Better event budgeting

By December 7, 2017Events, Uncategorized

John Fisher suggests that leaving event planning until the last minute is not only unprofessional, but expensive too.

The US wit and journalist H.L. Mencken was reputed to have once said: ’When someone says it is the principle of the thing, not the money, it’s the money.’ Event planning is like that. Buyers will always want the best possible value for money. But often there are two or three overriding factors, such as availability, which always work against getting the cheapest possible price.

Event budgeting is a trade-off between getting what you want and getting what is possible. All events are ‘one-time/one-place’ commodities and so trying to do a deal is always subject to how badly you want the event to happen at the time and in the place you want it to be.

That said, there are some principles to be aware of when putting together a budget for any event which always revolve around venue, time, production and outcome.

Venue

It may seem obvious but does your chosen venue or destination have to be where you first thought? City centre is great for accessibility but could be twice as expensive as an out-of-town centre with equally good facilities. Do you really need that spa and the rooftop cocktail area? They are clearly nice-to-have but if you are not planning to use them, why pay for them?

Do you definitely have to promote the venue many months in advance… and so pay top dollar…or could it be any downtown location which you can firm up on with say, 4 weeks’ notice…and so get a bargain price?

Do you actually need hotel accommodation? If the only people who stay overnight are the speakers, then choose a conference venue and make the speakers do the travelling. The less facilities you need, the less facilities you should be paying for.

Time

Parkinson’s Law states that people tend to fill their hours on any given task when they know the deadline. Event planning is no different. If you only have one week to set up and run an event, you work very fast. If you have three months, you tend to slow down to fill the time available. The trick, of course, is to maximise your time, without making mistakes, to achieve the same result. Unfortunately, fees for event managers are usually based on number of days input. This looks fine on paper but what happens when the CEO arbitrarily changes the venue or makes the programme twice as long. Planning needs to start again and the event management fees rack up, way beyond the budget.

Wisdom dictates that you should thoroughly investigate the content and the venue within the briefing document well in advance and ensure that everyone knows the financial consequence of ‘changing your mind’ at some future date

Production

There is a certain amount of intellectual thinking time required to devise what speakers are going to say. This is invariably done internally so there is no obvious cost to this process.

But when it comes to how to say things, cost rears its ugly head. However small the audience there will always be a price for production in terms of staging, sound and lighting. But if the audience is twice as big as expected, production costs can rise disproportionately. You may have to hire a bigger auditorium as well. Could running two smaller shows in the same venue on the same day work better?

With large events there is always the temptation to spend money on expensive gimmicks such as celebrity speakers, broadcast quality videos, well-known pop music soundtracks and one-off lighting effects, because the per head cost seems quite reasonable. Although such elements are impressive in themselves they do not always justify the additional, overall cost, nor are they even remembered by the audience as a ‘key learning takeaway’ when it comes to reviewing the success of the event later on.

Outcome

The most important thing when assessing event budgets is the desired outcome. If your aim is to cover your costs, do you have a way to track actual sales post-event or are you just guessing? If there is a staff loyalty/retention objective for your event, do you have a measure of what it is now and what it will be say three months after the event? If you have been given a set budget for the event, did you end up sticking to it or did you spend much more than expected? If so, by how much were you over budget and should this not be your contingency budget for all future, similar events?

In overall terms better budgeting can be achieved by getting your sponsors to engage fully in the thinking process behind venue choices and production at the beginning of the process, rather than waiting until it is too late to do anything other than simply spending more money to smooth over avoidable planning errors.

KEYNOTES 

  • Many international events have long lead times. This means there is plenty of time for currency costs to move against you. What plans do you have to hedge your fixed budget costs against currency movements?
  • Are you clear about VAT and local taxes, especially if you are a client which is exempt from some but not all aspects of VAT? VAT can potentially add 20% or more to your budget, if you have not already accounted for it.
  • Just double-check who is responsible for the costs of getting delegates to the event itself. Many organizations expect delegates to reclaim travel costs to corporate events from local budgets…but are you sure this is the case with your specific event?
  • Study carefully the attrition clauses in your venue contract…what happens to costs if only 60% of your expected delegates turn up on the day?

John Fisher, Managing Director
@John_Fisher01

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