Use our online event budget calculator and event budget download template to ensure you keep your finances on track. Your event finances are critical to the success of your event. From the basics, right through to pro tips, we have you covered.
We are sure you will agree that creating a comprehensive event budget is one of the most important things you can do for your event. After all, it keeps your expenditures on track.
But it’s also one of the trickiest. Leave something out and you’ve sabotaged your efforts.
Event budgets can be the stuff that nightmares are made of and one of the things that keeps event planners awake at night.
But – it doesn’t have to be like that!
We are here to help you become an event budget pro, EVEN IF you hated math in school and would rather bungee jump than budget.
The best part is that we will share with you a speedy online event budget calculator tool that will calculate your total estimated event expenditure. Just enter your figures to see your current financial position and profit or loss and then grab and save a copy of it for your reference.
If you already worked out a strategy you can check it out here. If you need help with creating your budget keep reading:
Part 1: The Basics – What is an Event Budget and Why it is so Important to the Success of Your Event?
We are about to refresh some of the event budget basics, right through to advanced pro tips.
Part 1: The Basics – What is an Event Budget and Why it is so Important to the Success of Your Event?
The event budget shows the financial position of an event. The actual or projected income and expenditure is detailed within a defined structure.
We can never stress it enough; a sound budget (most of the time) ensures a successful event. The importance of event budgeting must never be underestimated. So why is the event budget such a critical element to get right?
A structured budget is essential because it:
Helps in monitoring costs and understanding what you can (and can’t) afford.
Keeps spending decisions under control and focused on priorities, so better economic decisions can be made.
Helps to identify where savings can be made if you need to cut back. And the expenditure areas where you cannot meddle.
Determines whether an event is feasible and how great the risks or likely profits are.
Defines measurable and achievable objectives and targets for your event to keep you on the right path from the start.
Flags warnings if you don’t hit income targets or are over budget compared to projected expenditure.
Can demonstrate the return generated from the event.
Is crucial when reporting to management.
Of course, many event planners understand the importance of budgeting in event management but this can be the very reason that some event planners feel overwhelmed by it.
Rest assured – if you read this post, there’s no need for event budgets to be a scary or prohibitive task.
Research: Budget Concerns Remain Paramount for Eventprofs
In January 2018 we conducted one of the largest pieces of event planning research ever completed. With 2,400 contacts and over 1,000 respondents.
We asked specific questions that pertain to event budgets. We are happy to release the results.
If you would like a copy of this research for publishing you can request it here: State of the Event Industry Research 2018.
Budgets May Rise (a Little)
Most event planners believe that event marketing budgets will remain the same in 2018. 21% are confident that budgets will rise.
Event Marketing Budgets Look Hopeful
Although a majority (65%) feel that marketing budgets will remain the same, there is a slight bias in the majority towards increasing budgets.
Budget Remains the Biggest Challenge
The vast majority of event professionals signal budget constraints as the single biggest hurdle for 2018. Rising expectations force planners to be innovative. Attendee numbers are also among the most impactful challenges with increased competition being one of the reasons.
Shrinking Budgets Are Still a Worry For Eventprofs
Over half of those surveyed said that shrinking budgets were a concern. Although the overall feeling towards budgets is optimistic, there is still a shadow of doubt in several eventprofs’ minds.
Staying Within Budget is Key to Event Success
Many factors make up the data used to determine the success of an event. A majority (60%) of event professionals feel that staying within budget is key to measuring success. Almost half (47%) also stated that profit was a factor. Almost a third (32%) indicated that sponsorship revenue was a factor.
Staying Within Budget is an Important Factor in Calculating ROI
Over half of those surveyed said that they used budget as an ROI measurement. Almost as many (52%) said they measured ROI with profit and around a third (34%) used sponsorship revenue.
Budget is a Top Priority For Corporate Event Planners
81% of corporate event planners surveyed said that budgets were a top priority for the coming year with a majority (54%) also stating ROI as a priority.
Cut The Confusion: The Essential Glossary of Budget Terminology
Before we get down to the tactics to smash your event budget, we need to ensure we understand the important terms that are critical to truly understanding your event finances. Budgeting is a whole different world with its very own language, which is what can make it so baffling. In order to be understood, particularly when reporting back to your management team, you’ll want to be sure of your use of the following vocab.
And once you understand the jargon you can set about calculating these figures to properly understand your real financial position.
Break-even Point
This is the point in the budget where total expenses and total revenue are equal. The event is not losing money or making it at this point. They’ve covered their expenses.
Cash Flow
The total amount of money being transferred in and out of the event when taking into account revenue and payouts.
In the Black
The goal behind budgeting, this term refers to an event that makes more than it costs to host.
In the Red
This is the opposite of “in the black” and means that the event is costing more than it’s making.
Gross Budget
This is the total revenue the event is expected to bring in before expenses are deducted. It can also be used as a tally of expenses. That is referred to as the gross expenditures.
Net Budget
The net budget is what is made after all expenditures are paid out. This is a true reflection of the profitability of the event.
Fixed Costs
These are often referred to as overhead costs and they are not dependent on things like headcount. If you have a flat rental fee for the venue that is not dependent on the number of guests you have, that’s a fixed cost. Other fixed costs include AV equipment, office space, and room set-up fees.
Variable Costs
Variable costs are costs that fluctuate (usually by headcount). Food and beverage is likely a variable cost, as are printing costs. A tally of your fixed costs and your variable costs will yield your total event costs.
Contribution Margin
The contribution margin is the amount that will be contributed towards the fixed costs after the variable costs have been satisfied.
Profit Margin
The profit margin measures the total amount by which revenue from event ticket sales, sponsorships, exhibitor sales and so forth, exceeds the costs.
Now we have covered some of the basics, let’s get onto the more advanced guidance.
This excerpt about the event management and its budget is taken from Event Manager Blog