Since March 2020, our industry has experienced the most challenging times in recent history. Amidst the hundreds of thousands of wedding cancellations and postponements, our industry has maintained its strength and resilience through unprecedented challenges. It has been wonderful to see business owners coming together virtually to support one another through the UK Venue Slack group, the ABWB, the #whataboutweddings campaign, our Bridebook government petition, industry letter-writing to MPs and more.
I’d like to share some key considerations based on my unique experience as not only the CEO of wedding planning app Bridebook, but also as a fellow wedding venue owner of Hedsor House. I also co-founded HelloFresh and was formerly an investment banker at UBS during the last financial crisis, so have had a varied career with some very relevant experiences. I’ve also been in direct communication with the CMA and a panel member of the Law Commission overseeing regulations for wedding venues, all of which enables me to gain insights into the current state of the industry from many sides.
Looking ahead, we unfortunately know that 2021 will be a challenging year too. However, we all have opportunities that we can leverage to position our businesses as best we can at this time. I encourage you to think about each of these key considerations.
Cash is vital. This can not be emphasised enough. Focus on cash. We know that weddings will be back at some point, we now need to secure enough cash to ensure that our businesses are around for that moment. Make sure you understand the implications of postponements and deposit amounts to your cash flows, and make adjustments accordingly.
For example: Suppose you charge £10,000 for a package wedding, it costs you 70%/ £7,000 to host the wedding, and you take 50% deposit. Whilst receiving the first £5,000 deposit is useful and lucrative, beware being lulled into a false sense of security on the second payment. Though you will receive a second £5,000, you will have £7,000 outgoings so will actually have a net cash outflow. Postponements stack these outgoing up. If your hosting costs are less than your second deposit, then you don’t have this issue.
In a normal year, hosting weddings and selling weddings balances out, so you have positive cash flow. However, a year filled with hosting postponed weddings and selling weddings 2 years out may have a new cash impact for your business. Know your costs, know your cash flows, and make adjustments to your cost structure or deposit structure to ensure you stay cash flow positive. Frontloading sales early on is a key way to address this issue. The further out you can sell dates, the smoother your cash flow will be.
For example, let’s consider £1,000 off venue hire versus £1,000 off champagne on the wedding day. The first option costs you instantly from net profit and cashflow now, while £1,000 champagne, likely only costs you £330-£500, and the cash flow impact is only at the wedding. Consider that actually £2,500 of free champagne might have the same net profit impact for you as £1,000 upfront discount, still has a later cash flow impact, and is likely much more persuasive to the couple!
Making sure your team is equipped to handle your upcoming business needs is vital. As we approach the biggest engagement season of the year, with 40% of the year’s engagements occurring between December and February, a huge opportunity awaits and a capable sales team should be in place to maximise results.
A key consideration when considering the difficult decision to make someone redundant is their replaceability and the actual saving. For example, if you are making an employee redundant you may give them 2-months settlement. Hiring their replacement may cost a 20% recruitment fee, and training up the new colleague may take another 2 months. In this scenario, if you believe their role will be required within 6 months from November, then it would be a false economy to follow a redundancy route. A mutual agreement of reduced hours / sabbatical / temporary role reassignment may be a more optimal route for both parties and for morale.
Dynamic pricing for your business is incredibly important too. This will allow you to maximise sales by actively shifting couples into weekday rather than weekend bookings. If you need any guidance on dynamic pricing, do message your Bridebook venue consultant.
While our industry is impacted significantly by COVID-specific regulations, we are also experiencing impacts from changes stemming from the Law Commission as well as CMA guidance. Make sure you’re up-to-date on the impacts these governing bodies have on your business’s opportunities, competitors and contracts.
The changes will likely allow weddings to take place outdoors, in a wider variety of buildings, with loosened restrictions on celebrants, ceremonies and notice-giving. While many within our industry may be wary of increased competition from non-traditional venues, we should not expect a rush to weddings in McDonalds. Couples will still want large groups of friends and family, in beautiful settings, where they can dine together in one room, and not be reliant on the weather, and that are run by experienced staff. This all leads back to the professional venues of today. We can also view the easing of these restrictions as opportunities for us to conduct wedding ceremonies more freely on our own premises and in our outdoor spaces, enabling us to enhance our current wedding offerings. Do note that celebrant weddings are already very popular, although not legal, and the vast majority of them take place at approved premise wedding venues anyway. The easing of these celebrant and ceremony restrictions benefit our venues by offering more freedom and flexibility to our clients while on our premises. We can expect further updates later in 2020.
Further details of a CMA action involving Bijou Weddings Group were released which concluded the fair and reasonable non-refundable amount to be 37.2% of the total cost of the wedding. On 9 Oct 2020, Bridebook issued an update to the CMA Guidance Summary, which includes an assessment of the decision with Bijou Weddings Group and continues to add updates to this page.
I know these last seven months have been difficult, and I applaud all your efforts to keep calm and carry on, despite the many adversities your business has faced. I know that we are all poised for a boom in bookings come engagement season, only two months away. I strongly urge you to take some time to seriously think about all of these key considerations and make sure your business is in the best shape possible for the next 6-12 months.
I see plenty of hope for our industry. From Bridebook data in September, we see newly engaged couples’ predicted budgets have remained unchanged versus 2019. Couples still want the large weddings we all know and love, and they are willing to wait for when it is possible. 2021 and 2022 will likely be the busiest years of weddings ever. We want to be sure you are there to work with them when that time comes.
I also urge venue owners and managers to get connected with your fellow industry colleagues on the UK Wedding Venues Slack group, a forum of thousands of wedding venues across the country, supporting each other and discussing relevant issues on a daily basis.
Now is also a great time to ensure that your digital presence is in tip-top shape, in preparation of the Christmas influx of prospective couples to your website, social media and Bridebook profile. Make sure all your photos, videos and details are up-to-date. Remember that couples love social proof, so chase any outstanding reviews from clients and fellow colleagues (share this simple link to collect reviews), and add testimonials to your Bridebook profile and website wherever possible.
Additionally, book a call with your Bridebook venue consultant to learn about ways to boost your presence among local couples, by heading to THIS PAGE or emailing business.bridebook.co.uk. If your business doesn’t have a Bridebook profile yet, create a free profile and our team will be happy to welcome you to our wonderful community of wedding professionals.
There are so many moving parts in our industry right now, and I truly want you to be the best equipped business you can be to navigate the difficulties and come out on the other side stronger than ever.
If I or the Bridebook team can help with anything, do get in touch.
Thanks for your time. Stay strong.