When we started our wedding business 14 years ago, the secret to our success was simple.
We set income goals for our business and posted them all over the house. Starting at $500 a month all the way up to $20,000. And we hit them every single time.
Until we stopped looking at our numbers. That’s when things started to slip.
Confession: I am NOT a numbers person. I’ve never liked math and I hate bookkeeping. Blech!
But I force myself to think about numbers and pay attention to people who do because:
Knowing your numbers is essential for building a profitable wedding business.
Please do yourself, and your future profits, a favor by reviewing this list of foolish, profit-slaying mistakes. These are hard-earned lessons, believe me!
Mistake #1 – Focusing on income instead of profit.
Income is the total amount of money generated by your business, before taxes and expenses.
Profit is the money leftover after taxes, salaries and expenses have been paid.
There is a big difference between the two. You could have a $1 million wedding business, but if your expenses are $995,000–you only have $5,000 of “real” money left.
Focusing on profit lets you create a thriving business that grows in a sustainable way. Focusing only on income can get you deep in debt or worse.
Yes, sales matter. But profits matter most.
Mistake #2 – Not paying yourself first.
We were so guilty of this!
You’re in business for the freedom to be your own boss and live a life you love. Right?
That means you need to set your business up from the start so that it rewards you for all that hard work.
Too many times we starve ourselves and pour every bit of money back into the business. But that only creates a monster that demands more and more of our time, energy and money.
Paying yourself first forces you into a sustainable, profitable business model.
Mistake #3 – Spending every penny in your bank account.
Here’s what most of us do (us included, until recently):
You deposit the funds from your weddings into your bank account (yay!) and then you begin to pay the bills with them as they come in. Advertising, supplies, salary (if you’re lucky), credit cards…
Until your account is EMPTY.
Then when an unexpected expense comes up, like broken equipment, or when tax time rolls around, you have nothing left.
You need a system to pay yourself first and set aside money so that you’re never caught with your financial pants down again.
Mistake #4 – Not looking at your financial statements every month.
Wanna know the big reason most wedding pros don’t know how much they need to make to create their ideal lifestyle? (And they don’t, ‘cuz we ask them all the time.)
They’re afraid to look at their bank statements.
If you tally up the amount of sales you make and measure it against your monthly expenses, it feels like something BAD is going to happen. If you look at it, that makes it real.
Reality check: your wedding sales (or lack thereof) and the debt you carry is real, whether you look at it or not. Keeping your head in the sand only postpones the inevitable disaster that will destroy your wedding business for good.
You need to look at your financial report at least every month so you can take action and stay on track towards your goals before things get ugly
Mistake #5 – Not knowing your net profit per hour.
Your net profit per hour is your total net profit before taxes divided by the number of revenue producing hours. It includes all the hours it took employees to deliver your products and services, too.
So if you made $5,000 (after subtracting your expenses, but not your taxes) and your entire team worked 500 hours, your net profit per hour is $10.
That’s how much you’re REALLY taking home. For many wedding businesses, that can be scary.
It’s easy to fool yourself into thinking business is great when you focus on gross income alone. Your net profit tells you the truth, and knowing it means you can improve it.
How to Transform Your Business Into a Money Making Machine
This is admittedly a tricky issue for many creative wedding pros who aren’t into “the numbers.” We just wanna do what we love and get paid for it!
When you nail this concept down, you are firmly focused on the numbers that guarantee your success. And what you focus on grows.
That’s why we’re so excited to have Jason Spencer, a Provendus Growth Strategist and Certified Profit First Business Coach, teach us exactly what we need to do!
Join us for our BRAND NEW workshop, “Profit First: How to Transform Your Business Into a Money-Making Machine” to learn the shockingly effective approach to make your wedding business instantly and permanently profitable.
- How to break the panic-driven cycle of operating client-to-client, where so many event professionals feel trapped.
- The simple way to ensure your taxes are paid in full, on time, every time, without a year-end surprise bill.
- A smart and effective way to always pay yourself first …even in the slowest of months!
- How you can become instantly and permanently profitable… even if your business is drowning in debt.
- Access to the worksheets and bonus content that show you how to DOUBLE your profits in the next 12 months.