Establishing a budget is the process of identifying and anticipa-ting the expenses and income related to an event or meeting. Managing that budget means planning the way you spend money so that expenditures do not exceed the amount of money you have. The budget of each meeting or event will be different.
When developing a budget, you must estimate the number of attendees and the related revenues (if any) and expenses. If you have historical data from a similar event (known as incremental budgeting), you'll have a good idea of previous expenses. However, if this is a first-time event (known as zero-based budgeting), you'll need to identify all possible expenses.
ESTABLISHING AN INCOME/EXPENSE BUDGET
The key to developing an income and expense budget is to include every element that may be part of your event. It is better to maintain a complete list of budget items, even if you don't need all of them, than to overlook an item.
The budgetary goal of an event must be determined before any fees can be established or any money is spent.
Generally, events fall into three categories:
- Profit: Revenue budgeted is greater than event expenses
- Break-even: Total revenue equals total expenses
- Deficit: Expenses are greater than event revenue (most corporate events fall into this category)
Once you know what the financial goals are, you can begin to develop the budget through the following steps:
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Identify expenses:
Fixed: Expenses that remain constant and will not be affected by the number of attendees, such as venue rental fee, lighting or audiovisual equipment
Variable: Expenses that are calculated on a per-person basis, such as food and beverage
Indirect: Overhead or administrative costs, such as staff salaries
Miscellaneous: Unpredictable charges/expenses, such as overnight printing or shipping
- Identify potential revenue sources, along with how much revenue is necessary
- Establish registration, exhibit and/or any other fees if appropriate
The following budget categories provide a guide to help you to organize your revenue and expenses. Take each category and list all the expenses, fixed and variable, for each. Categories include program content, marketing and promotion, food and beverage, speakers, entertainment, travel, transportation and shuttle bus, accommodations, meeting facility, audiovisual, labor charges, administrative, staff, exhibition, shipping/freight charges, postage, insurance, flowers and decor, special function expenses, miscellaneous services (such as translation and interpretation), and revenue details (registration fees, exhibitor's fees, etc.)
It is important that you keep a close eye on your event budget so you can track its accuracy. Attempt to stay within the budget as much as possible, but realize that most of the time, your budget will be set too low. And just because you have made a projected budget doesn't mean it is set in stone.
Name: Marie R. Schlump, CSEP, CMP
Company: Prudential Annuities
Address: 1 Corporate Drive Shelton, CT 06484 USA
Phone: 203/925-3747
Fax: 203/402-1475
