Creating an event budget is one of the first and most important tasks in managing an event. In the initial event planning phase, the development of a budget helps to establish whether the event will be viable like, whether total revenues will cover total costs.
Firm commitments to run an event should not be made until sufficient budgeting has been undertaken to establish viability.
Its a case of making a start somehow, anyhow by getting some rough estimates down on paper.
Then day by day, week by week, the event manager task is to refine rough estimates by seeking information through a number of ways by researching and talking to staff, contractors, and stakeholders.
As planning continues, and more information comes to hand, the event manager can prepare the budget more accurately.
Estimating Event Income
Probably a good place to start in the event budgeting process is to consider where the money will be coming from to pay for the costs of the event.
The event manager will need to consult with anyone who has knowledge of similar events or can assist the event manager to make realistic estimates.
Typically, the principal sources of event income are:
- Money paid by event participants (ex. registration fees).
- Money paid by event spectators (ex. entry fees, food, or drink sales).
- Government Funding.
- Money paid by a parent organization (ex. state association).
Importantly, all sources of income must be estimated realistically.
Overestimating income is a sure way to run into financial difficulty.
Estimating Event Costs
After estimating event income, the event manager will need to identify the costs that the event will incur.
Again the event manager will need to consult with people who have experience of similar events or can help the event manager identify types of expenditures and workout probable costs.
There is always the probability that something will be missed if the event manager fails to consult.
- The event manager will need to obtain accurate costing from potential suppliers. This can be done by making some telephone calls.
- The event manager can call the newspaper and gets some quotes on advertising space.
- How many programs does the event manager need, does he want color? He can call the printer and gets some quotes.
- How many officials will the event manager need to provide accommodation? He can call some local hotels and get some quotes. How to Prepare Event Plan for College Day Celebration.
- Does the event manager need to provide any catering (finger food and drinks) for the dignitaries and officials for after the opening ceremony? He can call some caterers and get some prices.
- How many trophies does the event manager think will be needed? The event manager can call the trophy shop and get some idea of prices.
- As the event manager obtains quotes, a picture of costs begins to emerge. The more research and consultation, the more accurate the event manager’s budget will likely be.
Creating an Income and Expenditure Budget for Event
As the event manager identifies income and expenditure, he will be able to create a summary that predicts the financial viability of the event.
There is always a great temptation to alter the figures if the event manager’s research efforts indicate a possible loss.
An event budget must at least show a break event situation. But the event manager should resist boosting figures for income or decreasing project event costs.
Instead, a strategy the event manager might adopt in trying to improve his events financial profitability is to redesign the event. This might include changing:
- The duration of the event.
- The participant groups.
- The venue or facility.
- The scale of the event in terms of participant numbers.
- The type of event or program of the event.
Recommended for You: