Small business advice needed... or something!

[Princesca]

So... I'm one of the chronically unemployed in this recession. I lost my last official full-time, permanent job back in spring 2009. Almost immediately, I identified a contract opportunity for a one-year project with a non-profit, so I took that, even though it was a huge step back in salary and didn't come with benefits. There were certain other perks, like getting to work from home, more or less on my own schedule. Anyhoo, that ended back in July 2010. I've been looking since then, working a VERY part-time job just to have something to do, and am lucky to still be in receipt of unemployment insurance, and to be married to a guy in IT whose company provides generous benefits.

Because this economy is so bad, and I am in a very niche field that makes it hard for me to find work, I have been kicking around the idea of starting a home-based business doing children's parties. I have planned parties here and there in the past, and everyone always gives them rave reviews because of my attention to detail, etc.

I think this work could be started with a fairly small start-up cost, and I was thinking about maybe even contacting a couple of local tea rooms to see if they'd be interested in using me as sort of commission-based planner, where they provide the facility and the food, and I would organize the parties, do the invitations, plan the party games, bring dress-up gear, favors, and so on.

I'm posting this on the off-chance that someone else here does this sort of thing, or knows someone who does, and would be willing to chat with me a little about it.

Thanks

 

[Sadie22]

The wahm.com and workplacelikehome.com forums have folders devoted to these businesses, so you could read there, too.

 

[akcire]

Here is the problem I see.

Generally party planners are paid a percentage. My husband's office throws a $20,000 holiday party--the planner gets 10% or $2000.

I can't see very many kids parties being thrown with budgets larger than $500--and I don't think you are going to be happy planning it for $50 or $100.

 

[Princesca]

Generally, what I've seen in terms of price is that the party planner (now this is holding the party in someone's home) charges $250-$400 per party depending on size, type of party, and what part of the country you service.

Expenses would be fairly reasonable, with an up-front cost for dress-up stuff, a good plastic tea service/dishes/etc., and web/print advertising. Food at these things is usually fairly simple to account for kids' tastes... usually I've seen mostly apple juice, or a lightly-sweetened, caffeine-free herbal fruit tea, or something of that sort, and 2-3 selections of basic sandwiches, cookies, tarts, sorbets, etc. Then the cost of favors, invitations, and so on.

I think I could probably make at least $150-200 per party, as a conservative estimate, but obviously that goes down if I have to pay a place to let me host it there... so you're right, that's probably not the best idea. Eventually, I'd love to find a small store-front to use for a permanent location, but I was figuring on starting in a more "mobile" way.

Ideally, I'd love to run a tea room, but that involves a much bigger start-up cost that I can't afford right now, so I thought I'd start with something that requires a little less start-up capital.

 

[TinknBellesMom]

Generally, what I've seen in terms of price is that the party planner (now this is holding the party in someone's home) charges $250-$400 per party depending on size, type of party, and what part of the country you service.

Do you think people in your area could support this price range? I know in ours (Upstate NY) this would be considered a very expensive party and I don't think many people around here could afford that given this economy. Most places that do birthday parties around here are b/w $100 and $200 and then you don't have to worry about clean up (before or after.)

I would call some local places and see what they charge for birthday parties. Then maybe you can see if you can create a niche market.

 

[Princesca]

You're right - I definitely need to do some actual, official pricing. This is just my gut based on the price of comparable things I've seen over the past several years.

I think there is enough of a market here to support those prices... that's my hunch. But it would definitely be better to turn that hunch into fact.

 

[Reddy]

A friend comment on her DD going on a spa party - they got manni's & pedis, got to wear robes & had tea -- thought it sounded cute

 

[TinknBellesMom]

I had another thought, I would also check on the party place's availability. Just because they charge a certain amount doesn't mean that they're getting actual bookings too.

Good Luck! We own our a business and it's definitely stressful, yet rewarding.

 

[Irin997]

I think this is a perfect opportunity....IF you had your own location. But that's probably the only way you could make it work.

 

[Princesca]

Well, I could probably rent a place for relatively cheap in this economy, so I may look into what that would cost. When I'm just starting out, I might even be able to find a cheap place to rent per-time, instead of per-month.

I just think it sounds like it would be fun (though I certainly recognize that it would be a lot of hard work, too). I am also in the convenient position of having significant career experience in finance and public relations, and my husband is an IT guy and former web designer. So I wouldn't have to go outside of the family for much of that sort of thing.

I'm also pretty tired of corporate life, and I think this would be a good fit for me.

One other thing I've been thinking about, though... these parties will most likely happen on weekends, which is understandable of course, but I'm not too thrilled about the prospect of never having weekend time to spend with my family. I wonder if there is a way to carry more of this sort of business during the week - perhaps branching out to a related service, but not the exact same thing, or...

Of course, if I got big enough to be able to afford multiple employees, I could always pass off some of that weekend work, but that's a long way down the road.

 

[Irin997]

You'd be surprised at the number of people that would jump at a weekday birthday party for a price discount. Don't forget all the preschool aged kids (3-5) that can easily do a Wed party at 10am instead of Saturday.

Have you considered writing a business proposal and seeking a small business loan? It might be worth looking into. I think this sounds like a great idea as I'm always looking into different ideas for my DD10's bday parties.

 

[beachcomber]

If you're in the NoKY area, I could see Cincinnati people spending this on parties, I know on the north side of the city we do. I would most definitely look into forming an LLC or liability insurance at a minimum. I'd really suggest meeting with a lawyer that helps small businesses or some other resource. There is a lot involved to a start up, beyond just the logistics.

 

[Irin997]

A friend comment on her DD going on a spa party - they got manni's & pedis, got to wear robes & had tea -- thought it sounded cute

This is a cute idea too.

 

[Karenj2]

You might also want to do research on food preparation laws in your area - I know that in the township I live in, you're not allowed to sell food not prepared in an approved kitchen, so when we have had spaghetti dinners at our church, all the food has to be prepared in the church's kitchen.

I like the idea, but having had my own business which failed due to lack of planning on my part, I really think you need to do a LOT of planning ahead of time to make sure your business won't fail. I highly recommend looking for a small business association in your area - they help you think EVERYTHING through. (I ignored sage advice.)