Event Planning

How To Create a Budget for Your Next Event

Eventtia Inc
August 3, 2022
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Planning an event, whether big or small, can be a complicated process. From venue renting to entertainment and refreshments to transport links everything needs to be carefully organized to ensure your event is a success. 

With so much to take into account, planning can easily become overwhelming and costs can start to stack up. But, by implementing an event budgeting process you can stay on top of your outgoings and make sure your function runs smoothly.

This article will cover all the basics you need to know about the financial side of successfully running an unforgettable event.

What is event budgeting?

Any event, big or small, requires a certain level of planning beforehand for things to run smoothly. Let’s say that you are planning a corporate event. First of all, you would look to find and book a venue of appropriate size. Then you would need to hire services such as catering and entertainment on the day. That is not to mention the budgeting process before everything that can take months of planning.

Expand this train of thought to a large-scale event attended by thousands of people. Just as you’d take the necessary steps regarding finance when establishing a new business, such as opening a business checking account, you should also take the necessary steps regarding finance when organizing a large-scale event. It’s one of the main reasons why event management exists as a profession. Event planners must think of all the amenities required by guests for a conference, convention, or show to run according to plan. That includes things like sanitation and sleeping arrangements if it runs across multiple days.

As guest lists reach the tens of thousands, for example, at the Consumer Electronics Show (CES), things can get quite difficult. You must consider the health and safety of your guests and comply with any relevant local laws or regulatory bodies.

Professional event planners will begin by creating budgets for their events. From there a realistic plan of the event’s itinerary may be constructed and executed. 

How can you work out an event’s budget?

A simplified way of looking at this question is to consider the concept of ‘balancing your books.’ That means, for every dollar you plan to spend on an event, you must work out where that money is coming from.

For example, let’s say an events company wants to run a festival for 15,000 attendees, with an expected cost of a ticket being $200. Anyone who has completed high-school math would tell you that the budget for that festival would be a maximum of $3 million, right?

Sadly, things are never quite that simple, and there are other factors that an event planner must contend with. Firstly, that $3 million is not actually in the event planner’s pocket at the planning stage; they must fund their capital expenditure from another source. This normally comes in the form of stakeholders who wish to see some ROI on their investment. So, you can wave goodbye to a figure of at least 10% (usually higher) of your event’s income from the get-go!

That is not to mention how you will be portioning each slice of your budget pie. For example, how much would the festival spend on venue hire, booking acts, staffing costs, marketing, etc?

This can be a complex task, but there are several ways to go about calculating it:

Doing it yourself manually

Give yourself enough time in front of an excel spreadsheet, and there’s nothing you cannot achieve! Unfortunately, this method of event budgeting is not only time-consuming, but it could be setting you up for bigger problems down the line.

Budgeting should be a collaborative process. You must talk to relevant industry players and enquire about quotes for the services you will require far in advance. Going into this process blind could put your measly excel spreadsheet in the red without enough prior care and knowledge.

Using a specialist software

A better option is to look at dedicated apps or software for event planning. These services act as a central hub for the collection of data. While app developers will use this data for MLOps model deployment, you can access it for insight into consumer demographics and retention.

These services can help with event management in collaborative teams, allowing people to work around the clock on the same project. They are also usually integrated into an event website and onsite check-in, allowing for a seamless customer experience.

One thing to note is that these software packages, such as virtual call center software, come with costs of their own. That means that the event management costs must be accounted for within the event’s budget itself! You will want to consider what sort of service your event requires so you don’t overspend at this stage.  

Delegating to a third-party event planner

Finally, you may consider the above 2 approaches far too daunting for your event’s needs. In that case, you might choose to hire a third-party agency to plan and budget on your behalf. Whilst this can be extremely helpful to event hosts with little prior knowledge, you should be asking some precautionary questions:

  • What experience does that event planner have?
  • Does their availability match yours?
  • How good are the reviews from their previous clients?
  • Do they offer personalization in customer service?

The costs involved with running an event

With hundreds of moving parts and factors, running an event is no easy task. You will find that beyond the basics of event planning, your budget will no doubt run into hidden costs down the road.

For this reason, we have compiled some of the most crucial factors to consider when it comes to creating a budget for your event:

Basic event costs

When it comes down to it, the most important expenses to factor into your event’s budget are the venue and hospitality. Without these, your event cannot even go ahead. Here is a basic list of what you will need to budget for:

Beyond these, you will need to factor in the costs of meeting your customers’ expectations. This entirely depends on the sort of event that you are running, but it may include:

  • Entertainment systems
  • Hiring guest speakers/performances
  • VIP experiences

Event management costs

As we have discussed already, there is a huge amount that goes on behind the scenes in event planning. Simply getting to the stage where you can begin event planning can be a costly endeavor. Here is what you need to account for:

  • Manager payroll
  • Event sign-in and registration (using electronic signatures)
  • Website and tech-related costs
  • Public and regulatory consultations

Marketing and promotion costs

It can be easy to miss the marketing phase out of your event’s budget, given how late it usually comes in the process. Depending on the event, marketing may be as simple as sending out invites to the guest list. On the other hand, for larger events like festivals, marketing will be ultimately responsible for the event’s financial viability. You will want to consider:

  • Graphic design for event signage and social media.
  • Paid adverts/marketing.
  • On-site merchandise and freebies.

To ease the costs of event marketing, you may consider scouting for potential sponsorships. Depending on the sponsor’s level of integration, they may bring significant capital expenditure and exposure to your project. However, finding sponsors can be a tough task without previous experience, so you will want to brush up on all the latest marketing trends. You will also want to make sure that your tickets are available on all the best event ticketing platforms.

A side note on virtual events

Virtual events, such as live streams or online workshops, require lower upfront costs than traditional event planning. This is largely due to the digital nature of such events, which do not require a physical venue or on-site customer amenities.

This means that a significant portion of your budget is freed up for other expenses. You may feel that, in order to deliver a stunning experience for your customers, you want to buy the best streaming equipment. Then you can be sure that your virtual event will have industry-leading video and audio production.

Likewise, you may want to invest in a virtual team communication tool that keeps your event managers, hosts, and stakeholders well connected.

Whatever the type of event you are planning, this highlights the fact that there really is no one-size-fits-all approach to budgeting. Certain events will rightly choose to direct more of their capital toward marketing if they feel that it will deliver the best value for money return.

The importance of event budgeting

If you are feeling overwhelmed by this mountain of information, it might be tempting to switch off and “play it by ear”. Going for this laissez-faire approach is bound to create more problems for you in the medium to long term; kicking the can down the road is never a good idea!

Rather, your budget will serve as a set of parameters for everyone (namely yourself, your event managers, and stakeholders) to be clear on. By defining the expected and maximum budget at the start of the process, you can take a reflexive approach to financial issues as they pop up. Having a contingency plan in place is always better than responding to problems as and when they arise.

It also helps with the long-term vision of your project. What are the intended outcomes of your event? Is it for charitable purposes, for advertising, or perhaps for creating a new brand? Once your project goals have been set in stone, you will find that your budgeting process shapes accordingly. For example, events intended to raise money for charity will have an easier time landing sponsorship deals. 

Tips for sticking to your budget

So, you’ve finally arrived at a complete event budget. You have calculated the basic running expenses, management, and marketing costs; as well as your expected return on income.

The question then becomes – “how do you stick to it?” Well, here are our top tips for making sure your event is delivered on time and to budget:

Allow some leeway

While budgets can act as a useful guideline for how much certain things will cost, it is by no means an exhaustive list. You will no doubt run into hidden costs and fees down the line, usually sooner than later. As such, it is a good idea to factor some leeway into your event’s budget for when things don’t go accordingly to plan.

Regularly check and update your budget

If you create a budget at the start of the event planning process and then never refer to it again, what honestly was the point of making it? Once your budget has been finalized and approved by all parties, you must make a conscious effort to review those expenses. You should agree on this at the very beginning, determining when and where you will meet with event managers to discuss the budget.

The benefits of this are enormous. Not only will it keep you constantly aware of the project aims, but it will highlight to you areas where things are costing more than expected. By having a central location for all to see the project’s finances, any problems can be addressed as soon as they come up.

Maintain flexibility

Was your budget slightly over-optimistic? Well, by regularly auditing your expenses, you will be in a great position to reshape the budget accordingly. You may find that marketing was cheaper than expected and that it has freed up some funds to be better spent elsewhere.

Keeping on top of your budget and having a positive attitude toward flexibility will prove invaluable if and when it needs reworking.

Conclusion

By now, you should have a good idea of the magnitude of planning that needs to go into events before they can be made a reality. While this can be disheartening if you are just getting started, remember that event budgets are there to make your life easier and your project run smoothly.

Bio:

Grace Lau – Director of Growth Content, Dialpad

Grace Lau is the Director of Growth Content at Dialpad, an AI-powered small business phone system for better and easier team collaboration. She has over 10 years of experience in content writing and strategy. Currently, she is responsible for leading branded and editorial content strategies and partnering with SEO and Ops teams to build and nurture content. Here is her LinkedIn.

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Eventtia Inc
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