Are wedding venues profitable? It's one of the most common questions prospective wedding venue owners ask — and with good reason. Starting a wedding venue business takes a lot of time, money, and resources, and there's a lot that can go wrong if you aren't fully prepared before getting started. Well, this is a great place to start.
We’ve done the maths and talked to experts who have actionable tips for successful wedding venues. Keep reading to learn more about starting — or earning more from — your wedding venue business.
Are wedding venues profitable?
The short answer? It depends. Every wedding, and every wedding venue, is different. What works for one venue may not work for another. Peak season for one may be shoulder season for another. You get the idea.
At the end of the day, there a lot of factors to consider when determining if a wedding venue will be profitable or not. For example, factors that go into a wedding venue's profitability include:
- Business licensing
- Mortgage/rent
- Insurance
- Marketing
- Location popularity
- Parking/valet
- Security
- AV equipment
- Liquor licensing
- Onsite staff
- Accounting
- Utilities
However, one of the best ways to maximise the chances that your wedding venue will be profitable is to learn from the mistakes of others. Keep reading to discover some of the most common reasons that wedding venues fail and, more importantly, how to prevent those mistakes from happening to you.
Discover 4 preventable reasons that wedding venues fail
Although these tips are pretty basic, some first-time wedding venue owners fail to take into account these fundamental business practices. Cvent spoke with four expert financial consultants and successful entrepreneurs about the lessons they’ve taught their clients over the years to figure out why and how some wedding venues fail.
1. They don’t have a business plan.
Finance CEO and Founder of Wall Street Zen, Nate Tsang, recently spoke to Cvent about a common mistake that entrepreneurs make when starting out. He agrees that “wedding venues can be profitable,” but they need a business plan to do it.
Via email, Tsang told us, “... most owners think that customers will come to you if you make the venue beautiful and aesthetic enough. This is not the case, and this is the main reason why most venues fail. Wedding venues are businesses. This means that you should have a business plan in place to make sure that you can recoup the cost you’ve invested in.”
That means coming up with a mission statement, concrete financial goals, and a step-by-step process for how you’ll accomplish them. Tsang went on to say that "the business plan will help you create a profitable monetization strategy that will provide you an overview of how you should market and manage the venue. This can also give you the strategy you need for low seasons and help you understand how you can leverage peak seasons.”
In other words? “Having a business plan gives you the roadmap on how you will navigate your wedding (business),” he said.
2. They don’t do competitor research.
Tony Martins is an entrepreneur and founder of the media platform Profitable Venture. In a recent interview with Cvent, Martins shared what he learned from having to close his own wedding venue business.
“I invested in a beautiful property, hoping to turn it into a profitable wedding venue,” he said. “However, I failed and ended up having to sell it to someone else. This is because I failed to compete properly with other wedding venues in the area.”
What did they do differently? “Where they had all-inclusive packages, I did not — which was a complete oversight. So many wedding venues offer extra services these days, such as shuttle services and catering, that mine just couldn't keep up — despite the location.”
Martins continued: “So while wedding venues *can* be profitable, it isn't enough to just have the venue alone — you have to offer desirable extras, which is a whole other ballpark.”
But competitor research isn’t just a one-time thing. It’s good to keep tabs on other venues throughout the lifetime of yours. That way, you’ll be able to determine what works and what doesn't, helping you offer the best or most unique services in your comp set.
Let us help you track (and beat) the competition
3. They don’t offer enough.
Ian Sells, the Founder and CEO of RebateKey, has a point of view similar to Martins. As an eCommerce professional, Sells has come to realise that the success of his business depends on being a one-stop-shop model. And he thinks wedding venues can benefit from that approach too.
“We try our best to offer all sorts of deals so that our buyers don't have to look elsewhere,” he said. “In the same way, if a wedding venue can provide lights, sound systems, catering, designing, and even preparation rooms, not only would that generate more income, it will also be more convenient for the couple (and for sure, they'll prefer this).”
Sells also recommended thinking outside the box when it comes to the types of wedding-related events you host.
“Another ‘nice to have’ would be beautiful areas in the venue where the couple could take their postnups (photos). Venues can even open up their place to couples who just want to take their beautiful prenups (photos).”
In other words, use your space wisely in order to offer even more one-stop-shop-type extras.
4. They don’t manage finances well.
Michael Hammelburger is a financial consultant for small and mid-sized businesses, as well as the CEO at The Bottom Line Group. In an interview with Cvent, Hammelburger opened up about one big mistake he often sees new businesses make: Incorrectly managing finances.
“Wedding venue owners that do not have a right spend management strategy often can't get their business afloat due to excessive costs in operations,” said Hammelburger.
This is especially important for the wedding industry. As Hammelburger explained, “spend management is usually a problem among owners that navigate seasonality. Whether you are going through cash flow challenges, or you are facing a potential loss of funds, learning how to reduce your business expenses is vital if you are to survive the storm.”
But this doesn’t mean you have to entirely overhaul your current plan. It really just depends on where your business is now.
“In some instances, a few minor tweaks here and there can help you to minimize your monthly expenditure,” said Hammelburger, “while in other cases, you might need to consider other major cost-cutting measures.”
Hammelburger also noted that diversification is key to running a successful seasonal business.
“A good tip is to diversify your marketing by not only focusing on wedding-related events since there are micro-sessions that involve business meetings and small gatherings that need space.”
Things you should know before opening a wedding venue:
- The climate of your location matters. Storms, muggy weather, and gloomy skies can put a damper on wedding venue bookings.
- Wedding venue search engines are your best friend. Get added to databases such as Wedding Spot so that more potential customers can find you.
- Indoor/outdoor setups are ideal. The more options, the better. If you offer indoor and outdoor space, guests will be comfortable no matter what temperature it is during the day and going into the night.
- Residential areas are challenging. No one likes loud event venues next to their homes, so try to stick with industrial or more secluded locations.
- Always check with the fire department and local government. There might be noise ordinances and other laws to consider.
- Bathroom, running water, and kitchen access is important. It's not always a necessity, but again, the more options, the better.
- Parking often requires hiring professionals to manage. Consider that alongside your expenses and have a backup plan for when valet companies are booked out.
Wedding venues are a good investment if done properly!
Ready to get started? Up next, check out our complete guide on how to start a wedding venue business to take an even deeper dive into setting yourself up for success.
