This article was written by WeddingWire Education Guru Alan Berg, CSP.
I love speaking with wedding pros about their businesses, because the business of weddings and events is what my business is all about. Each wedding pro should have their own goals and it’s perfectly acceptable to have different goals at different stages of business — as a matter of fact, your goals should evolve with your business.
How do you measure your business?
New businesses are often just trying to survive, while well-established businesses may be trying to stay current and relevant. What are the benchmarks you’re using to see how you’re doing? Is it the number of weddings and events you do each year? Or is it the total revenue (top-line)? Or maybe it’s the bottom line (net profit). Each of you has to decide what’s important, and then decide how you’re going to achieve that target. Just make sure it’s the right target.
What’s in a number?
I was consulting with an entertainment company who told me that he wanted to do 250 weddings the next year. When I asked him why, he said that he felt he would be seen as a major player in his market. I asked why that was important to him and he replied that he felt it would solidify his standing, and how he was viewed by the other wedding pros. When we looked at how he was planning to get there, it was to go after lower-dollar weddings that he wasn’t getting now. He was currently more of a boutique business, towards the higher end of his market. As I went through with him how to get to the 250, it occurred to me that he wasn’t going to be making much profit on those additional weddings. Once we considered the additional costs: DJs, equipment, insurance, marketing/advertising, admin, etc., most of the money was going to others, not to him. In my words, he was trying to feed his ego, when I prefer that he was trying to feed his family.
Biggest or most profitable?
Another client of mine, a rental company, told me that their goal was to be the biggest rental company in their market. I suggested that a goal of being the most profitable rental company in their market was a better plan. It’s often easier to grow your top-line than your bottom line. You can sell more weddings and more services, at or close to your cost, and increase your total sales. Figuring out how to sell more profitable services, or raising your rates and increasing your average sale, is a better plan. You’ve probably heard the phrase “Work smarter, not harder” and in my opinion, that’s a better way to go. When you figure out how to make more profit per wedding, you’re on your way to working smarter.
Which comes first – more weddings or more profit?
If you have the choice to either do more weddings, or increase your average profit per wedding, I’d focus on the latter. When you start making more per wedding, then you can decide if you want to do more events per year, or just make more from doing the same number of events. Many of the wedding pros I meet, and consult with each year, aren’t trying to do more weddings. Many have already maxed out the number of events, so the only way to increase their sales, and profit, is to increase their average sale. It’s the same for my business. In the early days I was all about increasing my total sales. And while I achieved that, I also realized that I wasn’t profiting enough for the amount of sales I was bringing in.
Diversify, or double-down?
As you look for ways to increase your profits, one possible way is to diversify, and offer new services, or go into new geographic markets. You may see a competitor doing some of these things and decide to follow along. Just make sure that you know why you’re doing it, because it’s likely you don’t know why your competitor is. If you don’t know if they’re profiting from that expansion, you might be chasing a losing proposition. It’s easy to spread yourself too thin, too fast, so think before you follow.
Is smaller better?
In the lifecycle of many of my clients, they start small, get big (sometimes slowly, sometimes fast) and then, many of them decide to scale back and get smaller again. Maybe it’s a venue owner who goes from one, to three, to six venues, and then decides to focus on one or two of the most profitable ones. Or it could be a DJ, photographer or officiant, who goes from being a single-op (just her or him) to multi-op (many employees/contractors, and possibly many services) back to being just her or him and fewer services.
There’s no one answer as to which is better. It’s about which is better for you, at this time. One thing is for certain, you need to decide how you’re measuring your success, right now, and then work to achieve that. Don’t follow someone else’s idea of success, or you’re likely to be like the dog chasing a car. If the dog actually gets to catch the car, then what will it do? If you achieve someone else’s idea of success, will you be satisfied? I suggest you choose your own destination, chart your own course, and then enjoy your success when you get there.
WeddingWire Education Guru Alan Berg, CSP has over 20 years experience in wedding related sales and marketing, and is an author, business consultant, a member of the National Speakers Association, and the wedding & event industry’s only Certified Speaking Professional®. Learn more at alanberg.com.