I've always admired Michelle for her strong, honest sense of the wedding industry. In a loud chorus of advice from business coaches, Michelle's voice is one you need to listen to. I asked her to share some financial wisdom that could help us all– and these are the 3 top financial mistakes you're making in your wedding business. The article below is written entirely by her.
I've known the brilliant, smart and funny Michelle Loretta for many years. In fact, I think we go as far back as 2008 when we met at an industry conference. If are not familiar with Michelle– you need to be! She is a business consultant and financial strategist for wedding and event professionals. As the founder of Sage Wedding Pros she blends her past as an accountant for Deloitte, a sales and marketing manager for DDLA, a merchandiser for Coach, and a stationery entrepreneur to strengthen wedding businesses worldwide.
Sage Wedding Pros also produces the next-level summit Be Sage Conference — which I highly recommend you put on your list of must-attend conferences. Michelle is also an avid speaker, sharing her knowledge at a number of additional industry conferences including NACE Experience, Biz Bash Live, and Association of Bridal Consultants.
Finances are an area of business ownership that typically induces groans. AMIRITE?
But – here’s the thing: If you aren’t on top of your business finances, you are doing it wrong. Your numbers are the only quantifiable metric for whether your business is thriving, or merely surviving. Passion may drive you, but the numbers are what keep your business alive (or not).
You’re in good hands today because MONEY is MY JAM. I want to help you avoid (or fix) some of the biggest mistakes I see:
Top 3 Financial Mistakes You’re Making in Your Wedding Business
1.) Your prices are TOO low
If a wedding business isn’t earning enough it’s usually because their services are priced too low. Pricing (and the related profit margin) are the biggest contributors to financial sustainability in the wedding industry. This can be a challenge to newer wedding businesses who are simply trying to create a portfolio and some clients on the books. But, every little bump you can make to your pricing can go a long way. Even a small boost of 10% on your pricing can lead to big results. When I test things financially – it’s always pricing that is the culprit for a business’s small profits.
Now, keep in mind: pricing is a marketing decision. Your price needs to match your market strategy (your target market, your niche, your level of service, etc.)
Want to learn more about how to price yourself as a wedding planner? Check out this article.
2.) You’re making investments based on ego.
Here is my rule of thumb with investments in your business: ONLY do it if you can afford it. Don’t go into debt for your wedding business. I can share from personal experience – and from working with hundreds of wedding professionals over the years – business debt is SO DIFFICULT to overcome if you have a service-based business.
So – you know that print ad you can’t quite afford but really want to do because it’ll make you look good? You know that office space you don’t really need but feel like you have to do because “everyone is doing it”? There are so many decisions we make based on ego – or the desire to elevate ourselves, our image. This is ‘keeping up with the Jones’ wedding-industry-style. Don’t do it unless you can legitimately afford it.
3.) You aren’t tracking your sales and expenses.
Tracking your sales and expense transactions is called bookkeeping. And – bookkeeping is the most boring thing you’ll do in your business. (I’m not here to sugar coat.) However, the power of bookkeeping is not in the data entry but in the information it gives you. Over time you’ll be able to see patterns in your business. And, it’s in these patterns that you can start to make intentional decisions with your dollars.
I recommend starting with a simple spreadsheet and listing all your sales and all your expenses. And, once you’re up to ~30 transactions per month, it’s time to move onto accounting software, like Quickbooks. Once a month, sit down and look at your totals. What are the numbers telling you? Are you profiting? If you’re not achieving your financial goals, this is where you need to make changes. (I teach accounting 101 for wedding pros here if this is making you panic.)
Here are 3 action items I want you to do now:
- Create an “Accounting Day” one day a month to track and analyze your finances.
- Examine your pricing. Can you make a 10-20% bump?
- Examine the investments are you making based on ego. Cut those out.
Want to manage your finances better? Start with the Sage Wedding Pros monthly accounting checklist for 17 easy-peasy action items you can begin doing now: sageweddingpros.com/accounting-101/
Thank you so much, Michelle, for sharing! So how many of you reading have made a bad financial decision in your business based on ego? I'm raising my hand, friends because I have too.
I highly recommend you check out Sage Wedding Pros and attend one of their monthly meet-ups called Thursday Therapy (be sure to apply for a Thursday Therapy chapter if one doesn't exist in your area yet!) and the Be Sage Conference, happening December 4-7th in Hilton Head, South Carolina. Michelle is always sharing business advice, so be sure to follow her on facebook, instagram, twitter, pinterest, snapchat and connect with Michelle on linkedin.