Event Design - Budget
- Jose Martinez Juarez
- Jul 8, 2024
- 3 min read
Rule number 1: never lose money.
Rule number 2: never forget rule number 1
WARREN BUFFETT
Budget is not always the part that event planners like to develop the most, however, it is through the budget analysis that we can ground our ideas so that they can be a reality.
The budget does not have to be complicated. It is a fact that each type of event has its peculiarities, but as you run more and more events you can adapt the budget concepts without difficulty.
The budget should be designed once we are clear about the type of event we want to organize, as well as when the destination, the venue and all the activities of the program are defined.
INCOME
List all those concepts that will become a benefit in money or kind, the most common concepts related to an event income are:
Conference program (congress, convention) - amount paid by the attendees to attend conferences.
Special events or activations - amount paid by the sponsoring companies for on the show activations.
Trade show floor - amount derived from the sale of booths at a trade show.
Box Office - amount obtained from ticket sales.
Sponsorships - amount paid by companies that invest an amount of money to promote their brand or product within our event.
Exchanges - is the value of the products or benefits exchanged with any brand or supplier.
Financial gains - are those gains derived from the financial returns obtained from the investment of income. An event generally receives income before it takes place, in some cases these incomes are attractive enough to be invested in some financial instrument such as promissory notes or investment funds and thus produce an additional profit.
Exchange rate gains - Some events receive the registration fees or the payment of booths in a different currency than the one used locally.
There are two frequently used options, fix the exchange rate of the currency for the clients to pay us, or use the exchange rate of the day they paid us, when making the accounting closing of the event we will know if the exchange rate affected us during the time we were receiving these payments and if we were able to obtain an economic benefit, derived from the fluctuation of our currency against the other.
Expenses
Fixed expenses of the event are those that do not vary in relation to the number of attendees, for example, audiovisual equipment, venue costs, promotion, and advertising, etc.
Variable expenses are those which do depend on the number of attendees: meals, folders, giveaways and the working material for the congress or convention etc.
In a product presentation cocktail, it corresponds to the quantity of canapes and drinks requested. In the case of a trade show, variable expenses will correspond, for example, to the number of booths to be produced, the greater the number of boots, the greater the expense on equipment, but it also means a higher income from booth sales.
A very important part of the budget is the one related to the supplier's payments, my recommendation is to develop a directory of suppliers by selecting two or three for each category based on the quality of their service.
The main expenses related to suppliers are:
Audio and video
Promotion and hostess agencies
Banquets (catering)
Decoration
Design and booth construction
Musical groups
Lighting
Translation services
Transportation or land operator
Communication technologies
As we mentioned earlier, make sure you have contact with two or three companies in each of these categories and work to forge a win-win relationship with each of them.
Since we have calculated the variable expenses and the fixed expenses together, we will have the total expenses, this umber is used to calculate the cost per conventioneer or participant.
Do not forget to include bank charges for credit card payments or bank transfers, and of course, do not forget to consider 5% more for unforeseen expenses.
Remember that, if you are very clear about your expenses, you will have the possibility to better calculate the costs of your services and products, but above all you will have certainty about the correct sale price for your event.
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