Event Budgeting

Questions I’ll be answering #

1. What is budgeting?
2. Why is it important?
3. When is it done?
4. What should be included, and how to go about it?
   • Income
   • Expenses

1. What is budgeting? #

Budgeting is the process of creating a plan to spend money. Budgeting for an even is the process of creating a plan for all projected expenses related to an event, thereby allowing the event financer to allocate funding for it.

An event budget is, therefore, a projection (forecast) of the income and expenditure that the event will incur based on plans made and information gathered.

2. Why is it important? #

Keeping an event budget will help you stay organized and prepared for any client inquiry - and help you avoid going over budget.

In the initial planning phase, the development of a budget helps to establish whether the event will be viable, It’ll give an idea whether total revenues will cover total costs.

3. When is it done? #

The budgeting process starts immediately when planning an event. As soon as the idea is conceived, it’s time to plan.

Budgeting is a continuous process. The budget begins barebones with what little information is available, and it will be constantly refined as more information is sought, to ensure that no surprises come later on.

4. What should be included and how to go about it? #

An event budget basically includes the various income and expense predictions, and the actual income and expense (this will come after the event).

A simple spreadsheet can do the job.

Income Sources #

The income is the money that will be used to fund the event. If you’ve already been given a budget, you could use certain income sources to increase it (and therefore have more money to spend on better arrangements).

If the event is simple, and a budget is set to be decided on later, you can proceed directly to making an expenses chart.

Typical sources of event income are:

• Money paid by event participants (e.g. registration fees)
• Money paid by event spectators (e.g. entry fees, food/drink sales)
• Government Funding
• Sponsorship
• Money paid by a parent organization (e.g. state association)

Expenses #

Once you have a good figure on the income, you can proceed to make an expenses chart. This will be bulk of the budget.

1. Make a table.
   Make a table with the following 4 columns as headings:

   • Item
   • Projected Expense
   • Actual Expense
   • Details

2. Categorize expenses.
   Next, list all expenses, and categorize them in to groups. Starting with the next step, we’ll enter each category and its expenses into the table. In order to get cost figures, you can call suppliers / agents and get quotations based on your intended guest figures, etc.

3. Track site rental costs.
   As you plan the event itself and as you meet with your venue sales manager, track all projected rental fees for the event and function space, housekeeping, baggage handling and related expenses.

4. Estimate catering costs.
   This includes all food and beverage charges, including tips and gratuities – which can account for up to 30%.

5. Document transportation charges.
   This includes shuttles, coaches, event transfers and any related expenses.

6. Add décor expenses.
   Most events include expenses for décor, such as centerpieces, florals, tent rentals, etc. This is where you list those costs.

7. Document entertainment & equipment fees.
   Common expenses in this category include the A/V equipment, but it’s also a good spot to list honorariums to speakers or if you are hiring entertainers.

8. Summarize printing charges.
   Several small item charges actually combine to make a larger expense line item. These include invitations, name badges, program booklets, event signage, and banners.

9. Line item for gifts.
   One common event tip is to never allow a guest to leave empty handed. So, whatever gift or gifts you provide, track the cost for them separately; you’d be amazed at how much these items can cost.

10. Identify activities expenses.
    If your event includes activities such as golfing, tennis, spa, rafting, biking, or other activities, you will want to note the cost of these fees separately. Consider summarizing the total cost in your spreadsheet and attaching a breakdown.

11. Post other expenses.
    If an expense doesn’t fall into any of the above categories, list them as a miscellaneous expense item here.

12. Give yourself a contingency fund category.
    Depending on the size or complexity of an event, you may want to give yourself as much as up to 20% of the event budget here. Despite the best planning, charges are going to exceed projected plans with expenses that you never consider. This will keep you from going over budget every time.

13. Summarize projected expenses.
    As you build your event program, you will have a good projection of the total expenses. This is the information that you will share with the event client to make sure they are aware of the event budget so that there aren’t any surprises later on.

14. Summarize actual expenses.
    This happens after the event has concluded. Subtotal the invoices into the above 10 categories and document the actual budget. If extremely favorable,  identify savings in actual budget vs. the projected budget, demonstrating the value you brought to the role.

A sample budget with only the first two categories can be found below. The bulk of the items are omitted for the sake of simplicity.