Money Talks: Defining an Event Budget

Imagine purchasing tickets to a highly-anticipated event promising exclusive talks with podcast celebrities and a panel with the actors from Supernatural and Harry Potter. Now, imagine showing up to the event, hearing that most speakers backed out after not getting paid, and then being asked to help cover the costs of the event’s outstanding hotel bill of $17,000. 

It sounds like a nightmare, but that was the reality for DashCon 2014, an event where attendees paid witness to one of the most important lessons in event planning – don’t bust the budget. 

This lesson has become increasingly difficult as things get more expensive. According to a recent Maritz Industry Trends Report, most meeting expenses are up over 20 percent since before the pandemic. But, most budgets haven’t budged. Instead, event planners are living within the constraints and are more reliant on proper planning and financial forecasting to ensure the success of their events.

Why event budgets are important

A budget serves as a financial blueprint for a successful event, aligning expenses with desired outcomes and ensuring financial viability.

A clearly defined budget provides a framework for decision-making, enabling event organizers to strategically allocate resources. By delineating expenses across various categories such as venue, marketing, and entertainment, budgets help prioritize spending for maximum impact. This foresight prevents overspending and optimizes funds in areas that help organizers reach their goals.

Event budgets also act as a risk management tool. By estimating costs and revenue streams beforehand, budgets help identify possible financial gaps. This enables organizers to devise backup plans, forge partnerships, and negotiate favorable deals with vendors to ensure that the event stays on track throughout planning and execution.

The basics of event budgeting

Crafting an event budget demands meticulous planning, attention to detail, and adaptability. To create a robust budget that meets financial constraints and aligns with the event’s goals, start with the basics:

When event organizers have a solid understanding of the basics, they’ll know if it is possible for the event to happen or not. 

Event budgeting

Nine steps to crafting a comprehensive event budget

1. Start Early

Organizing a financial game plan early on puts power in the hands of the event organizer and alleviates stress throughout planning. An early start means more time to shop around for bargains, establish partnerships and negotiate with vendors. Whereas, starting too late can mean less options and premium rates.

2. Create a Spreadsheet

Event organizers must stay organized. Creating a spreadsheet or utilizing relevant event software will help categorize and itemize costs, estimate expenses and revenue, and track spending.

Tools like Google Sheets or Microsoft Excel offer budgeting templates with formulas that make calculating expenses against income easy. When modifying or building a spreadsheet, event organizers should include categories such as:

3. Prioritize Expenses

Some items, such as venue, catering and entertainment are sure to come with a higher price tag. So, it’s important event organizers have a firm grip on what will give them the most bang for their buck, or the biggest return on their investment. This is where understanding event objectives and overarching goals plays a pivotal role.

“We don’t have the luxury of doing anything and everything that we want anymore because of the state of the economy and the state of the industry right now. So you have to be even more strategic about where you put those dollars and what you do with them to make the most impact,” Jitter Garcia, vp-event marketing and brand experiences at TelevisaUnivision, told Event Marketer.

4. Research and Negotiate with Vendors

A request for proposal (RFP) is an important document used to communicate needs and expectations to vendors in order to receive a quote for the services provided. Creating one requires a good understanding of the event’s requirements and goals.

As quotes are collected, event organizers should track them within their budgeting spreadsheet to easily view and compare prices. This provides a general understanding of the competitive cost for services provided and gives organizers negotiating power when following up with top vendor choices. For example, if a preferred vendor comes in at a higher cost but is available for multiple events throughout the year, the organizer may negotiate bulk pricing or long-term contract for a lower rate.

5. Consider How to Cut Costs

Beyond using competitive knowledge and relationships to negotiate with vendors, event organizers should consider other ways to reduce spending. This may include keeping event planning and management in-house – unless it interferes with other organization priorities.

“In-house teams bring a level of efficiency and cost-effectiveness that is hard to match. They can streamline processes, negotiate better with vendors, and leverage existing relationships. Their continuity and familiarity with their brand lead to better planning, execution, and crisis management,” Chaviva Gordon-Bennett writes in an article for Bizzabo.

To further reduce spending, organizers can leverage free social media and email marketing tools, as well as utilize the power of word-of-mouth from partners or loyal audiences. If hosting multiple events, spending can also be limited by digitizing signage or handouts or choosing evergreen banners or swag that excludes dates or specific event information.

6. Identify Sponsors and Partners

Sponsors and partners play a major role in event production. With funding and support from outside organizations, event organizers are able to save money on event production, attract new audiences and realize important or elevated aspects of their event.

However, this requires careful research and conversations. Attracting these types of partnerships requires an understanding of the marketing value of the event, as well as the values in which the organization or event may align with the prospective partner.

7. Charge for Value-Adds

Outside of ticket revenue and sponsorship dollars, event organizers can create many other avenues to generate revenue at their events. Consider:

8. Track Expenses and Revenue

The budget spreadsheet is not just a tool used for initial planning. Instead, event organizers should reference it throughout the planning process, updating actual expenses and incoming revenue as it occurs to ensure their event is on track. Keeping a pulse on the budget allows organizers to make adjustments accordingly. For example, if revenue from ticket sales seems low, an event organizer may choose to run a limited-time promotion to boost sales and generate more buzz.

Did you know? With Ticketbud, event organizers can access ticket funds early to cover early event costs. Learn more at ticketbud.com.

9. Report on Performance

Any person or organization that invested time or money into producing an event will be curious about its overall success. Event organizers can utilize the data tracked in their spreadsheet to produce performance reports related to the event, its budget, and any revenue or marketing value gained.

Demonstrating ROI is of the utmost importance of maintaining stakeholder trust and ensuring an event can be reproduced in the future. 

Keys to effective event budgeting

“To get the best value from long-awaited meetings and events and mitigate against rising costs, corporations will need to plan further in advance, budget carefully, and adopt a disciplined approach to managing meetings and events across the organization,”

– Beau Ballin, global head market development, CWT Meetings & Events, told skift meetings.

Events are only getting more expensive. Dedicating time to formulate a well-thought-out budget in the early stages of the planning will avoid problems from planning through production. 

Event Budgeting for the Budget Adverse

Planning an upcoming event is overwhelming and exhausting. There are so many moving parts to keep track of and the worst thing that could happen is that the entire event flops and no one comes and your entire career as you know it collapses in on itself like a black hole. [caption id="" align="aligncenter" width="500"] That center section? Yeah that would be your career as you know it. (credit: Fox)[/caption] So. There is that.  We don’t know astrophysics and we can’t do anything about being crumpled into oblivion by a black hole, but we do know events. So in a way, we’re almost defenders of the galaxy. A galaxy of events. You’re welcome. As a ticketing company, we also know how the event budget can get overwhelming. No wait, come back! Don’t leave yet! I know the B-word is scary, it is to me too, but let’s be honest, we all know we have to deal with budgeting when getting an event off the ground. If we didn’t we’d all probably have $2,000 Swedish floral centerpieces on each table and gold dipped silverware. At least I would. And then we’re back at careers crumbling in on themselves. So to stop an intergalactic incident, we consulted event planners, event textbooks and some event infographics to put together this handy post to make figuring out your next event budget easier and to keep you from losing your mind and our galaxy not spiralled into a black hole.   First things firstNeed a place to be. [caption id="" align="aligncenter" width="436"] Pro tip: Don’t have your event on Jakku. (Credit: Disney)[/caption] You probably already know what the most important thing for your event is as you’ve been agonizing over it for some time now. If you don’t know what the key part for your event, you’ve got some catching up to do. We’ll give you a moment to think about it. Good? Okay. For most people, the main part to the event is the where; where is the event going to take place? And the answer will be [insert name of venue location here]. So naturally, the first thing you should have on your budget and the thing you should make sure your money goes towards is venue. It should be noted that just because something is first or most important doesn’t mean it is the most expensive. To have an event you need a location and venue, but this is does not mean it will be the largest expense on your budget sheet. Event planners suggest that a venue rental should account for 15% of your budget. Your venue could be a reception hall, a hotel ballroom, a backroom in a hipster bar or outside on some winery’s gorgeous rolling hills. No matter where it is, you’re probably going to have to pay something to be able to use it. If you already know exactly where you’re going to hold your event, great, skip on down, otherwise we have some more thinking to do. There are three main things you need to think about before you go looking for a place:

  1. How many people does it need to hold?
  2. Does it need high tech hook ups?
  3. Do you need/want liquor sales?
Once you know the answers to those we can move on to the really important part here: how much money do you have to spend on an event space? You can look up different venues and call for quotes and make a spreadsheet and go from there or you can use an awesome platform like EventUp which lists venues by city and need. Putting in Austin, TX pulls up a variety of different places and price points, but on average, most venues ran around $1,500 for Monday through Thursday with a premium being spent on Friday and Saturday nights where you could spend closer to $5,000. Clearly, it is much better for your budget if you decide to go with an event in the middle of the week during the day. Some venue rentals come with amenities included like: Which is awesome. If you can get a venue with many of these added in then that cuts down on your expenses elsewhere. It also makes it much easier on you and not having to figure out how you’re going to take care of everything. But we like to live dangerously, so let’s pretend that the venue you’re using doesn’t really have these set aside for your use, then you’ll need to make room for them in the budget elsewhere. But we’ll get to that in a minute.   Next part of the budget. Food. [caption id="" align="aligncenter" width="434"] How most of us feel regarding food, lets be honest. (Credit: Buzzfeed)[/caption]   What is an event without a food? Not an event I’m at. I know I’m not the only one who feels this way (admit, you do too), so expect that catering and food should come to around 20% of your budget (though you should plan for more if you are looking to also have liquor sales). Finding the right food type is its only difficulty, thankfully one we don’t actually have here in Austin (Morning? Breakfast tacos. Any other time? BBQ. Done.) but finding the food and caterer is only part of the expense. Make sure that your budget also leaves room for:   Now for the fun one. Entertainment! [caption id="attachment_23546" align="aligncenter" width="400"] Hit button, get party. (Credit: NBC)[/caption] Entertainment is going to be a big part of your budget. You’ve got a place to put people and you’ve fed them and given them a nice libation, but you need a reason for them to be there, other than the free food. For many corporate events this can be a no-brainer. If you’re hosting a symposium on stopping event-related black holes, you’ll likely have a rather knowledgeable speaker or two there to give a lecture (happy to talk, contact my people). Or maybe it is a bit more of relaxed and fun event, with music and a band. Either way the entertainment is going to cost and depending on how specialized you want it, it will end up costing more. You may not have all of these items but you should keep them in mind. They all fall under your entertainment section. Because of the high price of some of these, expect your entertainment budget to run about 25% of your total budget.   Rentals, because buying all of that is unnecessary. [caption id="" align="aligncenter" width="395"] Rent all the swag you can! (Credit: NBC)[/caption] Rentals are a necessity, especially if your chosen venue doesn’t have a lot of them on hand already. Hopefully they will at least have a few of these on hand which will cut down on this expense but if they don’t, your rentals can range from the high-tech: To the low-tech: Hopefully your venue is helping out with silverware and tables and chairs. If not you may want to talk to them about how they’re kind of a crappy venue. Depending on how and what you need to rent, your rental budget will probably run you 10-12% of your full budget with the higher end being necessary if you are renting everything. It is possible to have a smaller rental budget if your venue has all inclusive packaging, so it may be more beneficial for you to have a smaller rental budget and a slighter higher venue budget, all depends on what works the best.    Make sure to have everything look pretty! [caption id="" align="aligncenter" width="381"] Perhaps don’t go with this theme. Maybe. (Credit: Disney)[/caption] Don’t forget, you want the place to look nice! You may have the best DJ and the tastiest catering but the event will look blah with normal house lights and the generic scuffed up tables and Boringly Beige walls. Make sure to add another 10% to decor to spiff the place up with:  Keep in mind that some of your decorations can go under your rental budget (lights, presentation screens, etc.). No one wants to have to buy a crazy amount of theatre can lights when you can just rent them after all, so there is a bit of movement between these two sections as well.   Everything else and the kitchen sink.  Then there are the expenses that don’t fit in anywhere else but you still need to account for them. The random detritus that accumulates somewhere whenever you plan an event. It is the final 8-10% of your budget and will likely include any: There could be any number of things that fall in under the misc tab. If it doesn’t fit in anywhere else, it could go here. Be careful though, you don’t want this to go higher than 10% of your budget! If this category starts to get out of hand, be sure to step back and look at what you have in here. Likely it could go somewhere else (or it may not be really necessary).  The nice thing here, your tickets will totally be free because you’re using Ticketbud and you won’t need to pay for anything extra to scan tickets at the door. So, that’s a relief.   Break it all down.  [caption id="attachment_23543" align="alignright" width="379"] Entertainment and food will take a good portion of the budget. Everyone loves good tunes and good food and they make or break your event.[/caption] This breakdown of your budget is a rough estimate. As mentioned previously, every event is going to be slightly different. Some events you may want to splash out more on rentals and electronics and in others you may need more for food or entertainment (or perhaps your venue has a lot of built ins and they save you a lot of money, who knows we can always dream). These are good parameters to start with when it otherwise feels overwhelming to start your budget. No matter how much money you are working with, your average percentages will be very close. Don’t let your next event budget overwhelm you, keep to this breakdown and you’ll keep everything from spiralling out of control.      ]]]]> ]]>