6 Tips for Budgeting Your Event

Your organization is planning an event, and all necessary components are being mapped out. Now comes the part that many event managers dread: the costs of the ideas and setting up a budget. Because there is a long list of items to be paid for, it is sometimes impossible to see the forest for the trees. In this blog, we share 6 tips for event budgeting.

1. Work from your event strategy

The phrase event strategy says it all: you have certain goals, visions, and wishes for your event. By looking at this critically, you can determine which parts of this event might be worth slightly higher costs. Is the goal to organize a small drinks reception including a buffet? Then the costs will turn out significantly lower than organizing a conference within your industry. In this phase, you can consult with others about what you expect the costs to be and what the maximum budget is. Agreeing on a maximum amount is not, however, an immediate reason to spend this entire amount. Keep in mind that establishing KPIs is a useful addition to your event strategy. That way, you can allocate an amount per KPI.

2. Learn from the past

Is it the first time such an event is being organized? If it is a recurring event, there is an opportunity to view and evaluate the costs of past events. Perhaps too much money was spent on catering or technology at the time, which was not in line with the goals of the event. Or were promotional costs not sufficiently taken into account? Whatever the case, this data is crucial to determine which parts require a different form of financing. In this case, it is wise to keep in mind that costs can change over the years; with the current tightness in the market and rising inflation of raw materials, prices in 2022 are very different from those in 2019. And perhaps your new event will attract more visitors than in the past.

3. Determine financial priorities

Now that the main goals have been established, combined with lessons from past events, it is time to set up financial priorities. It is wise to start with a blank document and then categorize. You can do this, for example, by assigning numbers from high to low based on underlying importance. Is promotion the most important? Then it gets assigned a '1'. Does the event take place in the evening and do you want to make a great impression by serving a Michelin-starred meal? Then you might consider placing this cost item above promotion, and so on.

4. Compare suppliers with each other

The more quotes you receive for the necessary parts of the event, the better you can make a solid assessment of what you actually need and how much this should cost. Also, by collecting these quotes, you can establish an average amount that will make it easier to estimate costs for future events. Moreover, suppliers can also be a connecting point for your organization; there is a good chance they have worked for event planning organizations in the past and therefore know parties that can help you quickly and effectively. Suppliers who have mutual partnerships can offer combined discounts.

5. How do revenues compare to expenditures?

Depending on the ultimate goal of your event, you can make a certain expectation regarding the revenue generated from it. If you organize an event with the goal of gathering sales leads, the future outlook regarding potential revenue is structured differently than if you organize a career event. It could also be that you are looking for partners to collaborate with in business operations. You can then estimate the income based on cost reduction regarding the products or services your company provides. Whatever the case: there is always a specific goal for an event, and you can estimate its revenue in a creative way. Once you have succeeded in doing this, you must weigh this against the estimated costs. This will give your budget more weight and direction.

6. Take unforeseen expenses into account

It regularly happens that a budget is set up for an event, only for costs to skyrocket at the last minute due to unforeseen circumstances. This basically makes all the work originally put into the budget redundant, given the fact that it was ultimately still exceeded. This can happen for various reasons, such as a florist who cannot deliver last minute, while these flowers are an essential part of the decoration. Or a renowned speaker who cancels at the last minute, requiring someone to be brought in ad hoc. As mentioned earlier, a budget is not necessarily the exact amount that must be spent, but rather a maximum benchmark by which to measure. A good rule of thumb is to add 30% to the total budget amount for unforeseen circumstances.

Curious about what we can do for you and the associated costs? Download our brochure here or feel free to contact us at 020-67055055 or events@theateramsterdam.nl