At the end of the day, the only success metric that matters is: did you make money? Good financial planning is key for any project to be successful. When it comes to conferences and events, a budget is a also a tool that can translate the event goals and objectives into financial terms, helps to shape key decisions around your event, and provides a point of focus for the many decisions that need to be made.
The Fundamentals of Creating a Conference Budget
1. Obtain past financial reports for the same or similar event. This will give you insights into the demographics of your audience, and a baseline for year-over-year comparison.
2. Define your sources of revenue. You and the conference team need to review the various revenue streams available:
- Attendee revenue – taking into account variations in pricing offers (such as early bird rate, group discount, full freight, non-profit, cancellation administrative fee, etc.)
- Sponsor revenue – taking into account variations in different packages, as well as including ancillary revenue (catering functions, registration, etc.)
- Ancillary revenue – hosting special events at an additional cost (e.g. golf outing, pre-conference workshops, etc.)
3. Identify expenses. Each event is different, but some of the line items that could be included within an event budget include: facilities/room rental charges; food & beverage; audio visual; furniture rental; entertainment; travel and lodging; staffing; décor; equipment (Internet, phones, etc.)
4. Get the quotes. You have determined with your team the expenditures that will impact your budget. What’s next? Begin obtaining quotes based on your requirements, including:
- Venue — this is typically the biggest expense on your bottom line, so be sure to take into account:
- Updated menu costs for catering functions
- Décor – what in-house furniture, linens, etc. is available; or does this need to be outsourced?
- Labor charges for load-in; load-out; set-up fees of functions, security, sanitation/utility, etc.
- Other contracted costs including room rental, IT & electric needs, etc.
- 3rd party vendors based on your needs (production, photographer, décor, registration materials, etc.)
5. Create an Excel Worksheet reflecting the per-person cost based on attendance.
See the example below:
6. Create and enter data into your budget. Using the worksheet you created (and having received pricing as needed), begin entering the proposed budget detail into your budget template. You may want to create a few different scenarios to talk through with your team until everyone can agree on the decisions that need to be made to have a budget that works.
Don’t Learn These Event Budgeting Lessons The Hard Way!
Here a few helpful hints to keep in mind while setting up – and managing – your event budget:
- Budget templates are typically created as Excel spreadsheets. As you update your budget and add new new line items, always double-check your formulas to ensure everything is calculating correctly.
- Keep hidden costs in mind (e.g. Overtime, Delivery, Power)
- Be sure you to incorporate inflation into budget figures (e.g. catering increases) if they are not defined within your contract. (Note: this should be part of your negotiations when contracting.)
- Include any gratuities and taxes. These can have a huge negative impact on your budget — I saw this happen to a very seasoned planner who was having an “off day” — once the event was over and it was time to reconcile the expenses, it became an “off” day for all involved!
- If you have a room block with a venue – head into the event aiming to surpass revenue goals and attendance, but always keep a line item in the budget for possible attrition and highlight it within the budget for the team.
- Last but not least – when creating your budget, be realistic. Build flexibility into your budget but don’t inflate your costs too aggressively.
How does this process compare to budgets you’ve set up in the past? Do you have any helpful hints that you can share?