hard landing or crash landing? Pick your terminology; the bottom line is that the economy ain't what it was. As a business owner in the event industry, you need to prepare for the changing economic climate. Here are tips on how to guide your business through these uncertain times.
1. Increase your social clientele
Social events, particularly right-of-passage events such as weddings and bar mitzvahs, tend to be fairly recession-proof. Events that happen once in a lifetime (we hope) simply aren't shelved until times improve or a client has more bonus money to spend. People often save for these events over a number of years, and a recession will not stop them from happening.
2. Go after corporate sales events
Follow the money. A company can cut back on a holiday party without affecting its bottom line much (though morale will suffer), but the last thing it wants to do is eliminate a client conference, trade show, sales incentive, product launch or any other event designed to help bring in revenue.
3. Explore outsourcing
In-house meeting/event planners spend money for a company, not make it, so when organizations tighten their belts, they're probably among the first to go. Yet many of the events they handled will continue, although some will be scaled down. Who will plan them? Find that person, and offer your services.
4. Offer value
In a down economy, everyone loves value. While the catch phrase might have been "How can my event stand out from the others?" now it's "How can I show my boss I'm saving money?" Value is the perception that you're getting a good deal, regardless of price. Two hundred dollars a night is great value at a Four Seasons Hotel, but it's highway robbery for a Motel 6. Show your clients ways to save money on their events, and you'll build great loyalty. This doesn't mean you have to cut prices. It simply means you need to be creative in suggesting alternatives. Change the summer outing from a country club to a picnic. Show price reductions for slower times of the week or year, or higher guarantees, or book multiple events at the same time.
5 Be discreet
Many clients want to project a perception of frugality, even if they're rolling in money. It might not be considered in great taste to serve caviar at a function, for example, if the company just pink-slipped the back office. Design your events with good, smart taste, and spend your client's money prudently.
6. Watch expenses
When the economy was booming, many business owners got giddy with expansion plans, often green-lighting expenditures without seriously evaluating how the plans would pay for themselves. Now every major expansion expenditure should undergo rigorous analysis.
7. Go for the jugular
While most businesses are battening down the hatches, a few brave companies will see this as an opportunity to get a leg up on their competition. This might be a good time to overhaul your inventory or upgrade key rental items. Sure, you might not be as flush with cash as you were in years past, but neither is your competition. The advantage you build up now might be difficult for competitors to surmount later.
8. Keep your staff working
In slower times it pays to take on as much work as you can, even at lower margins, to keep your staff working and loyal. This also helps preserve any volume discounts you get from suppliers.
Howard Givner is founder and president of Paint The Town Red, a New York-based special event firm. He can be reached by phone at 212/677-3173, ext. 223, or via e-mail: [email protected].
