As a wedding business owner, it’s likely that you have a contingency plan for just about everything related to your clients. From inclement weather to unforeseen circumstances that require your immediate attention, we’d bet that you’ll pull out Plans B-Z without breaking a sweat. And while that’s incredible for your service and product offerings, it’s equally important for you to have that same level of preparedness when it comes to your business finances, and business strategist and owner of Be Sage Consulting, Michelle Loretta, agrees. “I think wedding businesses have learned so much about preparing themselves financially after the pandemic impact of 2020. I don’t think our industry will ever underestimate the importance of having a financial game plan.”
Making sure that your business can withstand anything that the economy throws at it, like a recession, will not only make it easier for you to keep your calendar filled when things slow down but it will also help you make clear decisions without the added pressure of external economic conditions.
With the help of Michelle Loretta, we’ve outlined four things you can do to make sure your wedding business continues to operate smoothly no matter the economic circumstances. Continue reading to learn more.
Four ways to economy-proof your business
Save 10-20% of your yearly income
According to Michelle, businesses can typically expect to grow around 10-20% year-over-year. But, during a recession, it’s not unusual to lose about 10-20% of their yearly revenue, on average. Because of that, it’s important that at any given time, you have around 10-20% of your income saved in case you will need to offset any sort of stall in your business.
“Of course, some businesses will lose more than that while others won’t lose nearly as much, but this figure is important to keep in mind as you’re putting money away,” Michelle explains, “this amount will ideally give you a year to adjust or cut back to make up the difference.”
If you haven’t started saving, it’s not too late to start. The first thing you need to do is to “begin setting aside 10% of every payment received in a business savings account. If that sounds daunting, start with something smaller 2-5%, and work your way up. Adopting a saver mindset is the biggest hurdle. The rest is just running that % calculation for every sale.”
Consider adding lower-cost options if they make sense for your business
If your business generally offers higher-cost or premium options to clients, Michelle proposes introducing lower-cost options–if business has been slow for a few months–to help ease any financial burden that may come up during an economic slowdown.
“Whether or not you do this entirely depends on your business model, the current state of your market and your overall business goals. If you’re noticing that inquiries aren’t trickling in as much as you’re used to, having lower-cost options can bring in a different clientele whose bookings can help keep the lights on,” Michelle advises. “It’s better to go with this tactic than to lower your prices on your existing products or services.”
To start this process, look at your services or products and either piece together smaller packages than you’d typically offer or outline individual services that would typically come as a part of a full package. For example, if you’re a photographer that generally only offers larger packages, consider adding in mini-sessions, proposal shoots or hourly rates.
Whatever you do, make sure that you consult with your business and financial advisors to see if these measures will be worth it for you in both the short and long terms. Even if these are temporary measures, it’s important that your business decisions will move the needle in your favor so you can outlast whatever economic condition your business finds itself in.
Stay top of mind with pros and couples
Even though you’re devoting time to this already, during a period of economic slowdown, staying top of mind within your market can make an enormous difference. Word-of-mouth referrals, when paired with your photos and customer reviews, are as good as gold when it comes to getting more business because they can act as an extension of your sales process.
When a customer leaves a review or provides a referral to someone they know, they’ll be able to convey specific experiences and impressions that they got from you or your work. So, they’ll be able to pique the interest of someone they know will resonate with your style. This goes a long way because they’ll be able to sell the experience you create for your clients, so you won’t have to jump through nearly as many hoops once they reach out.
Recommendations and referrals from other pros carry a lot of weight because they immediately inspire confidence with couples. Think about it–if they trust a vendor enough to reach out to them, they’ll already have trust in their professional opinion.
So, to keep these types of referrals coming through the door, always deliver amazing service to your clients from the moment you meet them. And stay active in your vendor community so you’ll be more likely to come to mind if someone has a referral to make.
Continue investing in marketing and advertising
In that same vein, it’s essential to keep your marketing and advertising efforts going. Marketing and advertising are already important tactics to keep in your arsenal, but during economic slowdowns, they’ll continue to put your business in front of new clients. In fact, Michelle says that the last thing you want to do is cut back on your marketing efforts–“you want to be in people’s faces more than ever.”
And we get it—it can feel backward to continue spending money here when you feel like you have to tighten your belt in other areas, but think about how much more money you’ll lose if you aren’t getting your name out there. “During a recession, you’ll likely lose money, but if you aren’t actively finding new clients, you’ll lose even more money because you won’t be visible in your market. Wedding advertising and marketing help you stand out and cut through the noise,” Michelle says.
But, it’s important to set goals for your marketing and advertising efforts and actively track if you’re working towards them. Metrics like return on investment and conversion rate are great places to start as you’re attempting to link your investment to results.
Pro-tip: With The Knot and WeddingWire, you won’t have to manually track your investment–we’ll do all that (and more!) for you so you can have a full understanding of how your advertising strategy is performing.
And, remember, couples and pros need to see you. So, on top of your marketing and advertising efforts, go to local events (like the ones hosted by WeddingPro!), partner with pros for styled shoots and find ways to connect with them so you can be on their shortlist of people they’ll want to work with in the future.
Remember: your business can handle hard things
The idea of any economic condition harming your business can be daunting (at best) or terrifying (at worst), and we completely understand that. But remember, your business can survive and thrive when things aren’t ideal with the economy. The key is to look at your finances, do things that will move the needle or provide a safe financial cushion and make data-driven, considered decisions for your business.
“Don’t make huge decisions after a month; wait at least three months to start cutting back or adjusting so you’ll have time to see how the economy is doing and how your business is performing,” Michelle urges, “A recession is a natural economic cycle. A market expands and also contracts. And, that contraction never lasts forever. The better prepared you are, the easier you’ll be able to ride that storm.”
Please note: WeddingPro and the materials and information it contains are not intended to, and do not constitute, financial or tax advice and should not be used as such. You should always consult with your financial and tax advisors about your specific circumstances. This information contained herein is not necessarily exhaustive, complete, accurate or up to date and we undertake no responsibility to update. In addition, we do not take responsibility for information contained in any external links, over which we have no control.
Photo Credit: ColorJoy Stock