One of the fundamental items when organizing an event is the event budget.
The event professional in charge must make sure that the financial management is well defined and meeting all the business needs and expectations. To help you build an event budget, step-by-step, in a practical and efficient way, this guide to event budgeting will highlight the critical criteria for you to succeed. Let's go through exactly what you need for your ultimate event to take off the ground with ease.
How to plan an event budget you can actually keep track of
To start planning a proper budget, you’ll have to go through some definitions beforehand, as costs depend on some factors of your event such as size, duration, virtual/in-person, public, and more.
Organization and methodology
Each occasion has different types of expenses and need to be organized financially from scratch. Therefore, it is essential to always keep an eye on essentials, such as supplier prices and space rental.
Online tools are strongly recommended if you want to avoid the hustle of loose spreadsheets that end up disconnecting from each other. Plus, successful budget management can be replicated and used in bulk to repeat success.
Once you have a good idea of what the event should contain, the ideal scenario is to get in touch with several vendors for each specific need. If you do not have a request for proposal model, it's a good time to work on one.
Once you have received answers, place the applicant vendors according to their categories and inform their prices, payment methods and due dates of their offering. Consult at least three pricing options before contracting and enjoy some advantages of negotiation. Also, it's common to receive discounts for products you need to buy in bulk.
Many services offer discounts for payments in advance. Thus, make adjustments in the budget according to the priorities of the event. Always prioritize investments that are likely to bring more return.
Monitor and control
Update and monitor all stages mentioned above. That’s the moment you start to realize if your budget has been properly planned or if it will get out control. Include unforeseen fees too, as those will be crucial to optimize the financial planning on your whole portfolio. Thus, you’ll gain confidence to work while having a better prediction of expenses.
What does an event budget look like?
An event's budget will determine the scale and whether the event can actually occur under pricing constraints. First, because it’s only after this analysis that it will be possible to know if the event can happen or not. Second, because this will be an initial map that the event planner will need to consult every now and then, redirect their efforts when necessary. All of that will have an immense impact on solving the specific challenges of a given event and, consequently, its performance.
4 reasons a budget is crucial in planning your event
As creatives, event planners want to have enough money in the account to launch their magnificent ideas and make dreams come true for every attendee. But not every event has this kind of financial freedom. Without a consistent plan, finances can end up getting lost among so many accounts payable, unpredicted debts, and unnecessary expenses.
And without proper monitoring and control, that fantastic idea you had in your mind full of technology, colors, gifts, attractions and famous speakers will have to continue their existence only in your imagination. Don't let disorganization and lack of financial knowledge make your career stuck.
Having a good knowledge of financial planning is one of the first skills towards the success of your event. With a good financial plan, you’ll feel less stress throughout the event planning and execution processes. Additionally, it’ll bring the professional recognition you might be looking for.
Don't have the patience to plan a budget? Think that it’s wasted time and nothing will change?
Below are four reasons that will show you the many good things that financial planning can provide for your event. After all, no event prof wants to be seen as an amateur when they have a golden opportunity ahead, isn’t it?
If all the inputs are registered throughout the process and carefully analyzed, you will know how to identify the bottlenecks in your events and what strategies can be used to overcome them.
An example of savings that usually comes from this analysis is a renegotiation with vendors. Let’s say you just tried a new audiovisual company and they made a good job. Offer a medium to long term contract in exchange of a significant discount. If it is viable, this kind of business partnership relationships are advantageous and can always improve.
You’ll be able to track the cash flow of an event. After all, an event is a project, and a project is a business in itself. And businesses need to know where their money is going.
2. More control
Event profs who do not carry out financial control cannot count on accurate information about their finances. This creates a great risk, since brands, sponsors, attendees and every stakeholder involved will have their images associated with this low planning quality.
The event pro must be present in the financial decisions of the event. However, this does not mean that only your eyes have the potential to bring good results: carry on your finances and count on other analyses with the help of accountants and lawyers, when possible. Monitoring the business and using specialized help can give you realistic information to foresee success.
3. Bargaining power
When income and expenses are recorded, it becomes possible to analyze where the money is going and make more effective decisions to reduce costs.
What do you do when you have a limited amount of money left, but you still need to make a big decision for your event? For example, let’s say you’re launching a new product. Will you hire a famous speaker and do this launch virtually, or rent a fancy venue to impress VIP’s and hire a less well known person to host the keynote session?
Ideally, every decision-making process is based on efficient analysis. After all, there are big risks in making choices based only on your gut. Being creative and having an entrepreneurial spirit is great, but it also needs to be balanced with reality.
Event pros who plan to control their finances can make decisions under less stress, as they keep their previous decisions benchmarked, as well as the respective outcomes.
This makes a difference in the most diverse aspects of event planning. Whether looking for new suppliers or increasing orders with current ones, modifying staffing strategies, increasing investments in a critical process, and reducing costs, among others.
Proving results objectively is a true nightmare for some event pros. As if dealing with numbers was not enough during the planning and management phases, they also have to explain these numbers for their clients.
In fact, it’s not always simple to organize reports, make the accounting balance, declare taxes, coordinate staff payments, and issue invoices. If this is a job that you find difficult, you definitely need someone who is not only good with numbers, but also bureaucracy.
As mentioned above, if you’re planning a large-scale event, don’t start anything without counting with accounting and advocacy services before. Also, to have these reports ready for any stakeholder involved in the event or to yourself, centralizing this information in a reliable platform, connected to every other aspect of your event, is of the utmost importance.
What’s up to you, as the event specialist, is to have a business acumen able to make these activities more practical, organizing information on a daily basis. Thus, there won’t be the need to chase after important numbers at the last minute.
Who's responsible for creating the event budget?
An event budget will not necessarily be under the responsibility of one single person. It will rather be a group of people, depending on the event’s size. Still, someone needs to be in charge of that group and the whole financial aspect of the event.
Event planners vs. event managers
To make a long story short: while a planner plans, the manager manages. It’s that simple. It’s not uncommon to see the same person occupying both roles, but it’s not exactly a best practice.
The event planner delves into the company's purposes so that the event and organization are aligned on a common goal. It’s a more strategic role, as most of the planning process involves analysis such as market analysis and consumer insights. They create strategies to achieve goals. In addition, they orchestrate all involved stakeholders in order to create a very strong voice for the organization's branding.
Also, they pitch partnerships when they see strategic opportunities. It’s their responsibility to create ways to reach the final public, defining which form of communication is most efficient for each type of audience and channel involved.
The event manager figure comes in a second moment. Whether this event manager is the one creating a tactical plan or following one that has been previously established by the planners, this person is responsible for the execution of the event.
At this point, the event budget is already allocated and this event manager will have the mission to keep it under control.
Ideally, an event manager should participate in all stages of a given event, since the very first brainstorm. However, it’s not uncommon to see event managers and producers being involved only after the planning stage has been concluded.
In-house or third-party planning?
In-house or third-party planning is a very normal question in startups and corporations marketing teams.
Internal hiring is when your company makes a selection of candidates and chooses the best talent to be part of your current team. So you sign your work permit for a salary, and you meet a certain workload. Third-party planning means you’ll rely on an agency to carry on with your event marketing.
Here are some of the highs and lows of how this decision affects an event budget:
Elements of your event budget
Corporate events involve a variety of costs that need to be considered by the organizers at the planning stage. Whether you are requesting resources or already have the budget set for organizing a given event for your client, it is important to understand the limitations and costs you should explore even if the planning is still on its initial phase.
The main element to define the size of your event is the number of participants expected. Happy hours or board meetings, for example, tend to be small due to the small audience. Congresses and business fairs, on the other hand, demand wide public participation, which makes them large productions.
What does your business intend to achieve through this event? To launch a product? To obtain awareness and increase the base of fans? Or to compensate and retain the most loyal customers?
These are the most fundamental questions you’ll need to sort out when you start planning your corporate event. To start from the beginning and make sure you won’t miss any point, ask yourself the 5 Ws and the 2 Hs:
- 5 Ws: What, Who, Why, Where, and When
- 2 Hs: How? How much?
A simple way to spreadsheet your event budget
You can start spreadsheeting your budget after or before request vendors’ quotations. Take into account the following costs when planning for your budget:
- Ticketing, registration, and accreditation: procedures, tech and software, staff, and an information center
- Communications, marketing, and advertising: brand identity, communication channels, promotional campaigns, PR, and signaling
- Specialized vendors and suppliers: venue, food and beverage, entertainment, audio-visual, WiFi, cleaning, security, furniture rentals, decor, speakers, electricity
- Material rental: headphones, tablets, restrooms, translation, photography, transportation
- Team costs: event manager or coordinator, admin, finance, reception, training
A crisis can affect not only the event itself, but a whole business. And if this crisis is caused by an internal problem, how will you solve and communicate to stakeholders the actions underway to mitigate the risks to the brand's reputation? There’s no such thing as a magic formula to extinguish a crisis. But there are best practices to detect and anticipate actions to save a brand’s reputation.
Dealing with an event might not be as glamorous as planning or strategy. Still, it’s a key aspect of success. Without proper management of the budget, executing any plan or strategy can get quite difficult.
Now that you know how to set up a perfect event budget, focus on real and executable strategy. Applying each of these steps we just went through you’ll have a detailed event budget to control expenses and increase the possibilities of positive ROI.
Dedicating time to budget planning will avoid problems in every stage of your project, positioning you as a complete event professional who is not only creative, but also has business vision.
Budgeting doesn’t have to be as difficult as everyone makes it out to be. Learn the top budgeting tips to secure your financial future and make sure you understand how to budget for events and everything else in between!