Money is a key factor in an event’s success, whether it’s a conference, meeting, or product launch: the capital at your disposal will determine many of the decisions to be carried out. On that note, one of the keys to reaching the top in this sector is an agency’s ability to stay within the client’s budget.
Why do you need to draw up a budget for your event?
Once the goals and targets of the event have been set, we have to ask ourselves what routes we’re going to take to reach them. That is, we have to arrive at a quantification of previously established needs; in a word, the budget. Balancing the budget is one of the main challenges we planners have to face.
Drawing up the budget for your event is crucial so that you can always have a list of essential expenses on hand, as well as extra details which may or may not be. The more we stick to the budget throughout the whole process, the fewer surprises and upsets we’ll run into.
How to budget for an event
It is wise to let the client know that, throughout the process, event budgets are working drafts that will probably undergo changes as further details take shape or unexpected things crop up. You won’t be able to foresee all your expenses from the start, but it’s convenient to plan your budget based on the most common expenses and income. When it comes time to draw up the budget for your event there are two scenarios:
- Budget adapts to the event:
This is usually the case when organizing courses, congresses, meetings, or conferences. These types of events require excellent staging and presentation.
- Event adapts to the budget:
This option is generally for smaller events, such as launches, presentations, or incentives, where the team has a given maximum amount of money to work with and must contract accordingly.
All event organizing has some standard expenses we can count on having to cover. Some of these essentials include food and drink, audiovisual personnel and equipment, venue rental, and investment in a marketing and promotional strategy.
Keep in mind that the event should revolve around the guest’s experience, so investments should be aimed at adding value to the occasion: don’t skimp on those elements that will have a direct impact on the overall experience, such as interesting lectures or other entertainment aspects.
Fixed and variable costs
It’s fundamental to be aware of what our expenses consist of and what our sources of income are to cover them. In your event budget you will also distinguish between fixed and variable costs.
- Fixed costs
Fixed costs refer to those expenses that don’t depend on the number of attendees at the event. In this category are venue rental, secretarial and pre-event costs, dissemination and promotion, signs and signalization of the event, transportation and lodging costs as the case may be, and the registration and accreditation system, among others.
- Variable costs
In contrast, variable costs are those that are determined by headcount. Among these you’ll have to budget for luncheons or dinners, coffee break and catering service, temporary personnel for the days of the event, and security and cleaning staff.
Analyze your event’s performance
Once the event is over, it’s time for the last step: close out the cycle and calculate total expense and income generated. The importance of this last point resides in the fact that it’s not only necessary to draw up accounts to present them to the client, but also for your own benefit as you can learn from your experiences and progress in your financial labors for the next event.
Return on investment (ROI) is a performance indicator used to evaluate profitability of a given action through an extremely simple calculation: a percentage that will reveal your event’s yield in relation to the costs it entailed. If you want to know how to measure ROI for your events, take a look at our article Why and how to calculate your events’ ROI.
If you don’t know where to start or prefer to build on a template, there are many available as free downloads on the Internet, just look for one that’s most suited to your needs.