This excerpt is part of Entrepreneur.com'sSecond-Quarter Startup Kit which explores the fundamentals of starting up in a wide range of industries.

In Start Your Own Event Planning Business, the staff at Entrepreneur Media Inc. and writer Cheryl Kimball explain how you can get started in the event planning industry, whether you want to work part- or full-time planning anything from a first-birthday party, bar mitzvah or wedding to political fundraisers and product launches. In this edited excerpt, the authors talk about the things that will help you succeed -- and those that will make you fail -- in the event planning industry.

Here are some of the pitfalls specific to the event planning industry:

Misunderstanding your client’s require­ments. If your client wants a con­servative business meeting and you deliver a Roaring Twenties theme party, you’re in trouble. Although this is an extreme example, remember that you need to know all your client’s requirements in detail before you can arrange a successful event.

Poor choice of vendors or site. Do your homework. Contract with reliable, repu­table vendors who can meet your clients’ needs exactly. If your caterer serves a terrible meal, it’s the caterer’s fault that he or she can’t cook. However, you’re the one who made the hiring decision, so you’ll take the blame. Be sure you can count on your vendors. Vet vendors carefully.

Lack of coordination between you and your team. Make sure you have a cooperative, “well-oiled” team (employees, vendors and temporary staff) around you and that everyone understands their respective roles in the pro­duction of the event. You know the adage—you’re only as good as your weakest link. Avoid weak links!

Inaccurate estimates. Your estimates should be as accurate as possible. If events go far over budget, your clients may end up having to pay more money than they can afford. Clients may feel “taken to the cleaners” if you come in substantially higher than you originally estimated. If, on the other hand, you consistently come in at or below your estimates, you'll be eating expenses because you inaccurately estimated costs and can’t pass them along to your client, and that’s a quick way to stop your business in its tracks.

Inadequate control of costs. Take every reasonable opportunity to save. Pay atten­tion to where money goes. Compare costs and choose wisely.

Poor cash flow. One of the most effective ways to counter this is to require client deposits.

Inadequate insurance. Make sure you carry enough insurance to protect yourself in case anything goes wrong at an event. Most planners carry about $1 million of liability insurance. If you don’t have enough of the proper insurance, and if you’re involved in a lawsuit, you could end up in bankruptcy.

Poor customer service. The golden rule in the event planning industry is to make the event right. Nancy Lavin, a regional vice president of an asset management firm, has hired event planners for hundreds of events. “I understand if prob­lems arise at big events,” she says. "However, the complete deal breaker is poor service.”

Now that you know some of the problems that can undermine an event planning business, be alert for any danger signs. If you react quickly enough, you can prevent financial disaster from striking.

Much of effective troubleshooting is within your control and consists simply of making adequate preparations. Before every event, take a few moments to think through “what ifs” and plan crisis management strategies with your staff. Try to anticipate where problems might arise and plan for them. This strategy can be as simple as having backups for resources that are critical to an event’s success. Remember, the best way to deal with unforeseen circumstances you can't control is to remain as flexible as possible and be willing to try new strategies.