Having a budget in place will ensure all decisions are made without getting carried away and overspending, as well as help you establish what funding you need to obtain.
It is essential to figure out every single moving part of your event that could potentially incur a cost (expenditure) and how much money you require to pay for it (income):
- Create a list of all your expected spend: these could include staffing, entertainment, advertising, catering, venue hire, promotional items, fundraising, ticket giveaways and more. Allocate estimated costs to each expected spend.
- Create a list of all potential income sources: these could include ticket sales, merchandise sales, stallholder fees, funding, sponsorship, and more; allocate estimated income for each expected source.
Financial planning is a critical part of event management.
Once you have created your lists of spend and income you will be in a solid position to establish the viability of your event and what is required for its success (sponsors, funding, smaller venue, minimum number of ticket sales etc).
- When you receive quotes make sure you check if costs are GST inclusive or exclusive, because if they are not you will need to add 15% to the cost. Note, you must register for GST if you carry out a taxable activity and your turnover was $60,000 or more in the last 12 months or will be $60,000 or more in the next 12 months.
- Calculating estimated income from tickets sales can be tricky particularly when you have a number of differently-priced tickets. It can often be best to work out different scenarios of tickets sold. For example if there are 100 tickets available, you could have three columns of scenarios in your spreadsheet: Optimistic (100 tickets sold), Likely (55 tickets sold), and Pessimistic (25 tickets sold). With these three scenarios, if your budget is formulated correctly with all other income and expenses, you will be able to see the revenue for each scenario. You can then also add a column for Actual which you can be updating as you go.
- Obtain quotes wherever possible, and from a few different businesses, so that your budget is accurate and you get the best deal. Funders often require quotes when allocating grants. Ask different funders to pay for different aspects of the budget.
- Set aside a contingency fund (usually 5% of your budget) for any possible unforeseen expenses. No matter how careful you are with your planning, something may crop up or go wrong that requires some expenditure, for example unanticipated legal fees.
- It can be wise to include an expenditure line in your budget for miscellaneous costs which could end up being budget spent on water bottles for event staff or other sundry costs that are easily missed off in the budget preparation.
- Be clear about which party (event organiser or performer/s) is responsible for performer travel costs eg. speakers, bands, and artists.
- Remember to include a ticket allocation for promotional activities such as competition giveaways and sponsor tickets.
- While you have not yet made it to the organising and implementing phase of your event planning, place two columns in your budget for the cost and income financials: one named Estimate and another named Actual. As you spend money, enter in the Actuals, this will keep you on track; if you find you have overspent on some items, you can look to make savings on items not yet purchased.
Community Funding/ Grants
- To ensure you have the best chance find out all the information about the funding available and prepare your application accordingly.
- Give potential funders a phone call before sending in applications for funding. They will make sure you are going in the right direction, advise if there is any limit on funds at that particular time, as give you an accurate steer on time-frames.
- Be aware that some funders meet regularly and others less often. Apply for funding at least six months before your event.
- It is most important that when you apply for funding your budgets are as accurate and complete as possible.
- Most funding agencies require a financial report at the conclusion of an event. Major changes in spending and overall budget construction tend not to go down well at this time, so keep within your budget!
- Sponsorship investment can come in many forms such as cash, advertising, accommodation room nights, prizes, professional services, and more.
- Create a wish list of sponsors; consider which companies would be a good match to sponsor the event. Write a proposal which shows the value of their involvement and how it will benefit their company.
- Start thinking of ways you could highlight your sponsors in different channels in the lead-up to and throughout the event. A company that is considering sponsoring your event will want to know what they will get out of their investment.
- You could propose a few different sponsorship options offering different levels of benefits to the company. For example the local radio station option 1: sponsor your event by way of daily advertising, in return for benefit 1: their logo featuring on the website as well as 10 complementary tickets which they can giveaway; option 2: sponsor your event by way of daily advertising and $20,000 contribution, in return for benefit 2: their logo featuring on the website and the tickets, 10 complementary tickets which they can giveaway, and naming rights to your event.
- Assign one person to manage the relationships with sponsors. Too many people making promises can become very confusing and cause problems down the track.
- Ensure sponsorship agreements are well documented and signed by both parties.
- Receiving money from individuals is not a usual source of funding, although recently crowd-funding is becoming popular. Various websites have been set up where you can register your event and raise money to help get your event off the ground. PledgeMe, Kickstarter, and Givealittle are some platforms you could use.
Event Planning Toolbox