This is the most important aspect of planning an event. It involves ensuring that the Event Directors will be able to predict with rational accuracy whether the event will result to a profit, loss or break-even. With the current state of the global economic crisis, event managers are increasingly being pressured to deliver high-quality events with thinner budgets. This article presents the fundamentals of effective financial planning for event managers.
Budget
There are 2 fundamentals of event budgeting, which includes income and expenditure.
Income
Sources of income fall into 2 basic categories:
- Earned income: Participant fees, spectator’s fees, Merchandising, catering, etc.
- Unearned income: Government grants, Donations from private individuals or companies, etc.
Expenditure
Each item of expenditure should be listed for your project, and sorting them into categories under headings would help. Example:
- Overheads
- Administration costs
- Office rentals
- Telephone Bills
- Venue Costs
- Room Rental
- Security Deposit
- Insurance Coverage
- Parking
Food & catering
- Meals
- Beverages
- Bartender/Server Labor Fees
Keeping within planned budgetary expenses is often a challenge for event organizers. It is important that initial discussion stage is thorough and allows for unseen circumstances and expenses. It is always essential to begin designing an event around the total number of resources available and not vice versa.
Financial Support
Acquiring sufficient funding for your event may be necessary as it is a possibility that ticket sales will not cover your costs. Seek alternate sources of finance. Depending on the nature of the event, there are numerous funding avenues to explore. They fall into the categories of:
- Public (Federal, State or Local Government)
- Private enterprises
- Philanthropy (Donations)
- Individuals
Please note that with such a significant annual calendar of events, the demand on corporate citizens and government groups for support is high. Prominent local businesses and major companies are regularly targeted for financial support by event organizers and it’s important to think carefully about which to approach.
Insurance
It is often the case that insurance is highly recommended or even mandatory to ensure the safety of staff and equipment. To help with this, it is suggested that event managers should seek legal advice to determine liability and extent of coverage.