7.1: Introduction

Pricing and costs are two elements of your new business which are inextricably linked.

You won't be able to determine how much you should charge for your shows, or how much profit you will make from each one, without having a firm understanding of your outgoing costs. Each and every business in the world needs to keep track of their income and expenditure in a coherent, logical and comprehensive manner in order to be successful.

As your business's owner and sole employee, you will be entirely responsible for logging all of the income and expenditure for everything regarding your business.

This doesn't have to be difficult; you can set up a very simple spreadsheet to keep on track of it. You will just have to be very organised when it comes to making sure that every tiny transaction, however small, is recorded so that you always have an accurate and up to date record of your finances. This way, you will always be able to review how much you are spending and how much you are earning to check and see whether you have a profitable business.

If you find that you are barely covering your costs, or that you are actually losing money, it might be time to restructure your pricing strategy and to have a look at whether all of your costs are entirely necessary.

7.3: Pricing

The best way to go about determining your pricing is to look at what other people in the business are charging for their events.

You should always aim to charge slightly less than this as when you are setting up you won't have the reputation to support you, but being cheaper than another entertainer will still give potential clients a reason to hire you. Obviously, whatever price you choose, you must make sure that it more than covers your costs for the event. Otherwise you will not last very long in the business at all.

Offer your services for free in return for helpful, constructive feedback. For your first few real clients, you can ask them to give you what they think that the performance was worth after you have finished your show, rather than charging a flat rate from the offset. This can give you a really good idea about how much people are willing to pay for the services that you can see.
You can go about pricing in different ways. The easiest one is to establish a package deal which lasts a fixed amount of time and includes a given number of balloon modelling elements. Write out a couple of party plans, detailing what they would include in terms of both entertainment and equipment, and set a fixed price for each of those plans. Make sure that these are clearly laid out on your website so that potential clients know exactly how much everything costs.

If you do a party which is 2 hours long, you should make sure that you charge less for the second hour than you do for the first one. For example, if you decide to charge £75 for a party which lasts one hour, you should charge less than £150 for a party which lasts 2 hours. This is because the second hour won't cost you as much as the first one as you will have already paid for your transport to attend the event. This will make people feel that booking you for 2 hours is a better deal, and you are likely to earn more money as a result.

You should have a different rate for events where you are not the sole entertainment provided. If it is something like a summer fete or a wedding reception, where you will be wandering between the guests and performing to small groups at a time, then you should set a different price for this than for a children's party. As a general rule, entertainers usually charge considerably more for events aimed at adults than they do for the ones aimed at children. This is because adult events usually have a much higher budget than people are prepared to spend on a children's party.

You can also change your pricing structure depending on when the event is booked for. Your standard prices should reflect how much you will charge at the busiest times (e.g. evenings, weekends and school holidays), but you can offer a discounted rate for anyone who wants to hire you during the week.

You will also need to look at how much it costs for you to build each balloon model if you are planning to sell them individually at any point. If you go into the centre of town to sell individual models for an afternoon, you will need to know exactly how much each one costs you so that you can set a price which is well above this.