5 tips on how to create an event budget
A sound and carefully planned event budget means the difference between running a successful, stress-free event and one marred by pay-outs for broken equipment and extra payments that may come up after the event.
It is by no means an easy thing to do, especially for those planning one for the first time, but its importance cannot be stressed enough. A structured budget helps in monitoring costs, understanding how much you can spend, reporting to management and most of all keeping things all under control. Below are some steps that can help guide you towards budgeting your event successfully.
This is one of the first things that should be done before you even start looking for a venue or theme for your event. Planning is key as it forces you to think about every aspect of the event, including the build-up and break-down days, which are too often overlooked and forgotten about until the last few days.
As part of this exercise, you should consider three scenarios and build your plan around them: The first one, which is your ideal scenario, where everything goes perfectly according to plan, such as 100% delegate attendance, and full sponsorship. Then, plan for a realistic scenario, where you think you will actually end up. And finally, a worst-case scenario, where everything that could go wrong is covered.
2. Work out your break-even point
Figure out the level of revenue (for paid events) or funds needed to cover all your costs to make the event viable. What sort of money are you playing with? What is the aim of the event? Some events actually make a loss, as their aim is to raise brand awareness, and the R.O.I. actually comes in sales later on.
3. Identify and categorise all areas of expenditure and revenue
Expenditures normally include: Research, marketing and PR, delegate expenses (such as goodie bags, marketing material, and badges), Venue (hire costs, décor, set-up, break-down, catering, AV equipment, and entertainment), exhibition costs, travel, accommodation, speakers and hospitality, insurance, and staff.
Revenue streams normally include: Delegates (ticketing and donations, and event purchases such as food and drink), sponsorship, advertising, and exhibition revenue.
4. Have a contingency budget
As most eventprofs know, events very rarely go without throwing something unexpected at the events team, who in turn has to be prepared to deal with it quickly and without any major repercussions. A lot of the times, money gets them out of jail, whether it is to pay for broken equipment and damages to the venue, or medical costs.
It is therefore, always good practice to allow an extra 10% to 15% of the total budget for contingency funding.
5. Embrace technology
Find and download some helpful apps. They can be very helpful with keeping track of your plans and budget, especially if you are always on the go.
We have put together a few suggestions, but there are so many apps and programmes out there, with very similar features and uses, that it ultimately comes down to you trying and testing some out before making your final decision.
Account Tracker – This is a great overall app, as it covers expense management, account tracking, multi-currency feature, bill reminders, and exports reports and budgets to CSV and PDF files.
Money Owl – This app also has budget management capabilities, and graphs that monitor spending. It includes a feature to add photos and videos to your expenses to help you visualise it.
Event Budget App – This one is quite similar to Account Tracker, and it also compares real expenses to your estimated budget, it exports reports and it allows you share your budget via e-mail with your team and management.
Budget management is essential for successful event management. It helps you think and plan ahead, re-think and adjust your plans but also be prepared for any unforeseen mishaps and any changes in the landscape throughout the planning and execution of your event. It most importantly stops you spending money unnecessarily.
To make the most out of this exercise, event professionals very often devise various plans during the build up to the event (12 week, 6 week, and 1 week) and then a flash-plan, for on the day. This allows them to make adjustments as the money is spent, and creates realistic expectations for management.
All in all, It is actually not too different to making a budget for your weekly food shop or monthly bills at home – be realistic, have a plan, recognise the critical elements that will help you measure your spending, keep you on track and review.