One of the most important tools to control any event is the event budget. It’s normally just a simple excel spreadsheet or perhaps its a page on your accounting software. Despite it being just a humble document the budget is what underpins every successful event. In this post, I want to help you give your event budget the once over. Here is my event budget health check!
1. Have you heard of such a thing as a budget?
Let’s start with the most obvious one, do you have an event budget? Every event where there are costs and or revenue should have a budget. No matter the time constraints or the size of the event, if there is money involved somewhere, you should find the time to do a quick event budget.
2. Everyone involved in the event (who has some authority) has an input into the budget
If your event has a few stakeholders, it is worth having their input into the budget before it is set. Sometimes an event can have several stakeholders, and they may all have a different opinion on what you can spend, or perhaps even if you should be making a profit. So it’s a good idea to make sure all your stakeholders see the budget before it is set.
3. Everyone (above) should physically, sign off on the budget
Often an event organiser can have input from all the stakeholders but forgets to get them all to “sign off” the budget. This is a mistake I learned very early on when I was managing events for several stakeholders. It is essential for you to be working to a budget that has been agreed by everyone and importantly it’s very useful to have “proof” that it has been agreed.
4. It is realistic and based on some knowledge or experience (avoiding wild guesses)
It’s very easy to just drop in any old number when creating a budget. Of course, you wouldn’t do that! But was your predecessor so thorough? It is really important that you add realistic figures or the budget isn’t worth the excel spreadsheet it’s written on.
5. It is detailed, breaking down the elements as much as possible
Often I will see a budget that says something like “venue costs” next to a figure. This isn’t detailed enough. A good budget should be much more granular. For example “venue costs” should be broken into room hire (for each room), AV, Security, WiFi etc. The key is to break it down as much as you can. This will allow you to see what the costs.
6. It includes both income and expenditure
A budget has to offer as much information as possible. Knowing all your costs and all your income will allow you to find out the most important thing: how much you have made/lost.
7. It has a clear breakeven point (if it’s for profit)
This is important for any event that has a profit objective. Knowing at what point you start to make money is like the light at the end of the tunnel. It is a great feeling to look at your budget and know that every extra booking is profit. This is also crucial if you are considering cancelling an event owing to lower than expected numbers.
8. It shows the “actual” against the “projected”
I believe that all budgets should be working budgets. Often I see this function separated. It is a great idea to have your “live” budget sit next to your actual budget. Of course, it is likely that you will make small changes from your signed off budget and it’s really useful to be able to see how you are doing against your expectations.
9. It includes a “contingency” related to the level of risk of the event
An event contingency is an amount that you put in your budget to cover any un-budgeted or unforeseen costs. It is crucial that your event budget includes a contingency. Here’s a post that details exactly how you calculate a contingency.
10. You constantly refer to the budget using it to guide your decisions
You shouldn’t make any significant choices without first referring to your budget. I use it as a kind of anchor to stop me getting too carried away (this happens especially after menu tastings when I tend to opt for an over-budget bottle of wine). Perhaps you WANT that nicer wine on the table, but the budget will tell you if you can afford it or not.
You really can’t run a successful event without a budget. I hope the above helps you give your current process a health check.
William Thomson is an events consultant and blogs regularly on his Gallus Events website which has loads of useful posts for Assistants who organise events.