COVID-19 – What Happens To My Wedding Now?

In short… not a lot.

But before going into this further, it’s probably important to outline how an events based company model works.

In the wedding industry especially, work is highly seasonal and on top of that, it’s generally one specific day of the week out of seven.

If you are in the Jewish or Asian wedding sector, this is more likely to be Sunday. If you fall into the CofE/secular wedding category, then it will probably be Saturday. If you are lucky to work both industries then your ‘on-site’ days of the week will be both. Very occasionally, some couples will choose a Friday or mid-week wedding.

It goes without saying that this does not mean that this is the only day of the week the suppliers work. As we mentioned earlier, event days often start at 8am and can finish as late as 3am and beyond for most involved. Putting the planning work that is done throughout the year aside, prep days leading up to the day itself can in many cases start on the Monday and post event wind-down will often cross-over with preparation for the following weekend. That could be rehearsals, editing, food and venue prep, or just general organisation and logistics.

In short, even though Saturday and Sunday is the day of the week most of us actually ‘sell’, the reality is that none of us really have a chance to sit down from May 1^st to around October 31st.

To put that into perspective, most suppliers generally have around 24-48 prime days of the year that they can sell to be able to cover overheads for the other 320-341.

If a business hypothetically charged around £4k for their services, and 75% of that is on the day costs, that leaves £1k to cover the company overheads and any salaries. This means that for every prime date wedding suppliers lose this year, that’s the amount they will lose by postponing it to the following year and blocking out the same dates for 2021.

So, perhaps a small business owner may sell 40 dates with a £1k profit and have a 50/50 split between running costs and a salary. Even in times such as these when most are running things at the bare basics, many of these costs are essential to keeping the company afloat. They cover; accountancy fees, tax, marketing, social media management, website upkeep, hosting, phone & internet bills, admin help, loan repayments and more. Venues, in particular, are absolutely extortionate to run at the quietest of times. How many stories have we all heard about beautiful inherited country mansions falling into ruin and disrepair because the family cannot afford the simple general day-to-day upkeep? Opening the doors of their home for private hire was the only way many could keep their heads above water, and even with 20-30 bookings a year the margins will still be slim for most.

Many businesses also rely on 3-4 booking fees for cashflow towards all of these running costs each month. With 2021/2022 dates now being taken up by 2020’s postponed dates, most are preparing not to see any significant booking fee income another year or so.

So…back to the main point…

What government support has been made available to help small businesses?

If you are self-employed and have been earning well with no big expenses for the last few years, then you might be okay (although the pre-eligibility checks that have started coming back this week don’t look great). The furlough scheme covers 80% of your average take home pay for the last three years so this generally should be enough to get by for most if you meet the criteria.

The problem is, many suppliers are not self-employed.

Most small businesses have always been encouraged by all official mediums to set up as LTD. This means the directors take a tiny basic salary and then take their share of whatever profits are left, by dividends, once everyone and everything else has been paid. This makes total sense, and doesn’t really affect tax. Taxes are paid on the lot either way.

The government have offered the furlough system to business owners as well, but on two conditions:

1.     You stop all work and…

2.     They are only furloughing the salary part, not the dividends. The Dividends is the part most owners rely on for income.

This begs the question — if business owners choose to take the furlough, who is going to run the company in their absence when nobody can afford any staff? If the company does choose to temporarily cease all trading, this will leave most with a furlough payment of around £100 — £700 per month. All of which will likely need to go back into the company to keep it afloat. Forget any living costs of the owner themselves.

The government has also offered loans and deferrals of tax, but most are reluctant to sign up for any of these schemes (as well as many many many not being eligible) as it doesn’t solve the problem. Things will only be worse when the repayments come round after losing an entire year’s worth of business.

If you have an official premises, the government has offered grants of up to £25,000. But the issue here is that most suppliers all work from home to try and keep their costs down, so there’s nothing available there either.

That leaves many directors with the minimal support of Universal Credit, which many have now signed onto (again if they are eligible, there are many hoops to jump through here) as the only thing that is available to prop up themselves, their families and their businesses.

With most paying huge amounts of personal, VAT and Corporation Tax for years, it doesn’t seem particularly fair.

So with all that in mind…

In short, nobody, in a million years, saw or were prepared for this coming.

2020 was set to be the busiest year in a long time. Many 2019 decisions were based on this forecast.

There is no one size fits all to this situation, and it doesn’t matter who the supplier is or what their competitor is doing, it completely depends on the state that particular business was in on the day this all kicked off.

We are generalising here, but we do firmly believe that the heart is in exactly the same place for each and every supplier right now.

Nobody wants to be charging more money to their clients already in such a nightmare position, and suppliers are doing everything we can to avoid it. They would be out of their minds to try and exploit their clients right now and it just isn’t the industry any of us are in. Money is a very sensitive and painful topic at the moment and having these conversations with clients you have built up such a strong relationship with can be quite devastating.

The issue many suppliers are coming up against right now is that most 2020 clients still want an equivalent date in 2021, which is completely understandable – but it poses a lot of problems.

For some businesses, this will be just about okay. They may have been well established for years and/or have been charging enough to build up strong cash reserves in case of emergency. For others, it may be a hobby or secondary income for them, perhaps they are supported elsewhere and have no major overheads anymore, so transferring one year to the next isn’t as big of a problem as it may be for someone else.

Others may be in a position to double up the work in the week and outsource the actual delivery on the day.

For newer or larger businesses, it’s likely to be more difficult. Many may have taken out start-up loans to kick their project off, or others might have just dropped a load of investment into companies to grow it to the next stage. They will now be looking at huge outgoings each month to pay that back, with no relief or help for any of it.

Some loan operators have offered up to a three month holiday, but this still leaves interest and black marks on your credit report. Either way, three months relief is not enough to see anyone through to summer 2021, which realistically is what we may all be looking at…

Some businesses have been asking clients to stick to their 2020 payment terms to help the cash-flow issue, but for others, that will leave them very short when paying their costs when the date comes round, so it is difficult for a lot of suppliers to know what to do.

Additionally, the industry had a bit of rough year last year with the fear-mongering surrounding Brexit. Many couples held off on planning a wedding due to the uncertainty, or because they wanted to wait until 2020. There were many a quiet peak weekend (oh the hindsight!).

A lot of small businesses were already in the red because of this and looking forward to a busy year this year to make up for some of that loss. The double whammy here could be too much for some to survive without the right support.

These are just a handful of reasons to highlight the different challenges each business is facing right now. Most suppliers have their own very personal stories, and there are dozens of situations to consider.

As Sarah Haywood said on Sky News this week, unfortunately, some businesses are going to have to try and charge small postponement fees for certain dates. For some, that will cover being able to put food on the table this year and keep themselves above water. As long as they are fair, these suppliers are not the bad guys. It’s because they are totally unsupported by the government, whilst still trying to do absolutely everything they can.

For the few that have been lucky enough to pick up jobs elsewhere, they are still mostly minimum wage. Consider that they will now be trying to manage both those jobs at the same time. Some whilst single-handedly trying to feed families if their partners are out of work as well which is the case for many.

Even with a postponement fee, the supplier will still be nearly certainly making a huge loss on this date either way. They might just be asking for your help to meet in them in the middle for certain dates and ensure they will still be here to deliver for you next year.

This week, the CMA Watchdog announced that they were launching an investigation into complaints that some firms are failing to refund customers for cancellations due to Coronavirus. They shone a light specifically on the wedding industry, the travel industry and also nurseries.

There has been a lot of coverage on this in the media. The BBC, Jeremy Vine and Martin Lewis have all reported on it and forums and social media pages are now on fire over this.

Quoting directly from Money Saving Expert:

“CMA guidelines effectively say it doesn’t matter what’s in the contract – if you’re not delivering the goods or service to customers, they have rights, and they should be given a full refund.

The CMA has issued a statement on its expectations around cancellations and refunds.

It says that for most consumer contracts, it would expect a full refund to be issued if:

·A firm has cancelled the contract, and hasn’t provided any of the promised goods and services.

· The firm hasn’t provided any service – for example, because lockdown restrictions prevented it from doing so.

·       A customer cancels or is prevented from using the service – again, an example would be if lockdown restrictions prevented them from accessing the service”

This leaves both clients and suppliers in a very difficult position, as it is all very grey and currently only really applies to cancellations due to lockdown and government restriction on weddings.

With lockdown due to ease in the next few weeks, and nobody really having a clue about what the government guidance will be on weddings beyond that, this guidance from the CMA doesn’t really help any of us.

In our experience, most suppliers have been going above and beyond to forget about their contract and move dates at a client’s request. Nobody wants to be dwelling on contracts and Ts & Cs at a time like this, but to move a date for a client based purely on speculation and worry would usually be classed as a voluntary cancellation by the client – especially when on this kind of scale (most companies have a few grace spaces for this per year).

To fight the corner a little bit, suppliers have generally been doing this without question, right up to beyond September and October, at monumental loss to their companies – even though the government have only told us all weddings can’t happen right now, at this very moment…

With all that in mind, it feels a little bit unfair to have had so much negative media attention on our industry.

Fortunately, most clients have been requesting postponements over cancellations, but it’s well worth all parties being made aware of the above CMA standards, just in case this does officially all roll into July, August, September and beyond.

If it does come to it, and Weddings are banned for the rest of the year, then what the CMA are saying may be fair.

To a degree.

We aren’t billion dollar airline companies though…

We are small family run businesses, who are a sector that have been severely overlooked for government support. With all of that in mind, it all feels a bit painful to be shining a light very specifically on our industry.

The problem is; No matter what is going on right now, what the CMA are saying and whether we all think it’s fair or not… If the booking fee was contracted as non-refundable, that is how it will have been treated by the business up until this point.

Suppliers are not being evil, crooks or cowboys. Their contract and Ts & Cs are reflective of the business model they have operated by since the very day they started their company and they chose those terms for very specific reason.

The bottom line is; Nobody saw a global pandemic coming, and for many small businesses, the non-refundable booking fee will have been liquidated into the running costs of each company at the point of booking.

Now all eyes are on them, whilst they have been completely forgotten about by the government, and if this goes ahead, many will be stuck.

If it does come to the point of cancellation and refunds on this kind of scale, small businesses with good hearts (the stark majority) are going to be breaking their backs to get those refunds together and it could take an extremely long time. Perhaps even beyond a year for some, without companies going into administration.

In a bid to have kept their costs down at the point of sale, many will have no assets or cash reserves whatsoever and with cashflow nearly completely ceased, they will be trying to find money for these refunds, quite literally, out of thin air.

The sad truth is that, if the government continue to offer a lack of support for small businesses, and this legislation is enforced, some may be forced into administration either way.

All a watchdog investigation into refunds (that a business cannot physically manage) is likely to do, is close it’s doors for good.

This will help neither the client, or the supplier, or the industry as a whole.

So…

If we do hit worst case scenario, and the government cancel all weddings in the coming months, we understand that a full cancellation may be a route you need to take.

If that time comes, please consider all of your suppliers position here also though, offer them some compassion, try and meet them in the middle if they need it or at least expect it to take time.

If you can avoid it, and are in a position to support the industry, please consider postponing ❤️

Despite what you may be lead to believe by the media, this industry is full of loyal and honest people who are ready to do the best they possibly can to protect their clients and their businesses.

It’s just that many are struggling just as much as you are.

As many blogs and articles have said over the last few weeks, avoiding full cancellations to start with, and picking an off peak wedding date to postpone to even better, is the compromise that will help both suppliers and couples the most.

We cannot really stress this enough.

Whist others might be fine, the volume of peak postponements wanting to now move to peak dates in future is becoming too much for some suppliers to handle. Even though everyone is aware it’s because of a global pandemic and being treated as such, on paper, it’s still essentially two dates for the price of one.

Everyone is equally suffering here to some degree, and for suppliers and clients to find a way to meet in the middle seems to be the reasonable and fair outcome.

Peak dates are Saturdays from May to early October, and if you are planning a Jewish wedding, Sundays within this period.

All other days of the week, and dates of the year are, generally, not peak.

If your friends and family are not Jewish, Sundays are fair game and usually make up 50% of the wedding industry anyway. A Sunday wedding is very normal for many suppliers so it would be nothing new. Fridays are also far less peak, and Thursdays are already a very popular date with some top venues.

Not only are you very unlikely to be asked any extra fees for these dates, you may even find many suppliers are desperate to reward you for not picking prime dates to postpone to.

We can’t speak for everyone, and we are definitely not out here to try and be a voice for the whole industry, but we HAVE seen suppliers offering discounts on balances for mid-week, Friday, or non-Jewish Sunday weddings.

We know it might not be ideal for your guests, travel and time off work, and sometimes this will not be possible with your venue’s licensing rules. If you are in a fortunate enough position to be flexible though, it might not hurt right now to ask if your supplier could offer you some money off your balance for moving to an off-peak day. All of us are expecting and prepared to take a huge hit, it’s just how much of a hit small businesses can realistically manage.

Meeting suppliers in the middle would help a lot of businesses regulate their diary, losses and cash-flow, and although we can’t guarantee it, you may well be rewarded and have a chance at a cheaper wedding overall if you can be flexible.

It is important to be clear that many businesses will simply not be able to manage any more of a loss at all though, so if you do ask, please consider this if a request is denied and try to be compassionate. Please try not to target these businesses and paint them out to be the bad guys. Their sole purpose in protecting their company is to ensure that they can be there for you when it comes to it. Consider that it would be far easier for many businesses to wind-up, than struggle their way through this. Most are doing everything they can to avoid that for the sake of their clients. That also goes for one supplier who may only be able to offer a 2% discount when the other can offer 10. Many suppliers are on their knees at the moment and if it’s a no, it will be a case of can’t help as opposed to wanting to help. We all desperately want to help where we can, but as we said earlier, there is no one size fits all here. Some things just are not physically possible.