In the competitive market realities of today, event planners need to employ budgeting strategies in order to stay organized and better equipped to anticipate client inquiries. Constructing an event planning budget enables an organization to find the best deals and to meet its priorities by determining the feasibility of the event in terms of available resources, cost and return on investment. In that way, event planners are able to determine the actual cost of the event versus the actual investment and decide, in real time, on how to save money on event planning.
Typically, an event planning budget is constructed in an Excel Spreadsheet or with the use of event budget software. Technologically advanced organizations prefer the use of software because they can better monitor the collection and integration of business data, which leads to better management of corporate expense policies and cost-effective decision making.
With event planning budget, event planners can generate a variety of standard and customized reports that track expenses by category and sub-category, expenses by vendor, as well as projected, negotiated and actual expense reports.
In order to track expenses by category with accurate projections, event planners base their estimates on historical data. One of the most common methods is to calculate the average spending on food and beverage at the past ten events; or to calculate the percentage of beverage cost that was attributed to non-alcoholic choices. Such metrics are customizable and facilitate the budgeting process because they break down the budget in critical parts, offering room for further negotiations.
The customization of sub-categories offers the opportunity to obtain data intelligence. Typically, event planners run customized reports that track corporate travel expenses. One of the most common methods is to calculate the percentage of travel budget that is attributed to rental cars, to air fares, to hotel accommodation, to event facility and all related expenses. In addition, event planners sub-categorize transportation charges including any percentage of the budget that is used for event transfers, coaches, shuttles and any related expenses.
Similarly like in the category expenses, the projections of expenses by vendor are based on historical data. Event planners are able to determine the percentage of their spending with specific vendors over a period of time. In this part of the budget, event planners include expenses for décor such as floral, tents, centerpieces etc, catering expenses, and entertainment & equipment expenses such as audiovisual equipment. Typically, catering expenses account for the 30 percent of the budget.
Event planning budget includes also smaller categories that summarize expenses made for invitations, program booklets, banners, name badges, event signage, gifts for the guests, and separate activities such as spa, tennis, biking etc. Normally, the total cost of these expenses accounts for the 25 percent of the total budget, depending on the size and the complexity of the event.
When all amounts are included in the budget spreadsheet or software, event planners can summarize projected, negotiated and actual expenses. Projected expenses will be negotiated with the client in order to take the final decision. Actual expenses are invoiced after the event is held.
Constructing an event planning budget is a powerful tool. However, highly professional event planners track down event costs and collect business intelligence data in a comprehensive and innovative way that depicts their fundamental role in effective cost reduction. Their contribution to successful budgeting in not just effective tracking of expenses, but the utilization of event management tools incorporated into event planning budgeting. In that way, they possess potent capabilities in showing to their clients how their money is being spent and collected in relation to every component of the budget.
Written by Christina Pomoni
Financial Adviser – Freelancer Writer