How to create event management budget: 25 TOP tips & a budget checklist
Planning your spendings for the whole year is one of the business’s pillar aspects. Well prepared budgets can ensure that the company will have funds to cover every forecasted activity. This will lead to achieving the company’s goals. How to create an event management budget and what are the top tips to do it efficiently? Dive in and find out!
Every entrepreneur wants to efficiently manage his business. To do so, it’s important to master the work of properly planning a company’s spendings in a long perspective. A well-planned budget is a key when it comes to optimizing the profits. In the same time, it’s contributing to achieving determined objectives.
It applies, in the same way, to event management budget. While setting up a budget for an event activity is a separate task, the analogy with creating the general budget is clearly visible. In both cases, you need to know your goals, the tools to carry on with the strategy and then prepare the financial plan that will let you start the process.
What does the event management budget planning process look like?
Event management budget is a crucial part of the event marketing strategy as it helps to make key decisions. It limits how far you can go with your plans and stimulate your creativity to make the best use 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. Let’s have a closer look at the event management budget building mechanism.
The process of planning the budget is a very complicated task. You need to take your time and consider all of the operations that took place in the company, especially those connected to events. Event budget planner needs to combine gathered information about spendings (on a venue, catering, suppliers and so on) and incomes (such as payments, funds from sponsors and more) with event marketing goals and objectives, what you want to achieve through with the budget and predicted future spendings. It should be done in a way that will contribute to achieving the best results and completing the determined objectives.
Another thing to remember is that the budget must be accepted by your board members. Therefore, you have to provide a document which form and contents should be clear and understandable for the receiver. Also, it needs to be promising in terms of profits that it’s going to bring. To increase your chances of getting your event management budget approval from authorities, choose a simple table where the crucial elements will be easy to analyze. What would they be? Among many points in your budget, those which would make it easier to get acceptance would be:
- Fixed costs
- Variable costs
- All of the incomes
- Spendings on individual event attractions
- Predictions of profits ( What will be your ROI?)
- Cash flow balance
These can vary depending on your company’s profile but don’t forget to show the benefits of the event marketing operations and point out event budget savings.
25 Tips and ideas to get you through the event management budget planning process
Now, that you have an idea of how the process of setting up a budget for an event should look like and what can help you to present it to the board, let’s take a look at tips that will make the process easier. Below I highlight top 25 hints that will contribute to the marvelous end effect of your event management budget.
#1 Start your planning in a proper advance
The process of planning event budget savings and spendings surely isn’t the easiest one. That’s why you should give yourself time to think it through. Start when it’s possible to get all the data you need and create yourself a time buffer. Just in case something will require a solid rethink (or two).
Time advance works well also when the environment you work in changes quickly. It will give you time to update the budget if needed before day zero. Speaking of updates…
#2 Set the time-frame
Now, this one might seem obvious if you’re an experienced event budget planner, but many neglect the importance of this point. Setting a precise time-frame for an event management budget is the key to leash the spendings and incomes balance. Knowing when the plan starts can help you monitor how it is going later on. Also, the end date gives a deadline to control the efficiency and balance sheet.
From the budget planner perspective, the proper time-frame gives the comfort of having a specified period to analyze and plan. Doing it without clear boundaries could be overwhelming and could lead to serious miscalculations.
#3 Don’t forget about the payment dues
Event management budget is not only about planning where the money goes but also when it’s supposed to happen. This is why it’s important to put an additional column in your budget file – the payment deadline. It’ll help you keep track of the payments that you need to make, and also those that you should receive. Having this cover you’ll be able to maintain the cash-flow of the budget and manage the late-payers.
#4 Get them sponsors
Acquiring sponsors may seem inadequate as a tip for building a budget, but the sooner you know the who and how will help you financial wise the better. After all, what can help your event management budget look better than additional incomes? Knowing who and at what scale will support your event marketing activity is also crucial when planning the single event’s budgets. It’s definitely a must to cover this point.
Try to think what companies may have similar goals with your company’s. Consider what value they stand for and determine the main benefits they could have from the cooperation. Then, contact those companies with the best profile and present your offer stressing out the profits the will get by supporting your event. This way it’ll be easier to convince them to sponsor your event. Also, make sure you’ll be able to measure actual profits afterward.
#5 Take care of your “rainy day fund”
Organizing events may be tricky and event planners know that they need to be prepared for unexpected. The same applies when it comes to setting up a budget for an event. You need to prepare a financial backup in case something will go wrong, or the error will occur. That’s exactly what’s called a rainy day fund. Therefore, leave a part of the money you have at your disposal for emergencies only.
Remember to make sure it’s still within the budget. You don’t want to overspend because you hoped rainy day fund won’t be needed. Also, do not use money from the fund unless it’s completely necessary. It’s a backup for emergencies only, not your margin of error in planning!
#6 Prepare various versions of the event management budget
The temptation to over- and underprice can be easily subdued. Try to think realistically and prepare various options for the budget. You can’t forecast how the environment or your company’s cash flow could change in the nearest future. Therefore, it’s best to have three of the financial plan up your sleeve. The pessimistic one can be helpful when the situation changes for worse and the company needs to do some cost cuts. Then, the optimal one will be used when the situation will stay as predicted. The optimistic scenario will be a plan for the most successful course of events and will be the richest version of the budget.
#7 Learn from your mistakes
Last but not least, taking 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, find what not to do in order to succeed. Look back at the previous mistakes, determine what went wrong and improve it. It’s the simplest way to transform yourself into a budget ninja.
#8 Remember that ROI is the base of the planning process
The whole efforts with creating event marketing strategy need to have a purpose, also the financial one. There’s no point in wasting resources, such as money and employees’ time or energy on something that won’t pay back. This is why, while setting up a budget, you need to control whether the investment will be beneficial for your cash flow and finances in general.
Also, it’s worth to count in the costs of tools that could let you validate the mentioned return. Along with setting the right KPIs to event activity, platforms like Eventory are able to measure the event performance and how it contributed to the final benefits. This way, not only the efficiency of spending the company’s money is clear but also the success of taken event strategy can be proven.
#9 Specify the breakeven points
Breakeven points are the income level that means no loss and no profit for the company. Generally speaking, it’s the amount of income that your budget needs to generate in order to maintain the positive finance’s balance. Therefore, while dealing with event marketing budget planning, it’s important to determine the minimum sum of incomes you have to get. It’ll be the first and base scenario. Then, you can work with the budget to make it more profitable and to generate further profits.
#10 Specify the forecast income
What will let you earn some additional points from your boss evaluating your budget is the section of forecasts. Especially when it comes to money the company will get. At the end of the budget planning quest combine the incomes and add everything up. Think how much money you’ll be able to win from sponsors. What will be the amount left of your budget after payments will be done? Then, try to determine what will be the returned income after the strategy is completed.
#11 Divide the event management budget structure into different sections
Remember my piece of advice from the beginning of the article? The importance of having a clear, easy to understand the structure of your budget is still needed. Therefore, try to block the points on the budget list in different categories. You can go for more overall division such as:
- Preparation for an event (venue, decorations, equipment etc.)
- Event’s service and costs (catering, hostesses, sound and technological service, security etc.)
- Promotion (posters, billboards, Facebook ads, online communication, mailing etc.)
- Salaries (e.g. payments for all companies and employees involved)
- And so on.
Alternatively, just go for more specified groups like attractions, promotion, outsource services and more. Both ways are good and make your budget sheet transparent which works for its user-friendliness.
#12 Set clear goals and objectives for the budget
Doing a budget planning without knowing why you’re going to spend a determined sum of money is like acting against your own interest. It exposes you to chaos in your process and missing the point of the strategy. Therefore, before you start analyzing the finances, take a minute to determine what you want to achieve through certain activities. Then, rate them in terms of importance – decide on the main goal and the sub-objectives. After this, you’re good to go with planning the best way to spend your money in order to complete the given aims.
Also, when the evaluation time comes, clear goals can help you present the profits. You can determine how much income you got and compare it with determined objectives.
#13 Don’t be afraid to be detailed
The more precise your event marketing budget will be – the better. This is why you don’t need to be afraid that you pay too much attention to details. It just shows how diligently prepared is your budget. Trust me, the board will appreciate the budget’s consistency. Also, it will contribute to the better effects when you will cover every possible aspect of the finances. However, also in this case, don’t forget to group and sum up the spendings to make the budget easier to evaluate.
#14 Go for separate budgets for each event
Every event has its own specifics which is why it’s not worth to dive deep into details of each event in the general event management budget. Therefore, keep in mind that you’re gonna treat them separately and plan a precise sum to be at every endeavor’s disposal. At this point, you don’t need more.
Later on, you need to prepare a special budget for them, taking into account money foreseen in the first, overall event management budget. This way you don’t waste time doing a specified budget at the beginning of the year but you can take your time and do it when the event’s time comes.
#15 Plan offline and online marketing separately
While dividing your budget into categories bare in mind that it’s good to consider online and offline channels of promotion separately. Why? Sometimes event managers lump them together and the effects can be poor. It’s because considering promotion without having a proper look at its every type may lead to neglection.
Just imagine, you’re creating a sheet of spendings on the whole promotion. Everything looks great, but we can notice some disparities. In the end, the event is promoted mostly on the internet, which is supported by a couple of simple billboards. There was no money for more because of collected planning – the fund was not divided evenhandedly. This way the news about the event may not reach as many potential attendees as it could. Therefore, consider online and offline promotion separately to make sure that they both get attention and funds equally.
#16 Go for the financial framework when forecasting incomes
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 minimal sum you’ll accept and the biggest you could possibly get. This way your forecasts will have its margin of error which will not affect the whole budget frame.
#17 Think where can you make some savings
To meet (and exceed) the breakeven point with the incomes generated in your budget you can look for the aspects at which some costs may be cut. 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. Often the 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, it’ll be more convenient for them and cheaper for you.
#18 Bare in mind that there are costs that can’t be cut
At the same time, you need to accept that there are some event elements that you must pay a proper price for. Don’t try to lower these spendings no matter what. Determine fixed points of the event marketing budget. Those will be things which simply can’t be saved on or it’s impossible to find an alternative fore and therefore you’re going to have to pay for them. Don’t panic when the budget is exceeded it can all be fixed later on.
#19 Don’t go with the first offer you got, think about event budget savings
While preparing a budget, you need to check the best options you can possibly have. It applies to deals offered by the supplier, outsourced companies and so on. Sometimes you may want to end the process quickly and, therefore, you accept the first deal proposed. It’s understandable that you don’t want to go on and on with negotiations but it may help you create some event budget savings.
Wait with the decision, consider other options and send a couple different requests for quotation. Believe me, your supplier will be more willing to meet you halfway with the price when you will have some more attractive offers up your sleeve! Sometimes, it’s better to wait for a while and pay less.
#20 Don’t underprice single elements to make your event budget savings look better
It may sound obvious but, unfortunately, many 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 what’s the point in faking the real situation of your company’s finances.
Underpricing is dangerous in terms of an organization process. Accidents happen, you may not be able to get your products on the lowest market price and so on. Such dealings lead to overspending and I bet that’s not something you’d like to explain to your boss at the end of the term, wouldn’t you?
#21 Plan the tools you’re going to need and count them in
Don’t forget to count in different accessory tools that might be necessary during the event organizing process. 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 the idea of tools you may need should clarify. Will you need a mailing platform to automate the communication? Maybe you’ll need an event planning platform, like Eventory to keep track of the whole process.
Consider at what stages which tools you need and count the cost of subscription into the budget. While doing so, you won’t need extra cash later on.
#22 Use adequate tools to keep your budget planning process ‘clean’
Transparency is the key when you’re dealing with multiple columns of numbers. Also, it’s essential to make your budget understandable and clear. Therefore, take your time to find a proper tool that will help you not to get lost in thousands of numbers.
One of the most popular and easily shareable tools to build complex budget files is a simple Microsoft Excel. Alternatively, Google Spreadsheet will make it easy to access for your whole team and the features work mostly the same. The former offers you more specialistic formulas and easier graphic editor but the latter is much more comfortable to share and edit. The spreadsheet method may seem a little basic but believe me, marking columns with colors and labels, the ability to add comments make the process much easier to work with.
Also, think about the tables and graphs you will need to present to your boss. Once again, the spreadsheet will let you automatically export data and create a visualization you need.
#23 Check on your budget from time to time
It’s good, once you have your event management budget set, to check on its current state considering external factors. Maybe the prices changed while it waited to be presented to the board? It’s good to double check the accurateness before the plan will be brought to life. Just in case.
Also, double checking helps you control the spendings. Imagine that the venue you were planning to use isn’t available for your date at the price you predicted. You’re forced to change the plans and spend much more money on the event space than you planned. Checking your budget once again let you find money for this purpose by, for example, letting go one of the attractions.
#24 Do your research, check the history of the company’s spendings
To make sure you won’t fall in a trap of underpricing you need to have substantive knowledge of finance history of your company. See how the budgets from (at least) three years before were built. Were they efficient? Maybe some of the aspects led to overspending or in some cases there was enough money left to creatively use it. Do your research and draw conclusions. This should point you a direction to go with your event management budget and show you realistic mechanisms.
Also, if you’re dealing with the budget for the first time and you don’t have access to previous plans reach for the Internet’s help. Search for budget proposal sample and try to rearrange it to fit your purposes.
Take care of proper visualization. You can go for graphs and tables or simply leave the numbers properly written down. Each way, it’s the part where you show your budget’s value.
#25 Think realistically
Often while setting up a budget you may feel the temptation to stretch it, both on plus and minus. Believe me, it never works well. There’s no use for you to fake the prices or make them bigger. Either way, it will contribute to the various problems with the budget during the year such as the lack of money or underpriced attractions for your event. Everything that will miss the true situation will lead to consequences so try not to fake anything.
Your checklist: Budget proposal sample for an event
While every event budget planner may have his own tips and proven methods to slay in preparing event marketing budget, the tips presented above can be helpful for us all to understand the complexity of the task.
Every budget planning requires a couple of steps that need to be covered in order to make the process easier. The exemplary checklist could look like:
- Gather information about the previous budgets
- Prepare a transparent spreadsheet to fill it with data
- Divide data into categories
- Choose the best offers and implement them into the budget
- Forecast possible incomes
- Take care of the budget’s presentation side
- Win your boss’ heart with what you’ve prepared.
And there you have it, a list of ideas to help you get you through the budget building site and a small reminder of what to do. Go and plan your event finances!
Do you have any tips to share with us?