Whether you spend $5,000 or $5 million, understanding what you want to achieve and the goal of an event or meeting will help define what’s realistic with your budget.
In their workshop at #ElevateNYC, Cheryl Gentry and Nicole Halton examined strategies that help meet clients’ expectations while staying within the budget. Here are some of their top tips.
Firstly, it’s important to understand what type of event you’re running, because that will dictate how you approach the whole budgeting process. In general, you can split events into three groups.
1. Profit-oriented events. These are events produced by corporations for the purpose of generating revenues and profits, so costs need to be tightly controlled and reviewed in line with revenue forecasts on a regular basis.
2. Break-even events. For break-even events, there will usually be a motivation beyond profit, but it’s equally important for it not to lose money, and so balancing the books is essential.
3. Hosted events. These events usually have a different purpose, from lead generation to saying thank you to staff or partners, through to promoting a cause of agenda. They don’t necessarily have to even break-even to be considered a success.
Once you know what kind of event you’re dealing with, there are then five main factors that can help to establish an accurate event budget.
1. Marketing projections and estimates i.e. how much is going to cost to promote the event
2. The history of previous or similar events i.e. how much did it cost in the past, so we can draw parallels from this.
3. The economy and future forecasts i.e. if the economy is good and there’s high demand for things, then our budget may increase; if it’s weak, we may have more bargaining power with suppliers.
4. ROI i.e. Are we expected to make a return on anything we’re bringing into the event, or is it a sunk cost?
5. Event financing i.e. Where will the money come from? Do we have to wait for sales to roll in, or is there a fixed costs and capital investment already allocated?
Now you’ve established the business objectives and the background to setting up your budget, it’s important to make sure your budget is M.A.S.T.E.R.ful. And what does that stand for exactly?
Measurable: You can’t control what you can’t measure! Make sure everything in a budget actually has a line-item against it, or that could be the thing that breaks your carefully balanced numbers.
Achievable: Budgets have to be realistic. Sure, they can be challenging, stretchy, ambitious…you name it…but they ultimately have to be achievable.
Specific: Budgets with huge ranges or ambiguous targets are extremely difficult to manage, so make sure you get the details nailed down early.
Time limited: Event’s are time-limited, so you better make sure you budgets are too. There’s no point in having a great deal on a venue if it’s in the wrong season!
Ends related: Budgets are there to serve the overall business purpose, so make sure its aligned.
Ranked: Balancing a budget typically involve compromise, so ensure you’ve got things ranked in importance so you know what can and can’t be changed when trying to keep things in-line with the total budget.
With all that in mind, there will still more tips on how to deliver your events on-budget every time, including:
Shop around – Never take the first offer! Make sure you shop around a range of suppliers and always be sure to compare ‘apples with apples’ so that you understand the true value of their products or services.
Negotiate – By shopping around, you’ll get a sense of what the best price is, so don’t be afraid to play one vendor off against another to achieve the offer you want. However, you should also approach your suppliers as partners, and set them a challenge to deliver what you need within the budget you’ve got. You’ll be amazed at their ingenuity and willingness to meet the challenge.
Be flexible – If you’re flexible, you can often achieve great results for less costs. For example many venues will have slower days or seasons which can help you get them at a better price.
Use your network – Don’t be shy about asking friends, colleagues and your extended network for introductions, recommendations or help if you think it can help you deliver your event on budget.
Technology is your friend – There are many great tools out there for event planners that can help you establish your budgets, from well-formatted excel sheets to apps like Super planner (downloadable from the iStore), Magic Plan, Meeting Grid and Doubledutch, each of them can play a part in reducing costs and managing budgets.