The All Inclusive Guide To Perfecting Your Event Budget

As an event management professional, you need to take a ‘master of all trades’ approach to your job. You’ve got to be creative, artistic, and passionate in order to transform your clients ideas from conceptual to concrete; at the same time, you need to be analytical, logical, and disciplined in order to lay the groundwork to bring your events to life. One of the first steps in laying that groundwork – and consequently, one of the greatest challenges in event management – is budgeting.

Though we’ve touched a bit on event budgeting in the past, this piece is going to be much more comprehensive. We’re going to talk this through right down to the smallest detail, going from the initial planning stages straight through to finalization. By the time you’re done reading, you’ll know everything you need to in order to put together an event budget that’s workable, realistic, and – most importantly – capable of providing your clients with exactly the event they’re looking to run.

First, Talk Things Over With Your Client

While your chief responsibility as an event planner is to actually run a client’s event, that isn’t the only thing you need to concern yourself. In the initial talks with your client, you’re going to need to take on the role of financial advisor, as well.  Figure out exactly how much money they’re willing to spend, and be sure to keep them grounded if they start coming to you with unrealistic requests – you need to make sure that the budget they’ve provided you aligns perfectly with their expectations, or you’re going to be dealing with significant trouble down the road.

Of course, you first need to understand precisely what their expectations are.

To that end, event management professional Geoff Beers has compiled a list of questions you need to ask your client before moving forward with any event. For completion’s sake, I’ve included a few additional questions drawn from the attendly blog.

What’s Your Projected Date And Location?

According to Beers, this is a question you should put forward right out the door. Most clients will have a general idea of when they want an event to be run, and they’ll also have at least a few possible venues in mind. Though he notes that you’ll probably have to offer at least a little assistance where location’s concerned, he also warns that indecision or conflict in response to this question can be a bad sign – an indication that your client really has no idea what they want out of your event.

That, in turn, means it’ll prove nearly impossible for you to reliably put together a budget.

What Do You Want This Event To Achieve?

Although most clients have a general idea of what they want their event to achieve – a better database of leads for email marketing, new business partners, a better reputation for their brand; it’s still important that you establish this up front with the client. The end goal of an event will dictate how the event feels and operates. More importantly, it can have some impact on the budget; a charity event designed to raise awareness for a cause will be budgeted very differently from a corporate trade show.

What Type Of Admission Will be Used?

Your next step is to hammer out what type of admission your client wants their event to use. It is, after all, your job to manage ticketing and sales. Plus, you can use this as a springboard to start directly discussing the event’s budget – a ticketed event will contribute significantly more to the budget than a free event.

How Much Are You Willing To Spend, At Most?

This one’s sort of self-explanatory. As soon as possible, you need to work out with the client their maximum budget for a particular event. While this may change over time – budgets tend to be fluid; we’ll discuss that in greater depth later in the piece – knowing how much you’ve got to work with will influence the choices and expenditures you make during the planning process. Be sure to leave some extra money for emergencies, they are bound to come up no matter how prepared you are. 

What’s The Expected Attendance?

Next up, you need to find out how many people the client wants to see at their event – get as exact a number as possible here.

“The difference in cost between 200 and 500 attendees is massive,” writes Beers. “If a prospective client gives you a wide-ranging count, then they likely have not done any research on costs. In this case, you’ll want to immediately proceed with the next question on the list.”

What Is Your Budget Per Person?

According to Beers, it’s not enough to simply have a few numbers on paper as far as a budget’s concerned. You need to break it down into a per-person rate, either by asking the client to provide it or by calculating it out yourself. As an aside, this also serves as another means of seeing how much thought your client’s put into their event. 

“Whatever number your client uses to represent their budget, you should break it down into a per-person rate so that both of you can see what you really have to work with.” 

What Are Three Things You NEED To Have At Your Event?

With the cost-per-guest established, you next need to ask your client about what they absolutely have to have at their event – stuff which, if it ends up cut, will ruin the experience for them.  Do they want a particular guest speaker to present, or a particular type of catering service? Beers stresses that you cannot rely on the client to mention these factors – they need to be on the table in the beginning.

What Are Three Things You Don’t Want At Your Event?

Although this may seem like something of a strange question to ask, Beers raises a good point as to why you should ask it.

“Adding the negative connotation can add significant insight for the planner,” he explains. “Say, for example, that the client is adamantly against serving chicken for dinner. A repercussion would be an increase in food costs. Without chicken as an option, you will need to consider beef or fish, both of which are typically more expensive.”

“Understanding how a “no-no list” affects the big picture is a critical skill in assessing client compatibility,” he adds.

Step Two: Choose The Right Tool To Manage Your Budget (And Event)

Just as having an event management platform can help you better coordinate your team and plan out your venue, having a budgeting tool of some kind will help you keep a closer eye on the numbers and avoid what could amount to costly financial mistakes. Now, at this point, it’s worth mentioning that there exist plenty of event management tools with budgeting software built in: etouches, for example, covers every single step of the event planning process, as does Function Tracker.

You can find a more complete list of some of the top event management software here, and budgeting software can be found here. Choose whichever tool (or combination of tools) you think will be the best fit for your firm. Alternatively, writes Viktorix’s Jeff Kear, you could forego event budgeting software altogether and simply utilize a well-maintained budget spreadsheet or worksheet.

Either way, once you’ve worked out how you want to track your budget, it’s time to move on to the real logistics – what you’re going to be spending money on (and where that money’s coming from). 

Step Three: Identify Your Income And Expenditures

Now that you’ve a general idea of how much money’s going to be flowing through your event, it’s time to get down to specifics. What items represent expenses, and where will the money come from to pay those expenses? Although not necessarily the most difficult step in the budgeting process, this can certainly be the most tedious – not surprisingly, it also requires you to have a complete concept of your event in mind.

Expenditures

Typically, writes Julius Solaris of The Event Manager Blog, you’ll be looking at the following factors when budgeting:

• Venue-related Fees: Venue rental costs, housekeeping, transportation to and from the venue, set design, stage rental, and decorations.
• Advertising and Promotion: Everything related to an event’s publicity – paid Facebook ads, billboards, newspaper ads, etc.
• Speakers/Performers: You’ll likely need to pay for travel/accommodations. You may also need to pay a nominal fee for them to appear at your event.
• Catering: Food and drink.
• Equipment: Everything from medical equipment to audiovisual gear to cattle gating to point of sale systems to tables and chairs. This is probably what you’re going to spend the most time hashing out, as it’s the most comprehensive item on the list.
• Team/Staff: Salaries for team members/partners (if you’ve professional staff), gear for volunteers, security-related costs, equipment setup/maintenance fees. You may also consider hiring a Destination Management Firm.
• Administration: Insurance, medical fees, et-cetera. You’ll need liability insurance for sure, as well as a liquor license in the event that you’re serving alcohol. Depending on what sort of event you’re running and how large, you may also need to apply to run a fundraiser, or hire a legal team. Look into applying for a license to run gambling if you want to host a raffle or other, similar activity.
• Stationary & Signage: Postage, brochures, supplementary materials, schedules, signage, event badges, business cards, etc.
• Event Planning Fees: You don’t work for free – be sure to check with your client that they’ve accounted for the cost of hiring you in their budget.

You can find a more comprehensive list here or here.

Avenues Of Income

While your primary means of financing the event will be through whatever money the client provides, it’s still important that you understand the possible categories from which event income can be drawn. It’s not all about tickets and registration, after all – you could very well run an event with help from one of the following types of revenue:

• Government Grants: Generally require a firm/event manager to demonstrate to a government that their event has a great deal of strategic or regional importance. Usually tied to not-for-profit events.
• Sponsorships: Depending on what your event covers, there may actually be a number of businesses willing to sponsor it in exchange for increased publicity/the opportunity to directly participate. Talk this over with your client first.
• Merchandising: Merchandise related to the brand/business hosting the event – at a trade show, for example, the organization responsible may have a booth of their own in the vendor’s hall.
• Raffles: Typical at fundraisers, guests can pay a nominal fee for the chance to win a product or service.

Step Four: Negotiate With Suppliers And Vendors

No matter what type of event you’re running, you’re going to need to talk to at least a few vendors or suppliers to ensure you’ve all the equipment necessary to run your event. It sort of goes without saying that this represents the most significant cost for any event’s budget – which means that you should do everything in your power to reduce your spending in this area. Don’t worry, I’m not talking about cutting corners or anything here. I’m talking about negotiation.

Think about it – as an event management professional, you spend a whole lot of time managing people, right? You’re probably a pretty skilled speaker. What that means is that, if you put your mind to it, you can also be a rather skillful negotiator, too.

What follows is a few tips for getting the most out of your negotiations, courtesy of Maintenance Assistant.

• Know what you want going in: Figure out exactly what you need from a vendor or supplier going in, and get straight to the point. If you have an extremely specific list of requirements that a vendor can’t meet to perfection, they’ll be far more willing to bend a bit to retain your business.
• Have at least three alternatives to each vendor: There’s an old tactic frequently used by car dealers – when someone’s about to walk away from a purchase, they make an offhanded reference to another family who wants to buy it. It’s the same basic idea here; your goal is to create a sense of competition. If you’ve a list of alternatives, you’ll be more willing to walk away if a deal goes in a direction you dislike…and most vendors will be a lot more willing to take action to keep you. This is also good if one of your vendors backs out at the last minute. 
• When someone gives you a good deal, remember it: This is more for your own purposes than anything else. Remember the best deals you’ve ever gotten – this could indicate how low a vendor or supplier is willing to go for you.
• Look to establish long-term relationships: Last, but certainly not least, know exactly how much money you want to spend on supplies both now and in the long run – and make it clear you’re interested in a business partnership rather than a once-off deal. Plenty of veteran event planners have a stable of vendors they regularly hire for their events. You should follow suit.

There are a few other common-sense rules here as well, of course. Don’t share your budget, always ask for the best price, and time your requests well – so that the vendor has plenty of time to provide you with what you need. 

Step Five: Cutting Down On Costs

Before we wrap things up, I’d like to offer a few tips on how you can reduce your spending outside of haggling. Plenty of event management professionals still spend a whole lot more of their budget than they need to, after all. Here are just a few ways you can stretch your budget out a bit:

• Use digital tools wherever you can. I’m talking about free video conferencing apps, email invites, online marketing…you get the idea.
• Don’t overspend on food. If you’re serving wine, for example, you don’t need to shell out for expensive brands. In most cases, you can just go with the house brand – most people won’t even notice.
• Get creative with your layouts. For keynote presentations, consider reducing the number of screens or repositioning some of the audio equipment. For dinners or banquets, you might think about changing how the tables are laid out, using long, communal tables instead of a series of smaller ones. 
• You do not need to spend a ton of cash on décor – simple, inexpensive linens and centerpieces can look awesome if arranged properly.  Again, get creative – that’s part of what you do as an event planner, right? ‘
• Where possible, run everything through a single supplier (but make sure you have a contingency plan in the event that they don’t or can’t follow through). This will give you a lot more bargaining power in negotiations.
• Self-publish your promotional material.

A Few Additional Tips

Designing the budget for an event is probably one of the toughest tasks facing an event planner – even one that knows what they’re doing. There are so many factors to consider, and even the smallest error can quickly snowball out of control. 

After all, you probably wouldn’t be an event manager if you didn’t like challenges.

Here are a few final tips to help you along:

• Always allow an extra 10-15% of ‘wiggle room’ in your budget for contingency funding.
• When ordering food, order 10% less than you think you need. A lot of event planners overspend on their food purchases.
• Stay realistic, and understand that your budget will change over time – you’ll need to revisit it at several points through the planning process.
• Only make changes to the budget if you and your client agreed to them in advance.
• Remember that if you overspend in one area, you’re going to need to underspend in another.
• Have clearly-established contracts for clients, vendors, and suppliers to sign before you agree to work with them. Document your fee structure, and anything else you deem relevant – I’d advise going over your contracts with a lawyer before finalizing them and presenting them.
• Always keep an eye out for discounts – sometimes you won’t need to negotiate with a supplier.