I've had an entertainment company in L.A. for more than 15 years. Like many others here, I had long wondered why all the good networking conferences were back East. A colleague and I finally decided to do something about it. In 2009, we held our first West Coast networking conference, with 93 speakers and 300 attendees. They loved it, but we lost about $8,000. Last year, we did it again, with 135 speakers and 400 attendees—and lost about $20,000. What killed us each time was the cost of the venue, especially the charges for food, beverage, and parking. What should we do?
CEO, Solid Entertainment
Here's a good rule: No matter how much business experience you have, treat every new venture as if it's your first one and assume you have no idea what you're doing. If you approach it in that frame of mind, you'll get the help you need to avoid rookie mistakes.
That rule would have benefited Richard Propper and his partner when they went into the conference business. They had considered hiring a professional event planner but were scared off by the price tag. They decided to do it themselves and save the fee. The only problem was that they knew nothing about staging conferences. I've worked with event planners, and putting on a profitable conference is much harder than it appears. In particular, you need to know what you're doing when you negotiate with venues. Otherwise, you won't know what to ask for, how much to pay, and what other options you have.
I told Richard that he needed an event planner, although Hollywood might not be the best place to look for one. Someone who does parties for movie stars and studio executives probably isn't used to working within the budget constraints required to have a profitable business conference and won't be much help in determining the appropriate registration or sponsor fees. Fortunately, there are plenty of people who specialize in business conferences. "Hire people with experience, and watch closely what they do," I said. "Then, if you decide to do it yourselves the next time, at least you'll know what's involved."
Please send all questions to AskNorm@inc.com. Norm Brodsky is a veteran entrepreneur. His co-author is editor-at-large Bo Burlingham. Their book, The Knack, is now available in paperback under the title Street Smarts: An All-Purpose Tool Kit for Entrepreneurs.