Are You Losing Sleep Over Your Event Budget?
When we say a well-organized and goal-oriented budget can make or break your event, we all know we are not exaggerating.
Kickstarting event–planning with a budget eases decision-making at every step. However, laying that very foundation at the outset can be tricky as there often is a constant dilemma due to different variables like
Choosing a great venue to impress attendees or inviting well-known keynote speakers
Sourcing from a good local caterer or bringing in a celebrated chef from outside the region (an idea wrapped up in the planner diary for years!)
Investing in a fancy hotel or spending handsomely on marketing
Such options are just the tip of the iceberg which continues to haunt event planners through multiple event phases. Also, the resurrection of in-person events has been surprisingly quick and so have budget escalations. As the cascading effect of pandemic-induced slowdown and current global inflation trickles down to invisible costs, event professionals are restless and overwhelmed more than ever.
Why Is It Crucial to Create an Event Budget? Before we start on how to create an effective event budget, let’s focus on the WHYs behind it 1. To determine costs for staffing, accommodation, caterers, entertainment, signages, and every event expense cluster. 2. To mitigate bottlenecks by identifying probable contingencies that may arise in due course and planning reasonable fund allocation. 3. To be able to bargain with vendors well in advance to increase the odds of bagging maximum discounts and strategize long-term commitments with them. 4. To report and convince stakeholders about event budget approvals and prevent last-minute sanction requests. 5. To develop the right marketing plan which becomes easier when the budget figures are available. It allows room for prioritizing marketing collaterals from the very beginning. 6. To attract sponsors who are more likely to trust and agree when the event strategy and takeaways align with their dollar and cents reports.
Moving further, now the spotlight question for event planners is how to create an event budget that is easy to
Implement
Follow
Track
Improvise
A Complete Guide to Creating an Event Budget Glaring Excel sheets, chattering keyboards, and event planners rummaging cluelessly through event data after locking an event with a client is a usual vista.
Honestly, there is no rule book or step-by-step event budgeting guide that can walk you through the process. The concepts of budgeting are pretty much relative to event dimensions that differ for every event organizer. However, understanding the basics of event budgeting can help planners organize profitable and impactful events.
To begin with budgeting, as a first step, you need some well-researched data Past Event Stats — Analyze which activities missed the budget, which process surprised by being cost-effective, and which activities did not garner attendee attention. Current Trends — Explore, explore and explore. New venues, hospitality, trending topics, and event technologies. Contacting Vendors — Even if it is the first time and there are no figures to start with, use industry samples or directly ask vendors to create your base data.
The hardest part of event budgeting is to understand where to start.
Having reasonable baseline numbers is imperative to draw a realistic budget. Say, one chooses to use energy cost estimates from 2020 to create budgets for 2023. While the energy costs have skyrocketed in the interim, won’t it blow up the budget even before it starts?
To create a tractable event budget, it crucial to cover the following primary pointers 1. Event Goals and Strategy — A robust and holistic strategy that encompasses all event goals is the foremost requirement to start on the right track with budgeting. Unless the goal, let’s say brand awareness or generating leads, is not locked even a million-dollar budget cannot help in making the event successful and measuring specific outcomes. Also, defined objectives are pre-requisite for purpose-driven allocation of budgets for different expense categories.
2. Variable Event Costs — Event planners have some obvious arrangements to make, like the spread of food and beverages, hospitality, transportation, and accommodation. Incorporating sustainability elements in all cost-centers, which is also now the foremost focus across the event industry, also helps. Also, there are costs that are not essential to an event but can play a key role in elevating attendee experience. Given their changeable attribute, the chances of curbing expenses in these categories can go higher with negotiations, pre-bookings, and proper research.
Food & Beverage Costs — Managing costs from a food footprint perspective is not only a ground-breaking move towards sustainability but also puts a break on unnecessary experiments on cuisines, food wastage due to low attendance, and over-sourcing from a remote location. The US Department of Agriculture reports that the food price index increased 11.2 % in 2022, with the expectation of climbing another 3–4% in 2023.
Staffing — Labor shortages triggered by the pandemic, along with the great resignation and recession have spiked costs, especially in the hospitality sector. With most industry workers moving to other industries in search of opportunities in a more stable environment, cost of hiring staff for events has significantly moved up. Also, as the entire event experience is dependent on staffing, decisions for number of staff required and facilities serviced through them is crucial for focused budget allocation and planning.
Logistics and Accommodation — Adopting sustainability, cost-efficient models, and planning intelligence can be the key to cut-off quite a large list of expenses in this group. Opting for a venue that uses solar power for energy, are close to airports (reduces logistics costs), and source local food (reduces food costs), along with flexible booking options, can be game-changers. Post-pandemic planners are hesitant to book too early due to uncertainties, whereas on the other hand many hotels now bill surcharge for last-minute bookings. It is highly recommended to make sure these aspects are openly discussed and inked before making any bookings.
3. Contingency Budgets — Prudently, 15–20% of the budget must be set-aside as a cushion for emergencies. There were no contingencies, said no event planner ever. Hidden costs and sudden crisis may come knocking without warning and to make sure the event flow is not affected, keeping a separate vault (fund) is absolutely essential.
4. Marketing and PR — Event promotion and PR costs depend on the type of event — whether it is a large event or an internal meet. What is the attendee demographic? Will it require more paid ads? Such questions must be addressed before allocating the marketing budget. Also, if the ticket size is big, event promotion budget will need more fuel to convince people to register and attend the event.
5. Event Technology — Penetrating deep into all event aspects, event technology is now available for almost all processes, be it attendee matchmaking, accessing digital marketplaces, live streaming, or budget management. Allocating event budget towards latest event technologies is crucial for an event’s success as they can seamlessly
Automate spends
Track pre-negotiated prices
Provide a holistic view of overall budget
Notify if the budget for any single element crosses the limit
Save costs through online check-ins, reduced staff requirements, etc.
In a nutshell, planners need to invest in event technologies that reduce efforts and bring ease of operations.
6. Mandatory Costs Whether the event is in-person, virtual, hybrid, or in the Metaverse, there are certain costs that are fixed and the trick lies in the negotiating skills of event organizers. Some of such areas include:
a. Speakers and hosts b. Music and entertainment c. Agency or event planner fees
Event industry professionals are battling everyday with rising costs of events. Achieving target ROI is harder than ever and sharpening planning and negotiation skills are crucial. With the changing trajectory of the industry, integrating event processes with these event budgeting tips can form a checklist or a foundation for elaborate budgeting for professionals who are new as well as experienced in event budgeting.
Source — Eventcombo
