You probably never thought you’d be getting a crash course in economics here on the WeddingPro blog, but with businesses around the world being impacted by inflation and supply chain issues, we partnered with Nadia Anderson, CPA, CGMA, CWEP and owner of The Anderson Accounting and Advising Group and Virginia Grace Event Management, to understand how the current economic climate is affecting the wedding industry. So today, we are going to dig into the broader conversation about things like rising costs and shipping delays so you can prepare your wedding business to react quickly to change and educate your couples about how either might affect their wedding plans.
What is inflation?
You’ve probably heard a lot about inflation, along with stories about how everyday goods are getting more expensive. But, even if you consume a constant stream of news, you might not be as familiar with what it is exactly or why it happens. Here is a simple explanation from the International Monetary Fund that is relevant to what we are experiencing in the wedding industry:
Inflation is the rate of increase in prices over a given period of time. Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. But it can also be more narrowly calculated—for certain goods, such as food, or for services, such as a haircut, for example. Whatever the context, inflation represents how much more expensive the relevant set of goods and/or services has become over a certain period, most commonly a year.
Pressures on the supply or demand side of the economy can cause inflation. Supply shocks that disrupt production, such as natural disasters, or a rise in production costs, such as high oil prices, can reduce overall supply and lead to “cost-push” inflation, in which the impetus for price increases comes from a disruption to supply.
What causes supply chain issues?
Our expert, Nadia, pointed to a myriad of factors that led to the supply chain issues we face today. The biggest factors include:
- The economic uncertainty at the start of the pandemic led many of us to slow our spending so we could hold onto more cash
- Manufacturers creating fewer goods because orders are slowing
- Consumer goods taking longer to produce and travel to those who were back to spending
- Lockdowns and conflicts across the globe exacerbating the problems that already existed with labor shortages, transportation delays, and structural issues
How this is affecting wedding pros
Just like other industries slowed production or shut down for significant chunks of time between 2020 and 2021, so did the wedding industry. And with more weddings expected to happen in 2022 than in the past 30+ years, many wedding business owners are struggling to ramp back up after the forced time off.
Nadia says that this is due, in part, to supply chain challenges that you may need to address. “Now is the time for you to review your numbers, touch base with any of your suppliers to see if their rates have changed, and adjust your prices accordingly,” Nadia suggested.
These economic challenges impact different wedding businesses in different ways, but here are some examples of what you, your vendor friends, and engaged couples might be experiencing:
- Very limited availability for all wedding pros and higher rates for popular wedding dates
- Difficulty finding wedding venues (especially venues with outdoor spaces)
- Shortages of certain rentals like tents and heaters
- Staffing shortages (with assistants, servers, etc.)
- Flowers getting stuck in transit or being extremely hard to find
Pro Tip: As you’re going through your pricing, keep these pricing strategies in mind. Armed with this information, you’ll be able to price your services appropriately and fairly.
What you can do to prepare your business and your couples
Unlike the unexpected (read: fast and furious) impact of the pandemic, these challenges are easier to see coming and prepare for. The key is to plan ahead and set realistic expectations for yourself and with your couples. And here are some ideas from [EXPERT NAME] to help you do just that.
For your wedding business:
- Pay extra special attention to your calendar and give yourself extra time for everything
- Hope for the best, expect the not-so-great, and have an alternative waiting in the wings
- Review all of your numbers and see what you can do to attract and retain staff
For your couples:
- Suggest they start their venue search 16-24 months from their desired wedding date
- Create designs that are flexible with floral type and color palette
- Encourage couples to have a Plan B regardless of “how slim a chance” it is they’ll need it
You can thrive in the midst of economic challenges when you make a plan and do the work! And, if you want to make sure you are prepared to take on the coming year, be sure to read this business checklist next.
Please note: WeddingPro and the materials and information it contains are not intended to, and do not constitute, financial or tax advice and should not be used as such. You should always consult with your financial and tax advisors about your specific circumstances. This information contained herein is not necessarily exhaustive, complete, accurate or up to date and we undertake no responsibility to update. In addition, we do not take responsibility for information contained in any external links, over which we have no control.
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