Tips for building your event budget
Time to read: 4-5 minutes
Building your first event budget can be hard, not to mention scary. It can be difficult to know what to do when you’ve never budgeted for a client before. Don’t worry! We’ve got your back, here’s our top tips for buidling your first event budget.
What is the purpose of a budget?
This sounds like a silly question but understanding the why will help clarify the what. An event budget serves several purposes:
Laying out everything the client needs
Building a budget will help you manage resources. Budgeting for everything at the beginning means you have a list of all the things your event’s going to need that you can consistently refer to if you get a little lost. Keep this in mind while you’re building your budget and you’ll be more motivated to remember each little thing.
Beating the competition
During the pitch process, there will often be several companies competing for the same project. Your budget is one of the ways to give yourself an edge over the competition. When done properly, your budget will show clients what they’ve got to look forward to and give them a transparent understanding of the costs they’re paying for. Understanding this before you start building your budget will ensure you place more emphasis on coming up with imaginative ways of lowering costs at this early stage of the event process.
Any overspend is going to leave you with either a lighter pocket or some bad reviews. A strong budget will prevent this. Use the budget as an opportunity to research costs and ensure that your client will be pleasantly surprised when it comes to reconciliation.
Seeing your profitability
Whether you’re adding a management fee or marking up costs, the budget should help you understand and keep tabs on your profitability.
Starting your budget with these purposes in mind will help you get the most out of the process.
Categorise the different sections of your budget. For example, venue, food and drink, per diems (the daily expenses of you or your team), logistics etc. Then expand on each category, using the category structure to help you think of anything you might need to add. Include a column for adding resources. Add each item as its own line. It’s easy to think you’ll remember what something means now and then forget in the rush of planning your clients’ event. Include number of units and cost per unit for each line item in your budget plan.
How much is it going to cost you and your team to get to and from the event? Are you going to be surprised by a huge cab bill on the day of? What’s everyone having for lunch? New event planners can easily forget to budget for their own expenses. You’re not travelling to the event for fun, you’re doing it for work and your client should be paying for that.
Contingency is your emergency just-in-case fund. It’s important to include a contingency number. There are a lot of different suggestions regarding how much you should add on as your contingency number. As long as you’ve budgeted carefully 10% should be okay. If your client’s given you a specific amount you have to adhere to, subtract 10% as your contingency number before you start budgeting and only use the remaining 90% to budget for your event.
Sometimes, new event planners can feel too awkward to ask important questions. One trick that can help is to ask your venue or suppliers if they have any information available on how much the last event of the same size cost.
Once you start the project, track every cost against your budget. Do this against each line item so you really understand where your money is going. You’ll get very busy, but keeping track of your costs is still important. If you don’t, you can easily end up spending more money than you have and being unable to explain why to the client, leaving you as the person liable for some of those extra costs.
Raising a PO for your costs is the best way to keep track of your budget. It may sound tedious but doing this consistently can easily be the difference between a profitable event and a loss making one. If your client asks for anything extra, get it in writing and keep the emails in a safe place to refer back to during reconciliation.
With a strong budget, any event can be a breeze. Outline all your costs and you won’t be caught out when reconciliation comes around.