This article was written by WeddingWire Education Guru Alan Berg, CSP. Alan has over 20 years experience in wedding related sales and marketing, and is an author, business consultant, a member of the National Speakers Association, and the wedding & event industry’s only Certified Speaking Professional®. Learn more at alanberg.com.
As we approach the end of another year, it’s often time to reconcile our finances. We need to get our books in order, so we can do our taxes (I know, yuk). Then comes the scramble to find the deductions you qualified for over the year. While doing so, it becomes easy to focus on our expenses. For some of us, it’s time to re-evaluate those expenses as we prepare for the coming year.
These insights will help you get a handle on your financial planning needs and help you take control as you plan for the future!
Expenses vs. Investments
The danger in focusing only on expenses is that you can lose focus on the bigger picture. The only money you can save is the money you spend. It’s a finite amount. You can’t make all of your expenses disappear. You have to buy gas for your car, and pay for telephone service, internet connection, electricity, and more. But those are expenses, not investments. Expenses are things that you pay for, where you don’t expect any return other than what you bought (gas, electricity, phone service, food, etc.).
Investments, on the other hand, are things that may, and the operative word is ‘may’, provide a return that’s greater than the value paid. When you invest in a new employee, you would hope to get more value than what you pay them. When you invest in a new website, you would hope to get more value than the cost of the website. When you invest in advertising and marketing, you would hope to get back more than the value that you pay. When you invest in a new location, you would hope to get back more than you invest.
Opportunity Cost
What you need to focus on is getting the best return. The opportunity cost of not investing is the money you could make if you did. Sometimes, that means doing more than just paying the bill. For instance, if you buy a booth at a wedding show, and don’t take the time to design your booth correctly, and invest in great email/direct mail follow up, and actually do the follow up, you’ll never get the most return from that investment. Similarly, if you take a new office/warehouse space, build it out and decorate it properly, but don’t invest in marketing to let people know about it, you’ll never see the full return.
Go Big, or Go Home
When someone buys my sales book Shut Up and Sell More Weddings & Events, I sign it “Go big, or go home.” It’s been a mantra of mine for my own business, as well as how I consult with businesses like yours. None of us can expect to get the best return, unless we’re prepared to invest in ourselves, the way we want others to invest in us. I remember a few years ago where I needed to print 500 handouts for a trade show, and I suggested to my wife that I might go over to the office supply store, and have them make 500 copies. She said to me: “We are not a black & white brand!” She was right. That doesn’t fit with our brand image. And if we want people to invest big bucks with us, we have to lead by example, and invest in better design and printing. If we get to meet at a networking night or industry event, ask me for a business card, and you’ll see that it’s different than most others – ½” taller, high-quality paper and printing – both sides, professional design, rounded corners, a testimonial quote, and I even leave room for you to write on them.
Show Me the Money!
Too often I see wedding and event pros taking the cheap way out, only to wonder why they’re not getting the big return. You simply can’t take the smallest booth at the wedding show, or the cheapest, or free, placement on a website, and expect the best results. My clients who take the biggest, best placement they can get, are the ones seeing the best results (most of my clients have Spotlight or Featured placement on WeddingWire). But it doesn’t stop with advertising or a wedding show booth. They also invest in making their websites convert better. They invest in professional graphic design for their emails and direct mail pieces (you and I can tell when someone does it themselves, versus using a professional designer, and so can the brides and grooms).
Focus on the Dollars, Not the Pennies
Now, I’m not saying you shouldn’t try to save where you can. I’m all for efficiency. But there’s way more upside to your bottom line through earning more – raising your prices and/or doing more weddings and events – than there is to be saved by cutting expenses. You can’t save your way to prosperity, but you can put yourself out of business by trying to save too much. So, as a new year dawns, start focusing on how you’re going to reach your goals by earning more, not by spending less.
I wish you all a very happy, healthy and prosperous New Year.
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