I've been in the Wedding Industry as a Photographer for 5 years now and every year I book more Weddings. This year I've booked 29 Weddings at an average price point of $4,000. This industry seems so healthy and vibrant it's interesting to me that more companies don't take advantage of it. I parallel this industry with buying a car: On average we buy cars with a price point of $20-$30k, Weddings in my area have a median price point of $20-$30K yet I don't see Wedding companies on every corner like auto dealerships.As a photographer the venue is the MOST important aspect of the Wedding Day. A majority of the venues in my area are dated with a small number being relatively new. The newer locations book 75-150 Weddings every year with a price point of $20-$30k per event. I called all of the major venues here and they quoted me these numbers. Astounding numbers I think for this economy...So, long story I know... I'm looking to build a new venue that offers a completely different aesthetic. This space would serve all functions of a Wedding Day and be built with photography and imagery as the primary selling point. The aesthetic is the main selling point, not the idea of building just another venue with little to no care in terms of design and aesthetic. Another HUGE selling point is the use of social media. All of these local venues have terrible, and I mean awful, web presence. Images are dated, information is hard to find... the overall presence is stagnant. I started my business renting camera equipment 5 years ago and have grown a very healthy revenue stream from Zero funds upfront. Unlike the photography niche, where anyone can buy a camera for $500, this niche requires significant financing. I expect the development to be at least $1 million in expenses.I have a business plan, market analysis and potential revenue for 3, 5 and 7 years out....Should I mainly look at private investors for this type of business or should I seek Gov/Bank financing OR Both?Thanks in advance for your input.Joel Cookstonhttp://www.joelcookston.com/
Joel,
Couple of things. While your current business might have a solid track record - unless you are willing to give up ownership in that business, you will not attract any professional investors for your start-up idea. However, you might be able to tap local investors should you pursue that option.
Know that a bank loan or private equity really depends on you and your business model - it is not as simply as choosing one or the other. Investors want large return potential, intellectual property (so that not just anyone can come in and steal your market) and a very scalable market (which you might have depending on your business plan).
Local investors may require less but will probably invest less.
Banks or other lenders, on the other, just want to be repaid – thus, you just have to show that you can cash flow the loan payment. But, also know that if your cash flow comes from your existing business – they will attempt to place liens against it.
I would suggest this. You should be able to cash flow the initial start of your development. Break it down into simple steps and self fund, if you can, until you get some type of track record (sales or customers or visitors or contracts, etc). Then start looking forward on scaling your business – this is where most of your expense will come from. Break this down either monthly or quarterly – then seek funds to get you through those periods.
What you will find is that you don’t need a million up front and might not need it for the entire project. Think about it as a ”just in time” financing concept. Get what you need and only what you need, when you need it.
We have created a searchable database on our website for business owners like you. You can search for lenders or investors based on your needs. It has no cost and will get you started in the right direction of better understanding where you should be going.
Joel,Couple of things. While your current business might have a solid track record - unless you are willing to give up ownership in that business, you will not attract any professional investors for your start-up idea. However, you might be able to tap local investors should you pursue that option.Know that a bank loan or private equity really depends on you and your business model - it is not as simply as choosing one or the other. Investors want large return potential, intellectual property (so that not just anyone can come in and steal your market) and a very scalable market (which you might have depending on your business plan).Local investors may require less but will probably invest less.Banks or other lenders, on the other, just want to be repaid – thus, you just have to show that you can cash flow the loan payment. But, also know that if your cash flow comes from your existing business – they will attempt to place liens against it.I would suggest this. You should be able to cash flow the initial start of your development. Break it down into simple steps and self fund, if you can, until you get some type of track record (sales or customers or visitors or contracts, etc). Then start looking forward on scaling your business – this is where most of your expense will come from. Break this down either monthly or quarterly – then seek funds to get you through those periods.What you will find is that you don’t need a million up front and might not need it for the entire project. Think about it as a ”just in time” financing concept. Get what you need and only what you need, when you need it.We have created a searchable database on our website for business owners like you. You can search for lenders or investors based on your needs. It has no cost and will get you started in the right direction of better understanding where you should be going.
Phanio~ Great information - and thank you sooo much for taking the time to give me a few tidbits of advice. I will definitely check out your website for potential leads. And yes, taking small "baby steps" is a great way to go about tackling such a grand idea. The question I ask myself is - If I'm selling a product how can I sell this product on a small scale and grow it over time. If I could start this business in my garage like my current business I would.. however I don't think my clients would like to be married in my garage... thnx again for your input. Cheers~
Joel,Couple of things. While your current business might have a solid track record - unless you are willing to give up ownership in that business, you will not attract any professional investors for your start-up idea. However, you might be able to tap local investors should you pursue that option.Know that a bank loan or private equity really depends on you and your business model - it is not as simply as choosing one or the other. Investors want large return potential, intellectual property (so that not just anyone can come in and steal your market) and a very scalable market (which you might have depending on your business plan).Local investors may require less but will probably invest less.Banks or other lenders, on the other, just want to be repaid – thus, you just have to show that you can cash flow the loan payment. But, also know that if your cash flow comes from your existing business – they will attempt to place liens against it.I would suggest this. You should be able to cash flow the initial start of your development. Break it down into simple steps and self fund, if you can, until you get some type of track record (sales or customers or visitors or contracts, etc). Then start looking forward on scaling your business – this is where most of your expense will come from. Break this down either monthly or quarterly – then seek funds to get you through those periods.What you will find is that you don’t need a million up front and might not need it for the entire project. Think about it as a ”just in time” financing concept. Get what you need and only what you need, when you need it.We have created a searchable database on our website for business owners like you. You can search for lenders or investors based on your needs. It has no cost and will get you started in the right direction of better understanding where you should be going.
Phanio~ Great information - and thank you sooo much for taking the time to give me a few tidbits of advice. I will definitely check out your website for potential leads. And yes, taking small "baby steps" is a great way to go about tackling such a grand idea. The question I ask myself is - If I'm selling a product how can I sell this product on a small scale and grow it over time. If I could start this business in my garage like my current business I would.. however I don't think my clients would like to be married in my garage... thnx again for your input. Cheers~
BizResearcher | Window Shopper |
7/19/2011 - 11:30 am
I am also in the events industry. You must be located in a very large metropolitan area to generate the prices you mention. For every couple that spends even $10,000 on their wedding, there are dozens of couples who spend only a few hundred dollars or just go to the courthouse.
One thing to remember is that, though people always get married, the industry is extremely sensitive to fluxuations in the economy. Having an expensive wedding is a luxury, not a necessity. Therefore, when the economy goes down, as it has recently (and in 2001), people pull back on their spending. We have seen venues sitting empty and I have been able to book events where I got the room for free with the purchase of food so the venue could provide work for their employees. Therefore, I am wondering if you have thoroughly researched the market as a whole or only a narrow niche in your location.
You have some interesting ideas and I agree that many venues either have no web presence or don't know how to market it, nor do many use social media. That opens a whole area of marketing for you.
You are asking for quite a bit of money to start your facility. I doubt that you will be able to obtain much of that from a bank loan in this tight market, particularly when you can't guarantee your monthly income to support repayment. You may want to visit with a counselor at a small business development center or an SBA office in your area. Their services are free and they can offer insight into your local market and into financing options.
I am also in the events industry. You must be located in a very large metropolitan area to generate the prices you mention. For every couple that spends even $10,000 on their wedding, there are dozens of couples who spend only a few hundred dollars or just go to the courthouse.One thing to remember is that, though people always get married, the industry is extremely sensitive to fluxuations in the economy. Having an expensive wedding is a luxury, not a necessity. Therefore, when the economy goes down, as it has recently (and in 2001), people pull back on their spending. We have seen venues sitting empty and I have been able to book events where I got the room for free with the purchase of food so the venue could provide work for their employees. Therefore, I am wondering if you have thoroughly researched the market as a whole or only a narrow niche in your location.You have some interesting ideas and I agree that many venues either have no web presence or don't know how to market it, nor do many use social media. That opens a whole area of marketing for you.You are asking for quite a bit of money to start your facility. I doubt that you will be able to obtain much of that from a bank loan in this tight market, particularly when you can't guarantee your monthly income to support repayment. You may want to visit with a counselor at a small business development center or an SBA office in your area. Their services are free and they can offer insight into your local market and into financing options.
BizResearcher~ Thank You for your info... It is incredible to think that out of the 24 Venues I spoke with last week the lowest number of Weddings held annually was 42 and the highest was 164. While I do know that Wedding Costs can be from all ends of the spectrum, the Venues I've mentioned cannot be booked for less than $15k per event. This is obviously a percentage (as you mentioned) of the total number of Weddings done here locally. This is also the demographic I would be appealing Also, if I'm selling a product to a niche market (my area) I believe the industry numbers as a whole would take the back burner. Yes, it's very important to check out how other communities and other markets are doing, however I feel it's more important to use the market data that applies to where the product is sold - the eb and flow of the entire national/global market plays little role in such a local product I feel... and maybe I'm wrong- I've been known to be wrong a few times. :)
I will definitely check out all the resources at my disposal to help guide me and the decisions to spur this idea along. Thanks again for your feedback and I do hope everything goes well for you this year~!
Cheers~
ngoriel | Community Moderator |
7/18/2011 - 8:49 pm
Hi Joel, you can visit our loans page at http://www.sba.gov/category/navigation-structure/loans-grants for information on SBA guaranteed loan programs.
SBA also has resource partners like SCORE, Women’s Business Centers and Small Business Development Centers located across the country that provide free business counseling to individuals looking to start or expand a small business. Visit SBA Direct at http://www.sba.gov/sba-direct to find your local SBA resource partners by entering your zip code.
phanio | Contributor | 7/19/2011 - 3:21 pm
jcookston | Performer | 7/19/2011 - 7:40 pm
jcookston | Performer | 7/19/2011 - 7:40 pm
BizResearcher | Window Shopper | 7/19/2011 - 11:30 am
jcookston | Performer | 7/19/2011 - 7:53 pm
ngoriel | Community Moderator | 7/18/2011 - 8:49 pm
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