How to Create an Event Management Budget: Top 25 Tips & Budgeting Checklist
Feb 8, 2022 1:57:38 PM
Budgets that are well-prepared can ensure that a company will have funds to cover each activity that they’ve forecasted for the year, which leads to achieving company-wide goals. One thing companies usually set aside a budget for is events. So, how do you create an event management budget, and what are the top tips to do so efficiently? First and foremost, you need to know your goals, as well as the tools you’ll need to implement your strategy.
The budget for your event management is a crucial part of the event marketing strategy, as it helps to make key decisions. Setting a budget limits how far you can go with your plans, and stimulates creativity so you can make the most out of the sum you have at your disposal. However, you first need to know how to properly create your event budget savings and sell your budget proposal to the authorities in the company.
The process of planning the budget is a very complicated task. You need to take your time and consider all of the operations that take place in the company, especially those connected to events. The event budget planner needs to first consider what they’ll be spending (the prices of a venue, catering, suppliers, etc.), as well as any projected profit (such as payments and funds from sponsors).
Another thing to remember is that the budget must be accepted by fellow board members; therefore, it’s important to provide documentation. The budget also needs to be promising, in terms of profits that it’s going to bring.
To increase your chances of getting your event management budget approved, analyze the crucial elements (which may vary, depending on your company’s goals). For example:
Now that you have an idea of how to set up a budget for an event, as well as the variables you’ll need to present to the leadership board, let’s take a look at tips on how to budget that will make the process easier.
The process of planning event budget savings and spendings surely isn’t the easiest one, which is why you should give yourself time to think it through. Gather all of the data you need ahead of time, just in case you need to evaluate a thing (or two). Doing so in advance will allow you time to update the budget if needed before live-day.
This one might seem obvious if you’re an experienced event budget planner, but many neglect the importance of setting an actual time frame. Knowing when the plan starts can help you monitor how it’s going at a cadence. The end date also provides a deadline to control the efficiency and balance sheet. Giving yourself a proper time frame provides you with a specific period to analyze and plan. Doing it without clear boundaries could be overwhelming and could lead to serious miscalculations.
Event budgeting is not only about planning where the money goes, but also when it goes. It’s important to add payment deadlines to your budgeting sheet. This will help you keep track of due dates, as well as dates in which you expect to be paid. By having this information handy, you’ll be able to maintain the cash-flow of the budget and manage the late-payers.
Acquiring sponsors may seem inadequate as a tip for building a budget, but the sooner you have secured the talent, the better. Knowing who is willing to sponsor your event and at what scale will also help support event marketing activity.
When it comes to securing your talent, consider companies that may have similar goals to your company, as well as what values they stand for. Then, contact those companies with the best profile and present your offer, highlighting the benefits for them as a sponsor. While doing so, make sure you’ll be able to measure actual profits afterward.
Organizing events can be tricky, and event planners know that they need to be prepared for the unexpected. The same applies when it comes to setting up a budget for an event; you need to prepare a financial backup, just in case something goes wrong. Consider your rainy day fund by putting aside some of your budget for emergencies. Do not use money from the fund unless it’s completely necessary. Important to note: a rainy day fund is backup cash for emergencies only, not your margin of error in planning!
The temptation to overprice and underprice can be easily subdued. Try to think realistically by preparing various versions of your budget. You can’t forecast how the environment or your company’s cash flow could change in the near future; therefore, it’s best to have three different financial plans up your sleeve.
Take a lesson from the past. Every event manager can make mistakes, but the key is to draw conclusions; therefore, before starting setting up a budget, highlight what not to do in order to succeed. Look back at any previous mistakes, determine what went wrong, and improve upon them. It’s the simplest way to transform yourself into a budget ninja.
Just like an event marketing strategy needs to have a purpose, so does a financial strategy. There’s no point in wasting resources, such as money and employees’ time or energy, on something that won’t pay back. While setting up a budget, you need to control whether the investment will be beneficial for your cash flow and finances in general.
It’s worth counting on the costs of tools that help with ROI, as well. Along with identifying the right KPIs for your event, platforms like Eventory by 6Connex are able to measure the event performance and how it contributed to the final benefits. This way, not only the efficiency of spending is clear, but also the success of the event strategy can be proven.
The break-even point is the point at which total cost and total revenue are equal, where there’s no net loss or gain. Generally speaking, it’s the amount of income that your budget needs to generate in order to maintain a balance. Therefore, while dealing with event budget planning, it’s important to determine the minimum sum of incomes you have to get, which will be the first and base scenario. Then, you can work with the budget to make the break-even point more profitable.
Earn some additional points from your boss by evaluating forecasts into your event budget, especially when it comes to ROI. Once you’re complete with planning your budget, combine the incomes and add everything up. What will be the amount left of your budget after you’ve received payments from attendees and sponsors? Try to determine your ROI after your event strategy has been initiated.
As mentioned, it’s important that your management budget has a clear structure, and is easy to understand. Therefore, break down your budget into different categories. You can go for more overall division such as:
Alternatively, you can break it down into specific groups like attractions, promotion, outsource services, etc. Breaking down your budget into categories shows greater transparency.
Budget planning without knowing why you’re spending is like acting against your own interests. It exposes you to chaos in your process, and ultimately you can miss the point of an entire strategy. Before you start analyzing your finances, take a minute to determine what you want to achieve from certain aspects of the strategy. Then, rate them in terms of importance. First, decide on your main goal and your objectives. Next, begin planning the best way to spend your money in order to meet these goals. Clear goals allow you to present your successes and profits. You can determine the ROI and compare it with the objectives you had set forth for the event.
The more precise your budget is, the better. Paying great attention to detail shows how diligently prepared you are, not to mention that the board of approval will appreciate the budget’s consistency. Don’t forget to total the spendings to make the budget easier to evaluate.
Every event has its own specifics, which is why it’s not worth diving deep into details of each event in the first budget you create; it’s important to treat each event separately. The overall event management budget is just the beginning shell that you can use for all your budgets moving forward. This way, you can take your time and plan each event’s budget when the time comes.
While dividing your budget into categories, bear in mind that it’s good to consider online and offline channels of promotion separately.
Hypothetical Scenario: Imagine creating a sheet of spendings on the whole promotion. While everything looks great, there are some disparities. In the end, the event is promoted mostly on the internet, which is supported by a couple of simple paid search ads. At this point, there is no more money for paid ads, because the spend was not divided evenly. Thus, consider traditional marketing and digital marketing and promotion separately to make sure that they both get attention and funds equally.
It may be hard to estimate an overall sum that you’ll get from sponsors and partners. However, for planning purposes, you can try to come up with some financial framework. Determine the minimum sum you’ll accept, as well as the greatest possibility you could get. This way, your forecasts will have a margin of error which will not affect the whole budget frame.
To meet (and exceed) the break-even point with the incomes generated in your budget, you can look for the aspects at which some costs may be cut. To do so, determine the areas where the budget can be modified. Think which currently outsourced work can be delegated to the company’s employees. Look for market alternatives that could offer a better price for the same quality provided. Oftentimes, event budget savings may lead to improvements in your event. For example, costs of the printed materials can be eliminated with the use of event technology. Attendees will get access to mobile materials, which will be more convenient for them, and cheaper for you.
At the same time, you need to accept that there are some event elements that are non-negotiable. You know what they say, “you get what you pay for.” Determine fixed points of the event marketing budget, which will be things that simply can’t be saved on, or it’s impossible to find an alternative for. Don’t panic if the planning in the budget has exceeded its limits, you can move other costs around before finalizing it.
While preparing a budget, you need to be looking for the best possible option. It applies to deals offered by the supplier, outsourced companies, and so on. Sometimes you may want to make a quick decision and accept the first deal proposed. While it’s understandable to want to avoid any negotiations, talking down some prices may help you create some event budget savings.
Wait on making a final decision by considering other options and getting other quotes. Believe it or not, your supplier may just be more willing to meet you halfway with the price when you have some more attractive offers up your sleeve!
It may sound obvious, but unfortunately, many event planners make this rookie mistake while dealing with budgets. They put a minimal price in the calculations, or decide to lessen the scale of investment, just to make the ends meet. The total balance in the budget is important, but there’s no point in making an unrealistic budget that’s priced lower than the reality of the costs. Underpricing is dangerous in terms of an organization process.
Don’t forget to consider all the event tech you’ll need to run a successful event. Sometimes, it’s not obvious that you will need a certain platform. Take a moment and think about the goals you want to achieve and how you’re going to do it. This way, you’ll be able to break down what tools you’ll need for your success. Will you need a virtual event platform to run a fully-digital or hybrid event? Will you need an event management tool for check-ins to an in-person event? Consider what tools you’ll need and at which stages, and count the cost of subscriptions into the budget.
Transparency is the key when you’re dealing with many different numbers. It’s also essential to make your budget understandable and clear. Take your time to find a proper tool that will help you keep track of all your numbers.
One of the most popular and easily shareable tools to build complex budget files is a simple Microsoft Excel. Alternatively, Google Sheets will make it easy to access for your whole team, and the features work mostly the same. These sheets allow for specialistic formulas, sharing, and editing. Marking columns with colors and labels makes the process much easier to work with.
It’s important to also consider the different tables and graphs you may need to present to those who are approving your event budget. These spreadsheets will let you automatically export data and create the visual aspect you’ll need.
Once you have your event management budget set, continue to consider external factors and make edits when necessary. Perhaps prices changed while you were waiting to present the overall budget to the board. It’s good to double check the accuracy before putting the budget into play. Double checking your budget helps to control the spendings
Hypothetical Scenario: Imagine that the venue you were planning to use isn’t available for your date at the price you predicted. In this case, you’re forced to change the plans and spend a different price on an event space than you had originally planned. Checking your budget will allow you to allocate money where it’s needed, letting go of what isn’t completely necessary.
To make sure you won’t fall into a trap of underpricing, you’ll need to do your research in regards to previous event budgets. Take a look at the budgets and spending from the last few years - was the budget enough, and was it efficient? Did some aspects lead to overspending? Was the extra room in the budget to use creatively? Do your research and draw conclusions as to how much budget you’re able to work with. This will point you in the right direction with a realistic spending limit.
If you’re dealing with the budget for the first time and you don’t have access to previous plans, you can also do your research online. Search for a budget proposal sample and try to rearrange it to fit your goals and objectives.
Oftentimes while setting up a budget you may feel the temptation to stretch it, both on the plus and the minus. However, you should avoid doing so. Both underpricing and overpricing will contribute to the various problems with the budget during the year, such as a lack of budget, or underpriced attractions for your event.
While every event planner may have their own tips and proven methods in budgeting, the tips presented above are helpful for anyone to understand the complexity of budgeting. If you’re ready to put your budget into action, 6Connex can take care of the rest, from the event engagement tools down to an open universe of event tech integrations. An accurate budget and a reputable virtual platform like 6Connex is all you need to get started with running a successful event, whether it be hosted in-person, virtual, or as a hybrid combination of the two. For more information, contact us today, or check out our virtual event blog for more resources.