Budgets are not necessarily fun and exciting, but they are necessary. It would be great to spend to your heart’s desire. However, the perfect event is possible with a reasonable budget and a plan. Here you can learn how to create a budget for your next event from an expert in the field. With this easy-to-follow guide, you’ll have everything you need to plan out a successful budget!
WHAT IS A BUDGET?
Budgets are meant to foresee future event circumstances and ensure an event stays within the financial confines put forth. This encompasses both forecasted spending and revenue from the event, put into specific categories to better keep track of each item.
Though tedious, creating an event budget is imperative to a smooth event. Not only does it keep your spending under control, but it also allows you to understand the feasibility of your event with revenue calculations based upon items like attendance and capacity.
A budget also creates a paper trail, so if you need to attest to where all the money is going, it is readily available. Then, of course, it allows you to analyze your ROI and make future changes based upon that information.
BEFORE YOU CREATE A BUDGET
First, how much do you have to spend and what kind of event is it? It seems straightforward but writing out your event’s purpose can help you steer the budget in the right direction.
Different factors go into the budget for an event. Some of these factors are company size, event goal, event scope, size of the event, and location. The important thing to remember is that you don’t begin planning an event without landing on a budget.
Once you have these items on paper, it is time to do some research. A huge help is looking at past events. Looking at items that cost more than originally intended, whether its brochure costs or catering, you can be aware and ready to adjust. Looking over these items also allows you to make changes with venues and vendors before you invest in their services. If you can’t research past events, try to investigate each industry that might be questionable. You can look at industry averages and get an idea of what prices are right for you.
Then finally you can jot down where your high-level spending will be, to start your budget. These are the things that will require a large portion of your budget and are usually more expensive than your itemized needs. Some of these items could include the following:
· Food and Beverage
· Event technology
· Furniture and equipment
According to the Professional Convention Management Association (PCMA) survey, you will most likely be spending 55% of your budget on food and beverage, audiovisual, and speaker/entertainment, because these items have a direct impact on the overall attendee experience.
It’s also crucial to differentiate between fixed and variable expenses or costs. Fixed costs are costs that do not change based on the number of attendees. Variable costs are costs that change based on the number of attendees. These costs are calculated on a per-person basis (eventmobi). This is especially true once you start itemizing each category. This is when you can begin to add a final expense column along with your projected expense column.
As you know events can be unpredictable, so something that could help save your budget is a contingency budget or emergency fund. This is usually 20% of your budget, put aside for those capricious moments. This fund can keep your budget in the green and help you avoid the dreaded red.
CHECK YOUR BUDGET
Once you have your budget set, ensure you don’t forget about it. It’s ideal to have weekly meetings about what has been spent as well as any changes that need to be made. Budgeting doesn’t stop at creating the budget. It involves tracking expenses, redistributing money based on unexpected costs that emerge throughout the planning process (cvent).
It is important to be flexible because as mentioned before, things can certainly change throughout the planning and execution process, and it all needs to be tracked. You will be happy you did so when you need to look back on your current event for information. This also keeps key stakeholders and staff aware of budgetary limitations and changes.
Budgets are so important when it comes to creating a successful event. Not only does it keep everyone informed of limitations and changes, but it also helps to make planning less stressful. It may seem overwhelming, but once you jump into it, you’ll find that a budget is necessary and aids in productivity.
If you need assistance with planning and executing a budget, contact me for a free consultation. Shana Bryant Consulting will help flawlessly plan and execute your event.