Deep Dive: 40% Margins and Insane Demand in the Wedding Venue Business. Ep. #94

Is there a model where you could find some beautiful venue that's not being used as a wedding venue and manage all the business side of it?

I know of a party bus company near us. They started literally like a year and a half ago and they have 30 buses now and they'll do like 30 events a night. We booked almost 100 weddings before we were done with construction. It was almost like 300 grand in deposits before we were like open.

What told you that? There was so much demand. What would you counsel someone to do if they were wanting to dip their toes into this? Well, why don't you tell us who you are and what you do, Alex?

So my name is Alex Nelson. I am the wedding venue guy on Twitter, which is probably what most people know me coming from. Your followers. Yeah, I am. I'm in. Based in Iowa. So my wife and I, we decided to build a wedding venue when we were like 25 or we had had the idea, you know, when we were getting married. A lot of people do, you know, they see the, the dollar signs and the amounts these venues are charging. It's kind of easy to do, you know, the, the back, back of the napkin math and kind of look at the dates and how many dates they're booking up and, and see their revenue sort of thing, which is definitely something that we did too. I also always wanted to kind of get in real estate. So we kind of felt like it was like best of both worlds. My wife would kind of be on the, the wedding side and this would get me into like a, a big real estate play essentially. So we were getting married. We got married in 2018. Fast forward more to like 2020 and we were like just fresh out of college, so we didn't have money then to necessarily do it. And then mid Covid, you know, we were thinking of what to do. My wife was teaching at the time and really just not liking the teaching world and kind of like all the craziness that was going with that. And she was very dedicated. I was doing like multiple remote jobs basically. So I had like two, two full time jobs and was going at once and she was still like working more than I was just because she would like go in earlier, stay late to get ready for the next day. So I was just like, what are we doing here? Like why, why sort of thing. And so she's talking about becoming like a wedding planner and kind of getting into that world. And then we kind of just went back on the idea of, of the venue. And since I was doing multiple Jobs like we were still living like we were in college and saving as much cash as possible. I thought I was going to buy some sort of investment property, but kind of went back to that idea and we were, I think we were like 25, 26 when we really started to kind of like dive in to it. The whole process took us about two years, probably a year and a half, two years probably from like actually getting into it and like putting some sort of like money towards it to like actually being open and having our first events.

Can I ask, like, what did you first see in the wedding venue space that really made you fall in love with it, where you just couldn't get it out of your head?

So definitely was like being the client first, you know. So going in our local market, touring the you know, five to six like venues, you know, there's, there's lots of venues and places to get married. But like when I think of or talk about venues, it's like these standalone like purpose built buildings basically like just for weddings now. So there's only like so many in our area. And then like just seeing those being booked out a year and a half, two years in advance is just like what is going on? Like I had no idea. I didn't care about weddings at all before, you know, starting to plan our own. And so I was just like this big beautiful building like booking for you know, six, $7,000 a night, you know. And when I was thinking about like rentals and stuff, I was just like, this is like way more per night. Like this seems like way better.

Right?

You know, I later found out that it's like a full on true like operating business and not just like a real estate like rental play. But that was definitely like what, what stuck in my mind.

Yeah, here's kind of a random question that I'd never thought of before. Let's say someone wants a wedding venue and they don't want to go spend a million dollars on a building and convert it or whatever. Is there a world or is there a model where you could find some beautiful venue that's not being used as a, as a wedding venue and kind of like manage all the business side of it and just say, hey, I'm going to give you two grand every time we host a wedding there. And then you just manage all the business stuff. Because a lot, a lot of the owners of these beautiful properties probably don't want to own a wedding business. Right? Is that a thing?

I don't know if it's a thing, but it Wouldn't surprise me. I think you know, the trend, especially like Covid and things like that is like there, there is like a lot more like micro weddings or smaller weddings. You know, you don't necessarily have to have 3, 4, 500 people there. So then that creates an opportunity for smaller venues or more unique venues and then you know, the more unique is more Instagram worthy and kind of like going towards these like it's almost just like, you know, we're talking about like Isaac French and like going to like those micro destination resort type properties. You're almost doing like you could do that with like venues also instead of like these huge massive like name brand hotels, you know, you go into these micro resorts basically. I don't know if that's answering your question, but there's definitely like opportunity there where like 50, 75 person weddings and they almost generate just as much, you know, or if they're super high end or things like that or. I think what you're maybe saying too is just like leasing space from like a builder bigger building or space that's not getting used. I do think there's opportunity there, but you probably would have to like put some sort of capital into it to make it like fit the wedding space. Ready?

Yeah.

You know, I think that the trap people fall into is like they have a building, it could hold 300 people, but that doesn't necessarily mean you can go get you know, 5 to 10, 15 grand a night for it. You know the venues that are getting that or even more depending on your market is because they have a bridal suite, have a groom suite, they can have space for them to get married on site, inside or outside, you know, and then have the reception that holds the 300 people. I feel like people get really fixated on like just being able to like sit or hold 300 people. So you had to like think through like the entire day like that they're getting that because. Or we get that because people run our space from 8am until midnight. You know, they get ready there, they have their makeup and hair and makeup start like at right away at 8 and then you know their whole family and all this stuff. So definitely gotta like think through all that. But yeah, I mean if you could find a space and like you know from like this like real estate owner that has no idea about the wedding worlds and just you know, do some sort of like rev share or like profit share or something on every wedding that you booked, could definitely be an easy way to get in. Yeah.

Okay, so how did you go from this dream, you've done some research to actually getting the money. Did you raise the money, did you save the money and how long did it take you to go from, from that to your open?

Mostly all of our money, we, we saved it. You know, like I said, I was working like two full time jobs. We live in Iowa, you know, living cheap, living like we're still out of college for those first few years. So I was always big on like personal finances. Had like a huge spreadsheet with like our entire budget and like how much money we had coming in, like I could project out or thought I could project out exactly like what we'd be able to save basically. So I knew like once I could like get up to like the 100k range, like cash, I could probably like make something happen originally, you know, I thought I could build something for 1.5, you know, and then I started learning by SBA loans and I was like, all right, like 10% down, you know, get to like 150 somehow and we'll figure it out. So yeah, that's basically what we did. And then I, you know, I learned, you know, in the SBA loan, like the money you put towards like, you know, if you paid for like consulting or paid start paying for renderings or like, like all your design plans and things like that, that like what you spend on that can be kind of towards like your equity, towards your, towards your down payment essentially.

Roll it in.

So, you know, that's that like looking back, it was definitely like risky, but I was just like, will figure it out. So like we paid, you know, five grand for like consulting up front to someone that owned like a venue and was kind of like doing like helping with design and things like that. And our parents were definitely like, we were talking to them about this and things like that and we kind of like argued on like just that starting point too. Like the, you know, they felt like it wasn't necessary. But I was also like, I knew like we had to spend money to start. Then it like became real basically like forced us to like not just talk about it and, and actually do something about it. So yeah, we didn't. I, I would say like, at no point did I. We have like 200, 300 grand saved up, which is like ultimately what we ended up putting towards the, the building. Like just sitting there, cash. Like, we, we got close and we started spending money and like slowly inching our way towards it. You know, it was like Covid or 20, 20, 20, 21 time frame. So, like, we were working with a builder, and we'd have, like, pricing at, you know, 1. Pricing at, like, you know, 1.5. And then it would take us a few months longer, and then all of a sudden go back and it's 2.1 now, right? To, like, you know, down. So that happened to us like, three, four times. But ultimately then our parent. Both of our parents did end up giving us 40,000 each, so 80,000 total. And then we came up with their difference. That was never, like, the plan. We're not from, like, super wealthy areas, you know, like, my parents live in a small town called Wolfer, Iowa. Like, I promise we're not, like, rolling in. And that was like. They just, like. That only happened because, like, we, like, already had the plans in place. We literally had people, like, begging to book the venue. Like, it was at that point, it was like a slam dunk.

Okay, so there was demand already in place.

Definitely. We basically ended up getting renderings done, and we booked almost a hundred weddings before we were done with construction. Whoa. Yeah, that. So that's like, a whole nother story.

Too, of, like, what's. It's that half a million dollars.

We were taking, like, 50% down. Our Saturdays were like 6500. Fridays, like 5500. So it was almost like 300 grand in deposits before we were, like, open, essentially, but crazy. Yeah.

Were they booking off of renderings?

Yeah, I'd say about half of those were straight, like, renderings. We had maybe started, like, dirt work and they could go drive by, like, the site and things. Our whole project did end up getting delayed a bit, too. So that was like, a whole nother. Whole nother problem. Eventually then we did start doing, like, construction tours, but for the most part, like, renderings. We had, like, a renting walkthrough. And then, like, instead of doing a tour, like, my wife and I, we'd either meet these couples at a coffee shop nearby or we would. Or we would do, like, a zoom call with them.

Where did all these bookings come from? How did you find these hundred?

Yeah, people mostly just Facebook, Instagram. We did, like, pay to be on, like, the Knot in the Wedding Wire. We still do. I know you're. You're One post about the not in the Wedding Wire. Fully agree. I pretty confident there's fake leads being pushed on that site, but we do still get some. Some.

So worth it.

Yeah, we're locked in. I think we pay, like, six grand a year, so, like, one wedding from them basically pays for it. You Know, some other people are paying like 20 grand. Like their pricing was like all over the place, right? And like, I'm surprised they've never tried to raise it on us, but they never have. Probably just because they don't even know.

But they're afraid.

Probably.

It's funny because after I tweeted for anyone that didn't see it, I just tweeted hate about the Knot.com and how people were insinuating that they feed fake leads through bots, which other companies like Ashley Madison has have done. Right. Cause they're incentivized to give you leads. Cause that's how they charge. And it went viral. Like it went viral on short form video and on Twitter. And like the next day, the account manager that I had booked with and she had already booked a follow up call with me, she just quietly canceled. She never emailed, never said anything. She's like, okay, all right. I was very careful to not mention her, you know, like, I didn't want to bring her into it.

That is hilarious. Yeah.

All right, so when you say Facebook and Instagram, were you just like posting organically? Were you building in public, like status updates? Do you get a bunch of followers?

What did that look like? Not building public? I didn't really start doing that maybe until like Twitter when I got in there later. But yeah, mostly just posting. Like our. Like, we just made a Facebook page, you know, and started posting the renderings and made an Instagram page. Sorry, but we maybe ran some ads here and there, but nothing. Nothing crazy. We still really don't. Yeah, pretty much just all organic. Um, it really just goes back to like, there was like such a need in our area and a demand for like another venue. You know when you say you're going to open up in 2023 and you know every other venue around you is already booked for 2023. And there's plenty of people that don't want to have to wait two years to get married. You know, there's. There's quite a few leads come in from that. So.

So what told you that there was so much demand? How much research did you do versus just anecdotally talking to people, having a wedding there yourself.

You knew mostly, like looking back, like, we thought we really, really 100 knew, but it was probably more just a gut feeling and like we were the clients first, I would say. It's like we were, you know, we went to like fresh out of college, like, we got married, like all. So like at this time when we're trying to build, like, is the time we're going to weddings for, like, all of our friends, all, like all of our cousins, all of our, you know, everyone like our age. So, like, we, you know, we were the clients, essentially, or. Yeah, we're like the same clientele, basically, so. And also, like, we. We were doing something different too. Like, right. We built a modern, like, all black building when, like everywhere around us here in Iowa is farmhouses. And I feel like the farmhouse trend, it's like people are like, not everyone in Iowa lives on, you know, a farm and wants to get married, like, with cornfields in the back sort of thing. Not everyone's, you know, super hillbilly. Like, like some might think. But so there was a need for something different design wise. So, yeah, played into it as well.

Thank. Thank you, Chip and Joanna, for paving the way.

Definitely.

So I'm looking at Google Maps called the Midnight Gem. It's in Swisher, Iowa.

Yeah, Swisher, technically. Like, so Cedar Rapids is like the next plot of land. Like, okay, Cedar Rapids. So we're basically right between Cedar Rapids, Iowa City, which are decent size. Okay. Cities.

Yeah. So on one hand, it's like, wow, you're in the middle of nowhere. You're off a highway. But, you know, who thinks to have a wedding venue right up a highway, so let's scratch that. But on the other hand, like, I. I'm a total location nerd. Retail nerd. Like, I love traffic patterns and all that. I. I like following the barbell strategy. Right. You might not invest in Cedar Rapids, you might not invest in Iowa City. Those are kind of saturated. But between those two cities, you. It's still affordable and all the growth is heading that way. So is that kind of what you were thinking?

Yeah. Yep. Yeah. If you really want to, like, dive in, like, location, like, you go, Iowa City. There's like a bunch of towns like North Liberty, Coralville, Tiffin. Those have pretty much all merged into like one big city.

Right.

Like, same things happening, like Cedar Rabbits, Marion, Hiawatha, those kind of things. And like, basically the growth is like the same. Like what you're saying, like Cedar Rabbits, Iowa City are basically merging also. And that goes through Swisher, which is right in. Smack dab in the middle.

Okay, so how much all in to launch and then how much time did it take?

Yeah, all in about two, nine. That's land building, furniture, fixtures, equipment, everything. And then I think we would have got the land under contract December 2020. And we officially opened October 2022.

So. Okay.

About two years?

Yeah, almost. Almost two years. Okay. And then were you able to use some of the deposits to help pay for the loan or the note or did you have to keep that separate?

That wasn't like the intention, but yeah, we did. We ended up having real cash in our bank account that we have, you know, and then you. We like had like building costs. We basically could end up, you know, anything over which we did end up going over, like we could just front it with the cash that we had.

Okay, was there a point during this process where you went from like really worried if this is going to work to just like really excited because you knew it was going to work? What did that look or feel like?

Lots and lots of ups and downs. You know, at the beginning you're nervous, kind of get into it. It's like, okay, this is going to work. Like let's, we're really going to do it. Like this can be life changing, blah, blah. And then when you're in the thick of it and like we were like facing construction delays and like constant like price raises where like, you know, we, we might fold, you know. And then we started taking deposits in and it's like, okay, we have to make this work, otherwise like we are literally screwed sort of thing. So yeah, I think once we finally got past the like, are we even going to like finish the building? Like we kind of like could be like finish the building and then finish on time also because like we had weddings booked, right? Like for October 1st, like we had to be ready.

Yeah, because it's like you're getting all these bookings, which is a great proof of concept, product, market fit, whatever you want to call it. But the fact that you don't have a building yet almost heightens the anxiety level.

Right. It's just like stakes or high. 21, 20, 20 year old me would say like, oh, if you have like 300 grand in the bank account, like all would be fine. Like it doesn't matter. Like you could deal with any problem in the world. It doesn't matter. But now, like you still feel that anxiety and that pressure and like eventually like those numbers just start, don't mean anything. You know, you still have to perform. So.

Okay, so I'm looking at your venue on Google Earth and when I think of like a more rural, ish, like Chip and Joanna type wedding venue, I think like some sort of a natural beauty, right? Big trees, water feature, something I was cornfields. And it looks like from what I see on Google Earth, there's a bunch of cornfields around you. How did you approach that? Did you, did that concern you or did you think like the beauty of our building is what is we're going to lean on and not necessarily, you know, hundred year old oak trees.

Yeah, it's definitely was like a hard, hard decision kind of to make. What led us to like our location, like where we are. It does kind of feel like we're in the middle of nowhere. But like if you knew the area like compared to other venues, we're actually not like we all ride off like a major like interstate actually and ride off a highway also. So like 380 is like a bit like the big interstate near us that goes through Iowa City. So like in that sense like we're like really close to things. Like the airport is actually like five minutes away from us just that way. And there's like four hotels right there that are less than four minutes away. So that play like a big part of like we're near the airport, we're near hotels, easy access off the interstate versus like all the other like venues are like farm like barn venues. So like they're on like 10 acres, you know, like off a gravel road sort of thing. That's like typical Iowa and what you might think of. So we're actually not. Which then we felt like played into like what we were doing with like the modern building is like we don't need to be on like a hundred acre farm to like get that beauty sort of thing. And as far as like the, the live oak trees, like we just don't have those around here. So it's like that, that was never going to be a thing. You know, it is mostly cornfield. You know, we, we did the building and then you could look at pictures. Like we have like a putting green like out there and we built like a little like waterfall like next to that. So that's sort of the thing. But like, yeah, we're definitely leaning on like we were like the new modern like cool looking building and like our venue was like we're like based around like the building basically versus like the scenery or being out in the middle of nowhere sort of thing.

All right, if you are watching this clip right now, you are watching this on YouTube and if you are a fan of podcasts, please check out my podcast while you're at it. Because sometimes I have podcasts that aren't on YouTube and sometimes I have YouTubes that aren't on podcasts. So check out the Kerner office on any podcast platform or you can go to tkopod.com also my newsletter, we'll throw that in there. There are no ads. It's weekly. It's different content than my podcast and YouTube newsletter.chrisjkerner.com you'll see the link and we'll see you there. Okay. All right. So you opened late 2022. What did your, what did your first years of revenue and profit look like until now?

Yep. So 2022, top of my head. I, we only had, I think we had like 14 weddings that year. So 150ish, maybe revenue wise. But like first full year was last year. So 2023, we did about 800,000, 780, I believe. And then, so if you look at that like, like NOI, basically. So not including debt was like 330, I believe. And then this year we should do more like 850 or so, pushing 9. Hopefully we'll see how these last few months wrap up bar wise. Mostly the big variant, but similar numbers. We put a lot back into the building and hired more staff. And next year I feel like it should even out a little bit more. So we should have a higher noi, but our profit, ebitda, whatever metric you want to go off of.

But so are you looking at like not including your, your loan, like 40% net margin?

Correct.

Okay, that's amazing. And you look at this more of like a real estate play or a business play? Because you say. No, I, I think real estate, you say ebitda. Yeah, business.

I guess I've went back and forth a lot. It really depends on you're asking. I will say the more and more we get into it, it is more of like a business play than just like a real estate play. Like there's like a full on like operating business in that building essentially.

Okay, so here's kind of a random question. I we DM'd about this a while ago, but I asked this both selfishly and for anyone listening because this could apply more to them. I live in this house. We built it eight years ago. It's our dream house. But we're probably going to move at some point. We're going to build another one. And we thought about having this as a wedding venue. And we never would have thought that before until we were forced to move to Houston for my daughter's health issues. We put this house on Airbnb and about half of the people that rented it, rented it for a wedding. And they got a steal of a deal because it was like 800 a night. Right. So that's a pretty cheap wedding. And it's. It's in an area where it would make sense for that. We're 30 minutes from downtown Dallas. We're on a few acres. There's parking lot, the big ceilings. Is there. Is there a model where someone could buy a house in an area that would allow for zoning or no zoning in a more rural area and convert it into a wedding venue like this? Because if you go price at a wedding venue, it's going to be priced like a business, right? With a multiple. But if you go buy a house, it's going to be priced like a house. Is there anything there?

Oh, yeah, definitely. Definitely. I think the biggest hurdles would be like, zoning and then like, if your county or city does allow it, then it's like parking issues probably. Because to really get up there on like the rental, you probably need to be like, holding more than like a hundred people, right. To like. And then, then just goes to like, logistics, right? So like a nice beautiful house. Like you have the area, you know, and somewhere like Houston or Texas, like, the weather is generally nice, so like, you're good there. Other areas like Iowa, not so much. Like if they have to be like inside or weather's unpredictable sort of thing, but then they're. It still wouldn't be there. Definitely would still be like a real business aspect to it. Right. Like, you'd have to get like the tents lined up or do that. Like, unless you're doing a lot of the things for them, the rental fee that you can charge is probably not going to be that high. Like, so you rented it for 800, but they probably brought in what, their own tents and caterers and alcohol. And if they had to get some sort of alcohol license for that or not, or maybe they just did it, you know, to call like all these things. Like we have like all the table and then their own, like, tables and chairs and things like that. But if you had this house, you turn it into a wedding venue and you could have some sort of structure like that, like a permanent tent or if the house is big enough to actually hold 100 plus people in like one room, sort of a ballroom. That can make sense. There's just like so many, like, different ways to go about it. So definitely, yes. You just have to get a little creative, I think.

Okay, interesting. Yeah, it's just something that we've kind of talked about these last couple of years. All right, so let's talk about other opportunities in the wedding space. Like wedding. Wedding rentals. You know, I posted about Wedding arch rentals, luxury bathroom rentals. Do you see opportunity in that space from someone in the industry?

Oh yeah, tons, tons. Cause like things are like always changing too, right? It's all about like Instagram and like new things. So even if there's like a, you know, you didn't want to be like a full on like rental company, you could just have a couple pieces that are trendy, like the arches, like you're saying like the right ones, and rent it for 100 bucks a pop, Chop it off, pick it up sort of thing. You know we talked about like the portable bathrooms.

You seen the beer burrow? The beer donkeys?

Yeah, the beer donkeys. Yeah, those are sweet.

Yeah.

More and more like coffee trucks or coffee carts are like becoming a thing at weddings. Food trucks started becoming really popular as like late night snack and then they turned into like people are just using them as like their full on caterer. There's like a million things like that. There's all like the different kind of like photo booths or like the 360 spins are like, you know, all these things, you know, that you'll see like even like wedding planners like adding as like another service onto their business or like a rental that they could do or the DJs add on like all the tech stuff too that they can rent out or just like wedding decor rental places, that the opportunities are pretty much endless. And you know, I think obviously like home service businesses are super, super popular on Twitter or just like service business in general because you can like start for low startup costs just like doing the work yourself. It's essentially like the same becoming like any sort of like wedding vendor, whether there's maybe a little bit more like skill to it. Like to be a photographer you have to be good, but like all you really need is a camera. And then it's just like you taking the pictures, editing it yourself, you know, Videography. Yeah, the rentals, you know, the labor going there and you know, taking in there and set it up. And you could start with like one piece and then add to your collection from there. So there's lots of different things.

Have you ever had like a conversation with a vendor that just opened your eyes to how busy they were? Like have you ever seen any supply and demand imbalances in the space that people could capitalize on?

Yeah, like the main like caterers, things. Like it is like crazy to think, you know, like we are a venue and we're pretty popular and we'll do like 70 to 80 weddings a year and Then to think of some of these vendors doing four weddings a night. I know of a party bus company near us that has, like, they started literally like a year and a half ago, and they have like 30 buses now, and they'll do like 30 events a night like that. Like, what?

And weddings are just like a piece of that business.

Yeah, yeah. So then you, you then you get into, like, just the whole events kind of space. And honestly, that's a lot of the vendors, too, are like, we're pretty tied to, like, straight weddings because that's going to be like the biggest bang for a buck. And usually, like, if you're in the event space too, like, weddings are going to be like your big money maker. But, like, you know, depending on what you're doing, there's. There's no saying you can't do a wedding. Plus you're renting out stuff for a different sort of event that night or corporate, whatever it is. So anything that you're not tied to just like one location and you could be doing like, multiple events all at one night. There's a lot of logistics to figure that out, and it can be kind of chaos. But, like, there's no saying, you know, you can't do 10 weddings in one night, like, there. All the venues around us, you know, are pretty much booked every Friday, Saturday. So if you have some sort of service where you can be at multiple of those venues at once, you can grow beyond, like, what we ever could. We're pretty limited with only so many dates and only space for so many things.

But, yeah, I'm just. This idea is coming ahead as you're talking where. Remember we had that tweet about the. The candlelight concerts, right? You hosted one of those. And then I posted on Instagram about a month ago about Bingo Loco. Have you heard of that?

I saw you. I saw your post on that too.

Yeah, it was. It's just like expensive bingo for millennials with alcohol and food and. Do you think there's a world where someone could have a venue like yours and it's like wedding first, but it's really. It's just a place for millennials to go, spend too much money to do, to experience things like candlelight concerts and Bingo Loco. And really, you could, in house all of them. Right? Like, it could just be one company. You're not outsourcing it to the candlelight concerts of the world. You're just copying them and having your own, like, Friday and Saturday night events.

Yeah, yeah, I. I'm in Iowa. And then like, we've thought about this too, and we've done some of our own events, and they go okay. But I always felt like if you're in a bigger market, like, you could crush, like, your own events and, like, make more than. And less work than a wedding would be, too. Right? Like, we have, like, someone doing, like, a murder mystery at our. At our space, and then they're just, like, renting it from us for it. Same thing with, like, the candlelight. And then they're selling tickets for it, and, you know, 200 tickets at 60 bucks a pop. Plus, you know, if they had the venue and got to make, like, the alcohol, we'll make the alcohol sales on that. But, you know, you can do 15, 20, 30 grand revenue on off one event without, like, that many. You know, you don't need, like, a stadium full of people necessarily. You just got to, like, find, like, niche, like, events like the candlelights or the murder, like, things that are going to sell. I think the challenge would be constantly coming up with the new concepts that are going to keep people excited. But the candlelight concerts are still happening in our space. They just had one on, like, the 28th, like, on a Monday night. So, like. But they basically like Halloween and do it themed, and they're, like, still selling pretty well. And they do, like, two events a night, like, two different concerts. Wow.

Wow. You hosted them again, you said?

Yeah. So they pretty much just pay us to, like, rent the space, so we don't have, like, much involvement with, like, the actual, like, operating of the event sort of thing. But, yeah, I mean, their model's pretty crazy, right? Like, they're just, like, finding these contract workers. They're like. They just, like, bought and delivered the candles to our space.

Fake candles.

Fake candles. They pay us, like, 150. Maybe I shouldn't go too deep in. Too deep into this. No, no, I did. On that tweet that went viral, I did have one, like, the main person I was working with, like, reach out and said, the CEO saw our tweet there, and they're, like, wondering if we're trying to, like, sabotage them. It's like, no. Just, like, no.

Chris is. Chris's just doesn't care.

But, yeah, like, it's not rocket science, right? And, like, you can, in theory, just copy and paste. I don't think, like, they. They've done a great job and they're big enough to, like, where they shouldn't worry about, like, people copying them. I think that's just the nature of the business world, right? But in theory, you could do that. That would be like our plan B. Right. Like, if weddings stop booking, we do still have the space. We can hold hundreds of events a year. And if you can build a team that's good at hosting events, then there's lots of things you can do.

Yeah. It's funny, you know that meme of Don Draper from Mad Men where he's, like, pitching something with a board next to him.

Yeah.

It's like the candlelight concerts. When they launched, it was like concerts, but with candles. Everyone's like, you're an idiot. And it's like, no, they do. They do really well. Or it's like bingo, but with strobe lights.

What?

Well, they have 400 events a year, you know, 30 grand a night.

Yeah.

It's just. Oh, it's just crazy how you can just put a little tweak on something and just print money.

Literally both of those. They just added lights.

Yeah. Seriously.

I guess take common events and add cool lights to it and you should be good.

But it is a good point with, like, the. The location, because I think the more rural you are, the more you have to be dependent on a wedding venue, which isn't a bad thing. You guys are doing great. You're crushing it. And you also don't have as expensive of a location as someone in the DFW suburbs might have. If you are closer to more population, then you can get a lot more creative with other events. How much do you have to rely on alcohol sales for your business? Either top line or bottom line?

Top line. You're talking, like, 40% of our revenue at this point. So. Yeah, without it, we probably wouldn't be profitable. I mean, we had to, like, switch up our whole, like, model. Like, we'd probably, like, be staffing less. Right. And like, basically turn into. There's a lot of venues where, like, you might rent the space, get the tables and chairs. They might just unlock the door for you the morning of, and then they're gone. Right. Like, you clean up, you do everything yourself. You'd probably have to be like, in that model, if you're just doing, like, straight, like, rental fees with no alcohol sales or no. No added services or anything like that, which isn't a bad thing. Probably a lot less stress. Honestly, that would turn it more into that, like, real estate play side of things versus being like a full on, like, operating business. But, you know, if you want to make more money, you got to do more work, essentially.

Yeah, that's a trade off.

Yeah.

And you could probably just have referral partners, right? Like, yeah, we don't do the alcohol, but these guys do. And they give you kickbacks.

Yeah, yeah. And depending like where you are and like, there's, there's a lot of, you know, states where it's hard to get a liquor license. Like, I was not one of them. I think we pay like 900 bucks a year, so super cheap and might as well. But you know, a lot of places I think, like California, it's like crazy and like they only have like so many licenses they hand out per year and people bid on them and crazy things like that. But a lot of the times I think in certain states, like the caterers will have to have like a liquor license and then basically you just. Yeah, like some sort of referral fee or partner with one or two caterers and then, you know, you get 10, 20% at their top line that they bring in and you just guarantee them like all the events at your space. So there's definitely ways around it and things like that.

So go back in time. What would you have done differently about either the building or the business? Knowing what you know now there, I.

Mean, there's like things about like the building itself for like design wise or things like that that we would do differently. Like we have like all drywall in the, in the grand hall and it just like gets beat to crap basically every year. So there's like little things like that that drive us nuts. I would probably try to think of a model where we could staff probably less somehow some way, just like by not promising so much or certain things that then essentially just takes like a little bit more of the pressure off of us. It's definitely like a high pressure day. Right. And the more you promise or say you're going to do for the couples and the families, like the more they expect and you know, the day has to be perfect. There's no, there's no going back on someone's wedding. So we make plenty of mistakes and we try to learn from them, but usually what ends up happening is like we have to offer them money back, you know, like this is their wedding, you know, and they're very upset, like they'll never get to stay back. And like the only way you can even attempt to make up for it is like give them sizable amounts, you know, $500,000 back, unfortunately.

So what percentage of the time would you say you've had to do that?

They sting, right? It hurts and it feels like it's like all the time. But I would say, like, probably only like 1 to 3% of the weddings, you know. Oh, wow, it does happen.

That's pretty good. I'm sure. Those conversations are so stressful.

Very stressful. You know, every time we get one of those messages, it's just like, yeah, it's a day ruiner. I'm not gonna lie. But that is. That is the world we're in. So.

Well, dude, that's the thing about business is, you know, I've done so many different businesses and there's nothing else in this world where you're like, you're one text message away from a ruined year or a ruined life, or one phone call or one email. And it could come at any moment, at any time, and it just always looms, it always lingers. And when you work a 9 to 5, like, yeah, you could get fired at any point, but really, that's the worst thing that could happen. But when you're a business owner, oh, man, it gets a lot worse than being fired.

Yeah, it sure does. And you can't turn it off at all. No.

Are you seeing anything else in the industry that's interesting that people might be able to get some benefit from or take advantage of?

You know, I think if you look at the industry as a whole, it's, you know, the reason, like, my kind of, like, venue exists is like, people used to get married in the church, and then they'd probably go find a hotel ballroom or some sort of, like, event space to do their reception at. But, like, slowly, as people, like, less and less people get married at their church. You know, they want to get married on site and they. They do. They want it all in one location.

Right?

Like, they want to get married, have their cocktail hour, and have all this stuff, like, all in one, all in one place. So then I feel like that's when like, these standalone, like, barn venues started popping up and it's like, come have it here instead. And then they just got more and more complex of, like, someone added a bridal suite. And now all the venues pretty much have to have a bridal suite. Otherwise, like, you're missing, like, a huge part of, like, the day of getting ready and taking pictures while you're getting ready. And then someone at. Then you gotta, like, match it with the groom suite. And now you need a spot for cocktail hour. Now you need a plan B spot for the ceremony. Since most people want to get married outside, like, all these things. So I feel like the buildings, like, keep getting more and more complex. And that definitely has left, like, the hotels, I feel like I wish I could like find a stat on like how much like they're losing out on like wedding revenue because I would imagine it'd be a lot. It still kind of blows me in some of the bigger cities. Like it still is mostly like hotels that are dominating the wedding space. And I think it's just too expensive to build these type of venues, you know, super close to downtown areas, which makes sense. But I think what could happen is kind of like what we're talking about, like going more towards even more like destinationy spots or micro resorts kind of thing. And like that like those kind of properties really getting into the wedding game just makes it that much more like Instagram worthy and like unique and kind of like going that way. But on the flip side I will say like not everyone wants to have like their friends and family travel like super far. Right? Like that's, that's like our business is like most people are like right here in Iowa, like within like the 45 minute radius and like they have their, all their family from their whole lives like here. Like they're not going to make them pay, you know, three grand to go, you know, to their wedding at some destination property. But I think that will continue to trend and like micro weddings and things like that will still continue to grow and more unique properties. So whether that's people turning their houses into a cool venue or some sort of like smaller property where they don't have to spend 3 million bucks to build, it will happen. But I think there's, there's a world where both exist.

Is there an advantage or a premium you could charge for a venue where the wedding party or at least the couple could sleep there on site as well?

Yes, definitely. I guess that maybe that's kind of what I'm picturing with like the, the, the like the micro resort, you know, so maybe it's like your venue plus like 10 cabins sort of property, you know, that, that's like a step above like my venue. And I wish I could. My, my county actually won't let me do short term rentals next to us, otherwise I would definitely be doing that because then there's just so many more things that you can do. If they're staying on, the friends and family are staying on the property, then they probably need a space for like their rehearsal dinner the night before. So now you can cash in on that and do that, you know, and maybe they'll stay through Sunday and then you have two wedding. There's a lot more like Generate or generate a lot more revenue you could generate doing that because as I mentioned, you are kind of limited with the amount of dates that you have. And that's probably the biggest downfall I would say is like, you know, we can't go from pushing 1 million in revenue to like 5 million all of a sudden. Or we can't really scale without building like another building basically, which costs a lot of money.

Yeah. So if you were me with, with my house, we've got five bedrooms and then each bedroom has its own full bath plus a half bath. So five and a half baths, five bedrooms. And then we have space upstairs for a six bedroom and like bonus room and game room that we could build out. It's already framed and everything. If you had six bedrooms to work with, six full baths, how would you convert that to be a wedding venue? Would you take a couple of the bedrooms and make it like a groom suite and a bridal suite and then leave 4 as like actual bedrooms for people to stay or what would that look like in your opinion?

Yeah, probably that. I think like the bridal suite and the groom suite would be like the missing piece in like just going to like someone's house. So giving them like a designated area. Or maybe you build, you know, a shed out back that can be like the groom suite sort of thing and do that and then. But then maybe not trying to get rid of like the sleeping or the beds, you know, maybe it's a groom suite, but there's still like spots where they can sleep within there. I don't know how big the bedrooms are, you know, but having that. And then I think like the biggest piece would be like, where is the ceremony happening? Where's the reception happening? You know, so some sort of gazebo or pavilion outside for the ceremony that you can put like nice landscaping around. And then if you have to like get a permanent tent or tent rentals or something for the, for the reception outside, I would go that route.

Okay, that's kind of what we're thinking, so. Well, Alex, this is great. I appreciate your time. I love this space. I think it's, it's a lot like the short term rental space in that, like it's very Instagram able, it's sexy, People fall in love with it, it's romantic. In actuality, it's very stressful, it's very hard. But in actuality the margins are actually really good. What would you counsel someone to do if they were wanting to dip their toes into this? Either to buy a venue or to build A venue?

Yeah. So I've looked at buying a lot of other venues too. That's tough right now just because the values are all over the place. I don't think people know how to value them. You know, they put some sort of like real estate value and then a lot of these venues have 10 acres, 20 acres and then they're like adding that onto it and then maybe like some sort of like business value on top of that. But it's like, you know, if the business can't generate enough to pay for this five million dollar building, like doesn't make sense sort of thing. But so I'd say like buying is tough. A lot of unrealistic sellers, not I can't, you can't find one. But you know, just make sure it makes sense and you know, if you wanted to start one, definitely, you know, zone in on like where you want to, you know, do some market research, which is essentially just looking up, you know, all the venues in your area. You know, a lot of them have their calendars on their website. Reach out to all of them, act like you're getting married and get their pricing.

How booked out are they?

Yeah, like how booked out are they? You know, are they booking Friday, Saturdays, are they only booking Saturdays? You know, are they booking Sundays even to, you know, what is their style? Is there like a ton of barn venue still and there's a need for something different, you know, like how are you going to be different versus just like throwing up another building and thinking you're going to charge, you know, 20 grand a night for it. I'd be careful on like how many weddings you underwrite on that front, you know, have, have some sort of plan B, you know, worst case scenarios, break evens, that sort of thing. But there's definitely in a lot of markets, more room for more venues and I think, you know, as there might have been like a little bit of boom of building between like 20, 20.

21, when interest rates were cheap.

But I think a lot of them, I think like two more were supposed to go up around us, but they never ended up getting built, mostly just the environment. So I think there will be, that's good an opportunity here soon to, to get a couple more in a lot of markets. I'm also happy to help anyone I've consulted a lot at this point, especially getting started in the building phase and dealing with zoning and things like that. So DM me on Twitter, there's not.

A lot of businesses where, where the market research is so binary and straightforward. You know, you just get em on the phone. How booked are you? Okay. And that's the question they get every day. So they're not suspicious by being asked that, right?

Yeah.

And then you can say, all right.

Acting like you're getting. Yeah, you know, like.

And you see how much they charge. And you can. Oh, you do this much in revenue. Interesting. Everyone's full within 30 minutes. Okay. Yeah, there's room for me here. And back to what you were saying about Twitter. So where can people find you?

Yep. Twitter mostly. So wedding venue guy on Twitter, DM me on there and we can hop on a call, chat.

Okay. Alex, this is great. Thank you for your time.

Awesome. Thanks, Chris. Appreciate it.

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