Make More Money Series: How to Increase Profitability in Your Wedding Business (3 of 3)
The Wedding Pro CEO Podcast: Episode 181
With Brandee Gaar
Today we are rounding out this 3 part Make More Money Series with Part three, and today we are talking all about how to charge more in your business.
Wedding Pro CEOs, believe me!! This is a juicy episode!!! Fast and to the point! I’m going to give you the exact steps you need to start CHARGING MORE for your services in your wedding business.
BEFORE YOU CONTINUE: This is part 3. If you are just coming into the series and you have not already listened to parts one and two, you are invited to go back and listen to Episodes 179 and 180.
In episode 179 where we talk all about how to work more to make more money in your business.
Click HERE to download the free Profitable Packages Calculator I use for my business.
Follow along and maximize your time invested in listening to this series!
Now let’s dig into how to charge more in your wedding business. I have saved the best for last! Coming to terms with charging more for a wedding package is a common challenge I see when I’m working with students one-on-one or in my accelerator.
They think that they need to sell more of their highest tier packages to make more money. They don’t understand why they are only selling their lowest tier package when they desire to sell their highest tier package.
But have they calculated their numbers? Do they know their numbers? Has the data determined that their highest tier package is actually profitable? Do you know if your highest tier package is profitable for your business CEO?
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Why Do I Need Profit Analysis?
The reason we need profit analysis as wedding pros is because when we start our business, most of us make up our pricing, right? After a couple of google searches and now ChatGPT we can make up a price quite quickly. But is it profitable?
I did it as well back in 2006 starting Blush.
But as you’re growing your business, you really need to understand how much money it actually costs to service each of the packages you offer.
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Pricing A Service Based Business
There’s so very little information out there about how to price your service based business.
When you have a product you offer it is perceivably easier. It’s like, just multiply the units on-hand by the cost and add a profit margin and boom, a simple equation!
But as service-based business owners, we often say things like, “Well, it’s just our time.” and “We don’t have any costs!” I’m guilty of that too.
I’m guilty of saying, “It’s just my time!” and “I don’t have any hard costs that go out to service a wedding, so any amount of money that I make is good money!”
Now I cringe as I remember saying that!!
Copy and paste this on to your brain CEOs: The most valuable resource that you have is your time!
Each of us has a finite amount of time every single day that we can work with.
So if we don’t know how much we’re charging per hour, if we don’t know how much we’re making per hour, or even how many hours it takes us to service our packages, that’s when we end up in this cycle of overwhelm, burnout, anxiety, a never-ending to-do list, sleepless nights!!
And the worst part is that there never seems to be enough money in the bank to make up for it. Right?
If any of this sounds familiar to you, I want you to dial in close for this episode because I’m gonna tell you exactly how to do a profit analysis on your packages.
“So if we don’t know how much we’re charging per hour, if we don’t know how much we’re making per hour, or even how many hours it takes us to service our packages, that’s when we end up in this cycle of overwhelm, burnout, anxiety, a never-ending to-do list, sleepless nights!!”
Have A Minute For A Time Study?
Now that you have downloaded the Profitable Packages Calculator you can go through this exercise with me or listen along to the podcast.
To begin, I want you to write the name of your packages and how much you charge for each package across the top of the Profitable Packages Calculator.
The next thing that I want you to do is I want you to write down how many hours it takes you to service each of those packages.
The Time Study – “Now, this is where I see CEOs get tripped up quite a bit, and that’s because they’ve never calculated the number of hours that it takes to perform their wedding packages… Take time to study and know how many hours each of your packages takes, and do these studies each year in our business to see if you need to raise your prices.”
Brandee Gaar
A Quick Time Study Option
If you don’t know how many hours, it could take you 6, 9, 12 months to get that number because that’s how far out your contracts are, right? So consider a deep dive into a time study for the future. From booking to closing the event. If you would like more content on that DM me and let me know.
For the sake of saving time now, what I want you to do is sit down for just a few minutes and think about each package and reverse engineer the package while considering the time involved.
I tend to reverse engineer or think backwards because it helps me to remember the steps that are so easily forgotten because they become standard operation or habit.
Your goal is a rough estimate for this exercise. But I do wanna encourage you to make sure that over the course of this year that you do pick a client or two in each of your package levels and track the hours spent producing that package. There are app that help track time like Hours Tracker and Clockify. Both of them have free options.
Listen to the episode for helpful reminders of what to track when doing an hours study for your packages.
“Now let me be very, very clear about what a variable cost is. Okay? A variable cost is anything that you pay only if you book an event, okay? Contrast that with your fixed costs, which are things that you pay for monthly, no matter how many events you have.”
The Wedding Pro CEO Podcast #181
Add Your Variable Costs
A variable cost is anything that you pay only if you book an event, okay? Your fixed cost, are things that you pay for monthly, no matter how many events you have.
I’ve got these examples there for you.
- Credit Card Fees – If you pay for processing fees list those fees. If your customer pays these then do not list them
- Labor on Wedding Day – Not your salaried employees or leads but your assistants, second shooters, contract labor just for the event. Most of the times it is a flat fee for a certain time.
- Client Gifts – Anything you gift to your clients. Welcome gifts, thank you gifts, etc.
- Contracted Lead Planner – This cost occurs when your company sells the package and then subcontracts another company or contractor to plan and produce the wedding. Important to emphasize again that this is not your salaried employees. Okay?
- What other variable costs do you have? DM me and let me know.
“What you will most often notice, is that your starting package, your most basic package, is more profitable than your other two packages.”
Brandee Gaar
Analyze The Data!
Okay, so once you’ve got all your variable costs in, now the calculator will give you, your hourly rate for each of your packages. This is where we get into analyzing the data.
You guys know that I love to analyze data!! Numbers don’t lie. Numbers have no emotion. They tell us a story, right?
We’re trying to get the story out of the numbers. How profitable are we and which of our packages should we continue to push and sell?
Typically I have found that a wedding pro’s most basic package is the most profitable.
Why? Most of the time when you’re pricing your services, you price your base package and you’re like, “I’m gonna charge, $2,000 for that package.” And then your next service, you’re like, I don’t know, maybe like, $3000 for a partial planning package?”
Totally guessing! And you’re like, “Well, that’s a thousand dollars more. That feels really good. I’m gonna do that!”
And then the top package you’re like, “Well what if I charge like, $4,500? Cuz that feels really good too! That’s like, $2,500 more than my base package. Like that’s a lot of money if somebody pays me $4,500!” Right?
And it feels so exciting. The challenge that you see is that most of the time it takes you so much more time to service those high end packages that you are not charging enough at all!
“If you analyze your packages and come to know you make $80 an hour for your base level package and you make $50 an hour for your highest tier package, why on earth would you keep selling your high tier package?”
Brandee Gaar
You must analyze the pricing of your services correctly to ensure profitability and avoid burnout.
It’s essential to analyze the time and resources that go into each package and adjust the pricing accordingly to ensure that you’re making a profit. We can guess at pricing in the beginning but after several events you have plenty of data to work with to adjust the price of your time! Numbers do not lie!
If your highest tier package isn’t generating enough profit, you may need to adjust the offer or increase the price to reflect the time and effort required to service it. If you cannot increase your price then stop selling that package all together.
If you analyze your packages and come to know you make $80 an hour for your base level package and you make $50 an hour for your highest tier package, why on earth would you keep selling your high tier package?
Alternatively, if you’re unable to increase the price, you can decrease the offer to reduce the time and resources required.
The key is to know your numbers! Find the balance between pricing and service to maximize your time while continuing to provide top tier service and value to your clients. That will make you more money that will produce profitability in your wedding business!!
Now You Have Maximized Your Profitability In Your Wedding Business
Once all of your packages have the same hourly rate, it really doesn’t matter which packages you sell every month because they all give you the same profitability.
Yes, it’s great to be able to sell a full service client, but only if you’re making the same hourly rate as when you sell a basic level package, right?
Once you have all of your packages at the same hourly rate, go sell the heck out of these packages! Sell confidently, knowing that you are worth every single dollar that you are requesting for your services because you’ve done your profit analysis and you know you are not just making things up. You’re no longer just throwing spaghetti at the wall.
You, the wedding pro CEO, now know exactly how much it takes for you to service each of your packages, and you’re gonna walk into those consults with confidence closing more of your ideal clients!!
Listen Now to Episode 181 of the Wedding Pro CEO Podcast, How to Make More Money Series: Charge More!
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Bye for now!!! 🙂
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EPISODE NUMBER 181
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