Executive Arrangements

conference and corporate event budgeting

For event budgeting, it’s always important to develop the budget at the start of the event planning process. If you simply let revenues and expenses “come in”, you won’t have a sense of whether the event is going to make money, break even, or lose money. Budgeting is a form of event risk management.

Simply put, an event budget identifies the event’s expenses and revenues (and sources of). It calculates the difference between the two to predict the financial outcome of the event.

Generally, the goal of most events is to make money or, at the very least, to break even. However, there are some events where losing some money is acceptable. This will be tied to the goal of the event and the resources available to cover the shortfall. For example, an event might be showcasing a new product or program to potential customers, where the organization is willing to lose money on the event with the goal of gaining revenue through the sale of the product/program.

Regardless, it is still important to create an event budget to ensure the financial outcome of the event falls within acceptable parameters.

Event Budgeting – where to begin

When creating an event budget, I start with expenses. What line items are required in order to implement the event? Think about venue, catering, audio-visual, speaker costs, event planner, advertising, printing… any area where you spend money to deliver the event. For the most part, these numbers will be estimates.

How do you know if your estimates will come close to your actual numbers? Some costs are fixed and will be outlined in your contracts, such as venue room rentals and speaker fees. However, sometimes room rentals are adjusted based on the amount you spend on catering and/or the number of guestrooms you book, so watch for those. Additionally, some venue contracts list a “catering minimum”. This is the minimum amount of money you are required to spend on catering (before gratuities, service fees, and taxes). If this is the case, you can use the catering minimum as a guide for your estimates.

Be as realistic (as opposed to optimistic) as possible when considering your attendance (which drives your catering estimates). It’s helpful to use past attendance history (even if you hope to increase your numbers for this year). However, your numbers may still be difficult to predict as attendance trends have varied widely coming out of the pandemic. In any event, considering all your costs as realistically as possible will help with your estimating.

Event Budgeting – estimating catering

When estimating for catering, think about the meals you will be ordering and what you’ll include with your coffee breaks (snacks/beverages or beverages only). If the venue or caterer has not provided you with their current menus, ask for those. If it’s not listed, ask for the venue’s gratuity or service fee rates and ask what line items they apply those charges to.

For example, some venues apply the service charge to everything (catering, room rentals, audio-visual) while other venues apply the gratuity to food and beverages only. Gratuities and service fees can vary widely across venues (ranging from 15-20%). This will significantly impact your estimates if not taken into account. Also, be aware that gratuities and service fees are themselves taxed. When you consider that gratuities/service charges and taxes can add an additional 25%-35% to your invoice, it’s vitally important to consider these when estimating expenses.

Event Budgeting – about revenue

Next, let’s consider revenue. Depending on the event, you might have a number of revenue sources or only a few. Here are some revenue examples: registrations, sponsorships, donations, exhibitor fees, merchandise (include your merchandise costs under your expenses), advertising (a source of revenue if groups are paying to advertise with your event).

In terms of registrations, be conservative in your estimates. It is better to base your budget on a lower number than to overestimate and fall short of covering your expenses. If you can, use past history as a guide when projecting your event revenues.

Balancing Your Budget

Once you’ve pulled together your expenses and revenues, make your comparison. Are you breaking even? Making money on the event? If your expenses are exceeding your projected revenues, it’s time to sharpen your pencil and look for where you can cut some costs and/or increase your revenues.

Here are some cost-cutting suggestions:

Venues: if you haven’t signed the contract, consider other venues that might give you better rates on room rentals and catering
Catering: opt out of All Day Meeting packages and order “a la carte” instead (you’ll be able to save money if you slim down the food and beverage offerings); additionally, consider cutting breakfasts and ordering snacks and beverages instead; something to note is that often, not everyone will show up for breakfast, so even if you keep your breakfasts, consider reducing the number of people you estimate for those
Audio-visual: many venues have their own in-house AV company which can sometimes be more expensive than using an outside AV company; shop around and get a few quotes for comparison; even if the venue charges a fee for using an outside AV company, you might still be able to save money going this route

Finally…

Having developed your event budget, don’t let it sit on the shelf. Regularly review your budget, updating it with actual expense and revenue numbers as they come in. By keeping an eye on these, you’ll know whether you need to make any adjustments as the planning progresses. Sometimes unanticipated expenses pop up and/or expected revenues fall short, and you need to be able to adapt to those before the event happens. Budgeting is an excellent tool to mitigate your event risks and ensure your event’s financial goals are met.

If you’d like assistance with developing your event budget, contact me at carol@executivearrangements.ca.

– Carol Tebay, Executive Arrangements

document representing a banquet event order

Banquet Event Orders are critical to the success of any event at a venue. If you’ve ever managed a hotel or convention centre event, you’re probably familiar with Banquet Event Orders. However, if this is new to you, here’s a review. And for those of you who haven’t worked with a venue in a while, here’s a refresher for your next event.

The Banquet Event Order

What is a Banquet Event Order (BEO)? The BEO is the document which outlines all the details of your event. This includes the room set-up, audio-visual requirements, event times, menus for meals and breaks, bar information, and any special notes about your event. It should also include pricing for your food and beverages, the room rental (if applicable), and audio-visual rental prices.

This is the communication document for the various venue departments tasked with executing your event. The banquets department uses this to set up your meeting room, to schedule staff to serve at the event, and to direct them with what to do during the event (e.g., is your dinner a buffet or plate service? Staff service will look quite different depending on your type of meal). The kitchen uses the the BEO for their food orders, staff scheduling, food preparation, and service timing. The audio-visual department uses this to set up and manage your AV for the event.

Be clear

It’s important for you to be as clear as possible when communicating your event needs to your venue contact. If they don’t understand what you want, they won’t be able to communicate it to the departments involved in managing your event. It’s helpful to organize your event details into categories like set-up, audio-visual requirements, menus, and special notes. Audio-visual is distinct from set-up as most venues partner with AV companies to fulfill these requirements, and so a separate department needs to see these details.

Be sure to include the time frames for your breaks and meals. For example, is your break 15 minutes long or a half hour? Is your lunch 45 minutes or 1 hour? Don’t assume the venue knows your schedule. It’s also helpful to provide the venue with a copy of your event program. This provides additional information about your event and acts as a cross-reference for service times, etc.

Review, don’t assume

All the different departments must work together to ensure the event runs smoothly and if something isn’t clear on the BEO, it can lead to confusion and headaches during the event. This is why it’s important to carefully review the BEOs that your venue sends to you. Don’t assume they have fully understood your event requirements. Double-check times, set-up, menus, AV… all the details to ensure your event runs smoothly. Ask questions if you’re unsure about anything. If there are errors, notify the venue as soon as possible. You don’t want to leave this to the day before your event, as the venue needs time to communicate your changes to various departments. Make sure the venue sends you a revised copy of the BEOs as well. And double-check again.

Although there are general details common to most events (such as a podium and microphone on a stage at the front, or half round tables for meetings and conferences), much of BEO creation is a manual process and there is always the risk of human error. The BEO is your key venue communication tool. Don’t skimp on getting this right.

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Event Budgeting for Conferences & Corporate Events