Wondering how to plan an event budget? You might be sitting in your office, head in hands while asking yourself this question. If you have not yet cracked the code, we can help.
In the past, you may have endured lousy PowerPoint presentations called ‘The Best Budgeting Methods’. Well, forget all that. We have paved a clear path for you, which will guarantee peace of mind.
First things first: it’s important to budget effectively. Your time and resources are valuable, so don’t waste them by mastering the best budgeting methods.
Read through this article and learn how to plan an event budget from scratch. After this, you will never return to the dark side of financial planning.
Goal Setting for Your Event Budget
Remember your high school teachers and their goal-setting exercises? Well, their wisdom has been reincarnated. Goal setting is vital for effective budgeting.
Start by clarifying what the goal of your event is. Take time for brainstorming sessions and get to the point. Brainstorming is an incredible tool to help with this. Use it!
Only create your event budget after you have set your priorities straight.
Priorities, Secondary, and ‘Add-Ons’
Write your goals down under three categories — Priority, Secondary, and Add-Ons. Simple yet descriptive.
The Priority items are the essential aspects of your event. These are the pillars of your event. It cannot take place without it. These items are crucial, with a capital ‘C’.
Secondary items are not necessary for the success of your event. However, those items will increase the value of it. For example, it would be handy to rent an additional cloakroom, but the in-house one would suffice. Only turn to this ‘secondary’ list after you have checked off all the Priority items.
Add-Ons are non-essential items you could include in your event. However, they won’t make or break the overall outcome. For example, adding extra balloons at the venue entrance is dandy but not essential.
Clarifying these Add-Ons for yourself and your team is valuable as it gives you a chance to consider your goals from all angles.
Next, write down how much you would be willing to spend on each component of your Priority List. Assign a number to each item and hold yourself accountable to it. Trust us; you do not want to end up with any big financial surprises. Do this with the other two lists too. Be clear on the details and try to be as precise as possible.
Ask for Feedback From Your Peers
Feedback, feedback, and more feedback. Questions and uncertainties at the start of your budgeting process are inevitable. So take knowledge from previous years and set-up yourself up for success. Do this with care and bring in your team to help.
Everyone has a voice which should be heard. Feedback is essential but can also be a bit scary. Stay respectful, whether you are providing or receiving the feedback.
To build an airtight event budget, cut out anything that did not add value to previous events. Be critical and understand the value of last year’s attendees and organisers. Their opinions are a goldmine. Build your event budget with that in mind. By actively doing this, you will eliminate any guesswork.
Review and Analyse Your Event Budget
Always be on top of analysing the costs of your event budget. We cannot emphasise this enough. You need to keep your goals in mind and be critical. Are the costs of your secondary items worth the increase in the total cost? No? Then scrap it.
Review Your Costs Closely
There is value to be found in reviewing your current event budget with the one from last year. Do not merely copy a ‘successful formula’ but make sure that you review it. Changing a winning team can make you a champion. With that in mind, do not do this alone.
Do this with your team and ask them to be critical. Tell them to ask questions throughout the review. This might trigger you to think about things that you hadn’t before. Explain your budgeting process to your colleagues and let them keep you accountable. This is also a part of the process in which brainstorming is an invaluable tool.
Start with an easy exercise: draw up two separate columns. Simple pen and paper will do. Start with the first column, stating the expected (projected) costs of each event item. The second column should state the actual costs. Place both columns next to each other and give yourself clarity and overview.
See something in either column that doesn’t sit well? Can an increase or decrease be explained? Did you miss something? Is there a reason why a specific item on your budget turned out to be more expensive? All these questions are valid but should be answered for you to be able to justify decisions.
It is a simple exercise to start with to have a base. Make your thoughts tangible and give yourself peace of mind.
Contingency for Peace of Mind
We know that organising an event can be tedious. Planning is important because there are always unforeseen circumstances. Building contingency into your budget is an important step to take. If something ends up going wrong, then you’re covered.
Here is a golden tip from us to you. Calculate about 10-15% on top of your budget. Dedicate this to ‘the unexpected’. If something goes wrong, then you can take care of it.
Did the flowers arrive wilted on the day of the event? Your contingency budget has got you covered. Did we forget to order decaf coffee? Contingency. Did we forget to order pastries for all guests? Well, you know the answer.
Fixed and Variable Costs
Make sure to clarify the fixed and variable costs in your event budget. They will vary, and this is natural and unavoidable. Taking note of this upfront and being realistic is the first step, so you are already on the right path.
Your fixed costs are straightforward and easier to calculate when compared to your variable costs. The fixed costs will be clear upfront and are the foundation of your event budget. Writing these down will give you an awareness of what a large part of your expenses consists of.
Your variable costs will be the area where you can gain ground. Catering is a good example. Your F&B will highly depend on the type of service and quality of food you want to serve to guests. This will, therefore, be a type of cost you can play with.
Do not sell yourself on the first supplier you come across. Trust us; there is always another caterer who can make the same cheese sandwich. Be critical and ask for multiple quotes from various vendors. Give yourself ample time to plan and operate according to your timeline. This is a rule of thumb across the board.
Having multiple quotes provides you with the option to negotiate and decrease your event budget where possible. Step in the shoes of a master negotiator and receive the price you need, nay, deserve.
Technology Can Be Pricey
Don’t overlook the costs associated with event technology. They can vary significantly from standard AV equipment to grand audio systems.
If you lack expertise in this area, consider consulting a professional. Most of us know how to plug a laptop into a beamer. But don’t be mistaken. Technology at an event can take on many shapes and forms. It’s in your best interest to recognise this early and dedicate a notable amount to each item. Remember how much that newest iPhone cost? Well, amplify that even further and you might get close to what a hybrid event could cost you.
Hybrid events became more popular in 2020. The global pandemic has changed the industry. According to the Digital Experience Institute, the equipment required for a successful hybrid event can go up to €20.000. As said before, do not underestimate this.
Do I Pay Taxes or Not?
Cut costs where you can while aiming for success. Everyone loves receiving a personal Tax Return. But this is not your personal finances. This is money from the company.
Check whether or not your conference qualifies for any tax exemptions. It’s best to verify with the local government since it varies per country.
If you do not qualify for any tax exemptions, include the taxes in your budget. Make no mistake of the impact an additional 20% on top of your costs can have. Increasing your total costs by a fifth will make your budget look a lot different.
Cut costs where you can while aiming for success. Everyone loves receiving a personal Tax Return. But in this situation, we are not talking about your personal finances.
Check whether or not your event qualifies for any tax exemptions. Do this early on and do not wait too long. It’s best to verify this with the local government since it varies per country.
If you do not qualify for any tax exemptions, be clear to include the taxes in your budget. Make no mistake of the impact an additional +/- 20% on top of your total costs can have. Increasing your total costs by a fifth will make your budget look a lot different. Be smart and be aware. You heard it here first folks.
Automation Is Your Friend
There are several budgeting methods which you can use. In this day and age, you should automate what you can. It is nonsensical to lose time working everything out manually.
Automating your event budget is an investment you should gladly take. Tools which manage your finances are essential. You will also need to look into other parts of your process, which could be automated. Think of your email services and your daily tasks.
Start every day with a to-do list for yourself. If you still write your items on sticky notes, then we are here to help you. Take it from us, automate your to-do lists.
If your business uses Hubspot (like us), work with this as well. This tool provides you with many automation tools. Email outreach and task management are all integrated. Track your work, and it will help you keep organised.
Make use of Sched to take away the stress of your event program. Cutting printing costs can make a significant positive impact on your budget. It will also save you a lot of time. A big plus is the virtual thank-you-note from Mother Nature. Save the environment!
There are many other automation tools out there, which will help you figure out how to plan an event budget. Do not underestimate the power of this.
Spacehuntr’s Event Budget Tool
If you’re struggling to get off the ground, we have developed a helpful tool to get you started. The Spacehuntr Event Budget Tool asks a couple of basic questions so you can get a rough idea of your event costs.
Need a more thorough overview? Download our budget template below. This easy-to-use template will provide you with a clear and professional starting point that will help you with this daunting task.
Building a budget from scratch is challenging. You’re working with the company’s finances, so there is no room for screwing up. Hopefully, our tools have given you an insight into how to plan an event budget. These fool-proof tips have helped us and will do the same for you.
Featured image: Techspace Shoreditch via Spacehuntr