How to Wreck an Event Planning Company

Six worst practices to avoid while running a business

Education opener Mar 2015

The ebb and flow of the events industry brings many obstacles that keep event management companies, especially those just starting out, from taking their businesses to the next level. By focusing on flexibility and quality control, your company will be able to adapt to change and thrive. I speak from experience -- from organizing social events such as galas and weddings to managing large-scale corporate functions and concerts, our company, Jimmy Jam Productions, faced its share of challenges during the economic downturn. Here are some missteps we learned to avoid along the way:

1. Growing your business too fast.
This is a common mistake many new businesses make. Once business begins coming through the door, many entrepreneurs are reluctant to let it walk back out again. But sometimes that's the best move a new event management company can make. It's important to view growth as if it were a line item in your budget that needs to be carefully managed.

Don't be afraid to turn down an event. Spreading yourself too thin, especially when you're just starting out, can add stress to your staff and make you vulnerable to mistakes that can impact your reputation -- and that can impede your ability to take on future clients.

2. Trying to own everything.
One common mistake small business owners make is trying to own every piece of equipment necessary to run the business. That usually results in crushing overhead that makes it impossible to turn a profit.

Optimize your equipment inventory for flexibility. Our inventory is sufficiently stocked for our needs and we utilize our resources during peak seasons. For example, rather than have the overhead of a large fleet of vehicles that would go unused part of the year, we've partnered with Enterprise Commercial Trucks to rent large vehicles on an as-needed basis, allowing us to significantly control costs.

3. Being loyal to your partners -- no matter what.
Loyalty definitely has its place. No business can survive without customer loyalty and great relationships with B2B partners. But just as you sometimes have to turn away customers because the situation isn't right, you also have to evaluate your business partners to make sure the relationship remains a positive one. And if it turns sour, be prepared to leave and form a new partnership. We update our vendor list periodically to ensure we're getting a competitive price. In one instance, we saved hundreds of dollars on our truck insurance thanks to a referral from Enterprise Commercial Trucks Remarketing Manager Michael Marion.

4. Being a lone wolf.
Running a business is time consuming. There are a lot of balls to juggle, so who has time to participate in industry organizations? If you want to increase your chances of having a thriving business, you should find the time. The National Association for Catering & Events, for example, helps us not only to identify new business leads, but also share best practices and find valuable resources in the event industry.

5. Crushing the competition.
That might be a good strategy for some industries, but not for event management. This is a service-oriented field, and more often than not, it pays to have friends on whom you can rely. So, play nice with the competition. I'm friends with the owners and the staff of most of our competitors. In fact, we've stepped in to help their companies in a pinch and we often share equipment with each other.

6. Being the rainmaker.
It's one thing to make it rain, but try to be a hurricane and you'll find out that it's the fastest way to have your company wiped out. If you're a small-business owner, everybody you know has a son, a daughter, a second cousin, or a friend of a friend who needs a job. Remember, it's not up to you to solve the unemployment problem. Keep your staff nimble -- and professional. We have a remarkable core staff that we supplement with reliable contractors to help us manage fluctuations in demand. For example, labor companies such as HospitalityStaff work with our team for load-in, set up, and teardown of events.

I know that avoiding some of these pitfalls may create awkward situations, but owning a business is not for the faint of heart. If you do what it takes to sidestep these obstacles, your business might just have a chance to survive and thrive.

James Conway, is the owner of Jimmy Jam Productions, an international event planning and production firm based in Miramar, FL.

This article appears in the March 2015 issue of Successful Meetings.