Event managers are responsible for a wide number of tasks. This includes creating the schedule, delegating and organising, so everything is in place when the event starts. However, what is the most crucial element that encompasses all of these processes? Of course, it is the budget.
It's certainly hard to understate the importance of an event budget. Whether you are running a fashion show, business conference or sports event, it's vital to understand the income and expenditure that will incur with the event. As an event manager, you are ultimately responsible for adhering to the set budget and ensuring that costs don't overrun.
As every budget is different, the associated challenges will constantly change. With this in mind, there are some general event budgeting guidelines that remain consistent. Read on to find out more.
Be realistic about event incomes
While not every event is required to make money as its sole objective, you certainly don't want to be spending more money than you have allocated for the event. As such, it is best to be more conservative around event incomes such as sponsorship, participants or fundraising achievements.
Relevant stakeholders won't want to encounter a financial loss, so plan the budget realistically, and don't spend more than you can afford.
Think about the worst case scenario
Unforeseen costs and risks should make up around 5 to 10 per cent of the overall budget.
No event manager wants to consider that their well-planned event could go wrong, but it is always a possibility – highlighting the value of having a contingency plan in place as part of your overall budget. At the last minute, a sponsor could pull out or the weather could turn for the worse and force you to postpone the event.
A budget must have wriggle-room – allocated funds to address unexpected circumstances and ensure that event doesn't run at a loss before it even starts. According to industry insiders, unforeseen costs and risks should make up around 5 to 10 per cent of the overall budget.
Run budget exercises for your events
An event can come in all shapes and sizes, which means that figuring out an adequate budget beforehand can be tricky. As such, planning the budget can be difficult as you have no blueprint to start with.
This is where it is helpful to run budget exercises. Throughout the planning process, review and analyse each cost and its associated revenue forecast – identifying any pressure points before the event starts.
For more information about a career in event management, check out the industry courses at Kenvale College today.