Surprisingly it is one of the things I enjoy most about events, putting together a good thorough budget. Don’t get me wrong, I love the creative side too. Coming up with a stage set or an event brand look and feel or event styling to make things pop, but after a long stint in doing association events and working within tight margins there is nothing better than seeing that bottom line grow after carefully managing the ins and outs of a project.
This daily number check obsession is not a consistent event manager trait though and I learnt this the hard way after not triple checking. The lesson? Checking numbers should be a daily ritual and those numbers need to be checked by two sets of eyes internally and then we ask our clients to be across them as well.
Reflecting on budgets and numbers of late and putting together new client budgets here are 5 things I’ve learnt tend to get overlooked when putting them together that can help you keep a tight, detailed hold on the numbers:
Merchant fees
These tend to not get factored into an event budget, but they can have a huge impact depending upon your ticket prices. I’ve seen clients shocked when they realise they are paying thousands of dollars in merchant fees and so the little profit they were excited to make has quickly turned into a loss. My tips around merchant fees:
Always factor 1.8% of total ticket revenue to cover the merchant fee – depending on your ticketing system you may have people who elect to pay by EFT, which means the saved fee is added cream to the bottom line.
Invoice for sponsorship and group registrations where possible to avoid large fees.
Research payment gateway options thoroughly and understand what the merchant fees are from your bank. Likewise, your registration platform and whether it has connected merchant facilities and additional charges.
Factor the merchant fees into the ticket prices or consider passing on the fee to the attendee.
Speaker costs
You’ve got their fee in the budget and their flights and accommodation. Have you forgotten their transfers? What about meals? Are they expecting a per diem? Was their agent fee included in the quote or additional? Most of this will be laid out in a good speaker’s contract but some time the lines get a bit blurry and blurrier still when you are dealing with invited speakers who might be covering their own flights but are entitled to accommodation and registration. But what happens when they want to bring their partners? And what about the additional social functions? Free tickets? Multiple these issues by 100+ for some conferences and it is an event managers nightmare keeping it straight. My best advice is make the decisions early, stay consistent, use your event manager to play bad cop, issue formal letters of invitation outlining what will and will not be covered and be mindful that every entitlement will affect the bottom line in some way, that free ticket to dinner may not seem like much but 100 speakers + partners I guarantee is upwards of a $30,000 expense.
Is your exhibition a revenue stream or a cost centre?
Holding an exhibition is a great way to showcase an industry, provide an area of interest and a great way to get in additional revenue and attendees to an event. While there are many objectives to holding an exhibition, the financial viability needs to be assessed and perhaps adjusted. Adding up the venue hire for bump in, the build costs, materials, labour, other entitlements offered, the cost of included exhibitor tickets, catering, administration and so on is a needed exercise prior to setting package pricing and releasing a sponsorship prospectus to market.
Unexpected venue charges
Read, read, read your venue contracts carefully. While I maintain that venues aren’t out to rob clients, there’s something to be said about unexpected charges that make it onto the final bill. Have you ensured you’ve made provisions for stipulated additional costs? A long time ago I remember a colleague having an “Oh F*ck” moment when going over a budget and realising that the exhibition hall hire did not include any carpeting and that was a cost that was going to run into the tens of thousands of dollars – not a comfortable conversation to have with a client a few months out from an event when things were already tight. Be sure to check for stipulated costs for security personnel, cleaning, carpeting, rubbish removal, porterage, penalty rates for weekends and public holidays and be mindful of charges for running over time or property damage.
Under estimating the ordinary
Most women well know the feeling when you go to Target or Kmart to pick up one or two things and next minute you’ve walked out with a receipt five times what you were expecting. Clients are generally surprised how much the little things add up – printing? That’s not cheap when you multiple it by 500-1000. Stationary? Likewise, checkout the price of a hole-punch these days. It’s the little things that add up onsite – stationary, printing, travel costs, gifts, postage etc. At a minimum always include a $500 buffer for stationary and onsite supplies, you’ll be surprised at what you’ll need. But as a complete contradiction, before I purchase things on behalf of the client I ask the following questions:
Does it add to the delegate experience?
Can this be done electronically?
Can I hire/borrow this from someone else at a fraction of the price? Conversely, is this something I could buy and use elsewhere to disperse the cost
Can I get this from a sponsor or from the venue?
There are so many other things to consider when putting together a budget. I’ve seen budgets run for pages and pages and others that have been no more than 8 lines in total. The most important think I believe is to make a habit of check the numbers continually throughout the project cycle and knowing where the money is coming in from and where it is going out to. Leave your event budget tips and tricks in the comments or if you’d like to talk through any of your upcoming event budget concerns or how the Leverage team could add value to your event get in touch, hello@leveragemsolutions.com .