Opening a wedding venue is a big investment – it requires huge outlay in both capital and time. Just like any other business, you want to get it right the first time. One question that is often asked by prospective wedding venue owners is, are wedding venues profitable? Here is everything you should know to help you make a worthwhile investment.
Are Wedding Venues Profitable?
How much do wedding venues make?
It depends on the location and the type of venue. Before you invest in the business, you should calculate how much you revenue you expect to generate annually. This can be a profitable endeavor if you love weddings. In a nutshell, your wedding venue can be profitable if you have a viable business model.
Wedding venue startup costs
Starting a wedding venue requires immense investment. So, before you catch this entrepreneurial request, you should do some homework. On average, the startup costs average $50,000 to $130,000. The actual cost will depend on size and location. Other startup costs include website setup, setting up a business name, licenses & permits, furniture, business cards, and brochures etc. This will be in addition to the $50-130k start up costs. For many venues, fixed costs include insurance, loan, staff costs, etc.
If you’re on a tight budget, you can start with a simple venue and then improve it over time. Of course, the other elements you put in like decorating can quickly add to the startup costs.
How much should you charge?
The average cost of a wedding venue is $5,000 to $12,000 (just space hire). Your charges should factor in the season and day of the week. Most couples want to enjoy flattering lighting, balmy temperatures, and spring blooms. If your wedding venue will be empty for a bigger portion of the year, you need a budget to stay afloat during off season.
Charges can fluctuate depending on what you offer. There should be a minimum dollar amount to help you determine a final cost.
Things to consider
Type of Venue
You need a venue that `wows’ perspective couples. Many businesses opt for a venue theme. For instance, you can create a rustic theme or something more relaxed. Most couples want to see the features they would wish for their dream wedding. They need ready-prep spots that stand out from the other venues.
Here is the catch – you want to craft a year-round venue. But this can take time and resources to set up. You have to put all the logistics in place including a commercial kitchen, banquet space, parking, and outdoor entertainment area. However, the expenses won’t stop after you host the first wedding. You still have to reinvest a considerable amount in maintenance and also per event.
Running costs
Wedding running costs can quickly add up. Running costs differ dependent on the venue, so you don’t want to be caught unaware. If you bought the space, you should ensure you have enough money to run it when not in use. Here are some questions to keep in mind:
- What makes your venue different from others?
- What will make your clients come back or recommend others?
One of the running costs is the rental fee. You must pay your rent dues whether you host an event or not. Furthermore, to ensure you spread the word, you must do some serious marketing. You should focus on the main social media platforms to advertise your venue. Apart from that, you can include links from other websites and referral schemes with other venue suppliers.
If you want the best ROI on your investment, you may want to choose paid ads. You can post once a day about new items, upcoming events, and promotions. Most couples will spend their time on social media sites, so you should have a strong presence on such platforms.
The cost of utility is another aspect of running costs. You have to incorporate costs like electricity, sewage, internet, water, trash, etc.
Still, you have to consider the maintenance costs. After all, you want the venue to remain in top-notch condition for every couple. Over time, things need to be replaced. You also need a cleaning crew to ensure everything looks perfect no matter when the couple visits.
Staff Expenses
If you want to ensure the couple is well taken care of, you need competent staff. For starters, you may need 5-10 full-time employees. If you have a big venue, you may require double the personnel. Your employees will need benefits like health insurance, retirement, sick days, etc. These are some of the things to take into account when deciding on the actual expenses for your staff.
Again, if you’re running an independent venue, you must build strategic partnerships with area hotels or staff rental companies.
What you will offer
Space
Couples want a space that can accommodate a specific number of people. Generally speaking, the space is determined by square footage, so you should be clear about the capacity. Other than that, you will require designated areas such as a dance floor, lounge area of dining room. By anticipating these critical aspects, you can tell the experience your guests will have.
Photograph opportunities
You want the couple to have a magical day that they will remember for the rest of their life. What better way to create lasting memories than by providing photo-taking opportunities? Your website should have a gallery page that shows what you have to offer. More specifically, you should highlight the interior and exterior of your space and let the couple imagine themselves in such spots.
Amenities
Many venues also act as a hotel, giving guests an option to stay in the wedding venue. For instance, you can have guest rooms for VIPs and offer shuttle services for complimentary rooms in nearby hotels.
Another essential amenity is an event coordinator. He or she can help you organize the finer details to ensure the guests have a memorable experience.
Generally speaking, parking should also be enough to accommodate all the vehicles at the event. You may want to state the capacity to ensure no car is left unattended.
Finally, you should think about where all the guests will sit. Do you have enough chairs and tables? This will depend on the number of guests you wish to handle. If they can bring their own accessories, mention that too.
Conclusion
A wedding venue can be profitable if you get the business model right from the start. The way you package what you have to offer will determine the profit margin. How much you make will depend on the location and how you organize the events. You should research your competition to help manage finances well.
