How to Manage Cash Flow for Your Wedding Business from Sage Wedding Pros

How to Manage Cash Flow for Your Wedding Business from Sage Wedding Pros
January 30, 2018


It can feel like feast or famine for the wedding business owner. One month you’re flush with client deposits, the next month you’re struggling to buy ink for your printer. Managing cash flow can be a real challenge given the seasonality of weddings and events, especially for business owners in the Northern United States who tend to slow down in the bitter cold months.


Getting a handle of your cash flow

There are 3 things that business owners can do to manage their cash flow better:

  • Create a cash flow plan
  • Create a business savings account
  • Control your client payment flow

Let’s explore each of these.

How to create a cash flow plan

A cash flow plan lays out a strategy for how you want money to move in and out of your business. When you create a cash flow plan, you are setting goals for your cash. A cash flow plan estimates:

  • Your sales coming in (from contracts and from additional sales goals)
  • Your expenses (from an expense budget)

I recommend doing this for 12 months of the year. Set your sales goals, create an expense budget. You’ll be able to see the months that slow down and adjust your plans accordingly.

Why to create a business savings account  

Wedding businesses with a savings account never have to rely on credit cards when the slow months strike. They know their businesses will have peaks and valleys and plan accordingly.

How much should you save? Start small. It can take a while to build this, $100 at a time. Ideally, you want to save for the length of your slow season. If you know that cash inflow is slow from December through February, then try to save for 3 months’ worth of expenses.

Here’s an example:

You’re annual expense budget is $24,000 – on average you spend $2000 a month. If you have 3 slow or unpredictable months, you’d want to save $6000 ($2000 for each one of those 3 months).

Your business savings will give you a nice cushion for when you need it. And, in my observation of coaching wedding businesses on finances, it’s the difference between those that are financially viable and those that are not.

How to control your clients’ payments

YOU can choose what your cash inflow looks like. You DON’T have to be at the mercy of the slow season. The nice thing in the wedding industry is that, as wedding professionals, we get to call the shots on how we receive payment, how often, and how much.

So – why not ASK the client for payments during your slow months? Rather than ask for a deposit upfront, due in October, and a final payment due in May (before their wedding) – why not ask for a middle payment in February? This is the most under-utilized step that I see from wedding professionals.

Here’s what I’m talking about:

Your CURRENT payment plan: 2 payments: Deposit at contract signing Final payment 2 weeks before the event

Your CASH-FLOW-SMART payment plan: 3 payments: Deposit at contract signing MIDDLE PAYMENT in JANUARY! Final payment 2 weeks before the event

There is no reason you cannot squeeze in a middle payment and split your payments into three (or four). You control the shots. Look at when your cash inflow is slow and ask for the money.

Yes – this creates a little more invoice management. (Aisle Planner makes that easy. Disclaimer: I’m not paid to say that.) But – it can make a huge difference with your cash shortages.

Don’t be blindsided

The last piece of advice that I have for you: don’t be blindsided. Be proactive about your finances and you’ll have much better control of your business.

Want to get a better handle of your finances? Michelle is offering $100 off of the Sage Wedding Pros’ Accounting & Quickbooks Bundle. Sign up here!

About the Author

Michelle Loretta
Michelle Loretta
Sage Wedding Pros, Founder
Sage Wedding Pros is a consultancy dedicated to educating and advising business owners on how to be completely sustainable, financially and operationally. Founded in 2009 by Michelle Loretta and Kelly Simants, the company began as a blog for providing daily insight into everything it takes to run a successful small business as a wedding planner, photographer, stationery, floral designer and so on. In 2010 and 2011, Michelle and...