Different ways you can get paid for your services
When you think back to the moment you decided to start a business, what did you spend the most time stressing over? Maybe it was wondering about how you were going to book your first client. Maybe you spent weeks thinking about what your services would include. Maybe your first order of business was securing your Instagram handle. And, with all the very important things you need to think about when getting a wedding business off the ground, figuring out how you actually get paid should be near the top of the list. So, today we wanted to talk about the different ways wedding pros charge for services and invoice their couples. Read on to learn about the most common fee and payment structures used in the wedding industry and use what you see to figure out the best payment plan for you.
Fee structures to consider
After you have thought about how you are going to price your services, the next step is to figure out what your fee structure is going to be. (A fee structure essentially describes how you charge for your services.) And, in the wedding industry, there are four common types:
- Flat, project or package rates
- Per product rates
- Percentage rates
- Hourly rates
Each is great for different reasons and the one that might work best for you is dependent on your business and service. But, if you are curious about what types of wedding businesses use each, here is what we often see.
- Venues, florists, photographers, wedding planners, stationery designers, live bands, and DJs often price their services as a flat, project or package rate. Caterers often follow a similar structure but break the fee down by guest
- Rental companies (furniture, linens, tabletop, tents, etc.) are usually priced per product or item
- Full service wedding planners sometimes charge percentage rates when working with couples who have wedding budgets over $100,000
- Wedding coordinators, photographers, and catering teams usually charge hourly rates depending on the service and extra team members they might be bringing on
Pro-tip: It is common for wedding business owners to start with one type of fee structure and change to another in the future. So, if you feel like what you started with is no longer helping you achieve your goals, it is okay to make a change at any time.
Payment structures to consider
The next step to finalizing how you are going to get paid by your clients is to decide on a payment structure. (A payment structure essentially defines when you are going to get paid.) This is an important detail to think about because it helps you manage your budget by creating consistency in when money is coming into your business. There are lots of ways you can structure payments and pace client invoices, but here are the ways we commonly see it done in the wedding industry:
- Pay in full at the start or end of the project
- Deposit at contract signing and final balance due
- Deposit at contract signing, mid-project payment, and final balance due
- Invoices scheduled at regular intervals (often monthly)
There are pros and cons to each type of payment structure, so you should consider a few things before choosing one for your wedding business. There is no right or wrong answer—this is about finding the one that will help you manage your finances in a way that is convenient for your clients, protects you and is best for your cash flow.
Will the final balance be due before the event, at the event or after the event? Collecting final payments before your client’s actual wedding day can be great in terms of getting yourself paid on-time (and avoiding any need to chase down a final payment after your client has gone on their honeymoon) but it can also create some anxiety for the clients as the services have not been completely rendered. On the flip side, some couples might much prefer to not have to worry about bringing checks to their wedding—though that can create a situation where you are dealing with bounced checks or declined cards after you have rendered all of your contracted services.
What percentage will you charge for deposits and mid-project payments? This is where you can greatly influence your cash flow as a wedding business owner. And, depending on how you are with budgeting, you should pick percentages that will help keep you flush with cash. For some, that is charging a 50% deposit at the signing of a contract—for others it might only be 20%. The most important thing to consider here is what it costs to operate your business along with what you need every month to pay your bills (and yourself).
Pro-tip: Have a credit card on file for any additional time or charges the client becomes responsible for on the wedding day and have late payment fees clearly mapped out in your contract.
Feeling more confident about how you are going to structure your fees and payments? Let’s make sure you keep on track to grow your business every year too! Be sure to read this piece and learn why you should be raising your prices every year next.
Photo Credit: Vladimir Sukhachev/Shutterstock.com