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Event Management

Notes conceived and most stimulating conference or other event can turn into a commercial flop –
along with your reputation.

5.1 Event Budget

The event budget is a projection (forecast) of the income and expenditure that the event will
incur based on plans made and information gathered.
The preparation of a budget is an essential part of event management. It is fundamentally important
that Event Directors are able to predict with reasonable accuracy whether the event will result in
a profit, a loss or will break-even. This is achieved by identifying and costing all probable
expenditures and by totalling all expected revenues (income). By comparing expenditures and
revenues, it then becomes possible to forecast the financial outcome of the event.

The construction of an event budget allows the Event Director to exercise financial control.
Many organisations have run into severe financial difficulty and even bankruptcy as a result of
staging events. The budget therefore enables the Event Director to make sound financial decisions
about the choice of venue, and expenditure on promotion and equipment. The process of
budgeting also enables the Event Director to calculate how much revenue is needed to stage the
event in accordance with provided details.

Notes The preparation of an event budget is one of the earliest tasks to be undertaken in
the event management process. However, it should be expected that there will be numerous
adjustments and refinements to the budget throughout the whole project life-cycle. It is
not possible to know every cost from the start, nor is it possible to know whether efforts
to secure sponsorship and government funding will be successful. Event budgets by the
event management team gets better information comes to hand.

Although the budget takes time to develop, there are some rules that should be observed
throughout:

Budget to avoid making a loss
Be realistic about event incomes
Have a financial contingency plan i.e. what happens if the sponsorship is not forthcoming?
Once constructed, the budget assists the Event Team to determine whether a proposed course of
action fits within planned financial strategies, or not. If the answer is in the affirmative, i.e. the
item is said to be “within budget”. If the answer is in the negative, then there is an understanding
that continuing to pursue that strategy has a higher degree of risk, and the event profit will be
reduced. This does not mean, however, that any departure from the set budget is inadvisable. It
may be that the “unbudgeted” cost item has obvious financial benefits.
Make sure you understand the financial situation before you start organising your event in any
detail. Here are some relevant questions that may assist you:

What is the available budget?
Do you need to charge guests admission?

Do you need to hire venues and employ staff?
Is catering required?
Is advertising and promotion necessary?

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