The worked example
The package is $449.00 for 12 children. The party runs 2 hours, with an hour of setup and cleanup around it, so the room is tied up for 3 hours. Two hosts at $16 an hour plus 10% payroll cost come to $105.60. Food and drink is $4.50 a child ($54.00), goodie bags $1.50 a child ($18.00), supplies $18 and card fees at 3% are $13.47.
During the party the floor is closed to walk-in guests, who would have left you $30 an hour after their own costs: $60.00 given up. Yearly rent, insurance and utilities are $60,000 over 420 parties, $142.86 on each party.
| Line | Per party |
|---|---|
| Revenue | $449.00 |
| Total costs | $411.93 |
| True profit | $37.07 |
| Margin | 8.3% |
| Profit per room hour | $12.36 |
At 420 parties that is $15,571 of profit a year. The venue needs about 333 parties a year just to cover the fixed costs.
What the price has to be
For a 25% margin after 3% card fees, the costs that do not move with price ($398.46) are divided by 0.72, which gives $553.41, or $46.12 a child. At $449.00 this package is $104.41 short.
Comparing two packages
A shorter package for 8 children at $319 runs 1.25 hours with one host. It makes $35.47 against $37.07 for the first, but $15.77 per room hour against $12.36. On a Saturday where room slots are the limit, the short package fills the day better.
Run your own numbers: open the calculator.
Common questions
How do I price a kids birthday party package so it makes money?
Count the room hours, not the party hours: the party plus setup and cleanup, with every host paid for all of them. Add food and drink and the goodie bag for every child, supplies, card fees, the open-play revenue the floor or room would have earned during the party, and a share of your yearly rent, insurance and utilities. Divide the costs that do not scale with price by one minus card fees and your target margin to get the lowest package price.
Why does a sold-out Saturday of birthday parties still lose money?
Because the cheapest-looking costs repeat on every party. Two hosts for a three-hour room block, pizza and goodie bags for twelve children, and an open-play customer the room could have served all land on a package priced from the pizza cost, and a share of rent lands on each party whether or not the calendar is full.
What is the open-play cost of a birthday party?
If the party closes a jump area or takes tables from walk-in guests, the margin those guests would have paid during the party hours is given up. Enter it per party hour (zero if the party room is separate and walk-in traffic is unaffected) and the calculator adds it to the party's cost.
Should I sell a basic or a deluxe package?
Compare profit per party and profit per room hour. When Saturday slots are the limit, the package with the higher profit per room hour fills the room better, even if another package makes more by itself.