How can I tell if a wedding planning business for sale is really profitable?

Wedding planners can look busy and still earn little, or look modest and earn well. The books are the only way to tell, and they can be confusing because client money moves through the firm on its way to caterers, florists and venues. Before you rely on any headline number, ask your accountant to help you read the records. Here is what to separate.

Planning fees versus pass-through money

Some planners book vendor payments as revenue, others keep them out. Ask how this firm does it and whether it is consistent from year to year. What you want to see is the fee the firm itself earns for its work, apart from money that was paid onward. Without that split, two firms with the same sales can have very different results, and comparing them is meaningless.

Commissions and referral fees

Planners sometimes receive a fee from venues or vendors they recommend. Ask whether any exist, where they appear in the books and whether clients know about them. These arrangements may depend on the owner’s personal relationships, so find out if they would continue for a new owner. Your lawyer can tell you how to treat them in the agreement.

Deposits, seasonality and timing

Weddings are booked well ahead and paid in stages. Ask when deposits are counted as income: when received or when the event happens. A firm that records deposits early can look strong just before a sale. Also review the statements across a full cycle of seasons, since cash arrives unevenly and a single strong quarter says little. Our guide to cleaning up financial records shows what tidy records look like.

The owner’s time and repeat clients

If the owner works every weekend and takes little pay, the true cost of the role is hidden. Ask what a hired lead planner would cost, and whether the firm could afford one. Then look at how much work comes from past clients and referrals versus new enquiries each year.