Setting a budget for an event can allow an organizer to allocate funds when they’re planning a party, conference or other large outings. The reason for each function may vary, so it’s helpful to set a budget for each potential occasion. Event planning professionals can benefit from learning more about the steps to take when setting a budget. In this article, we discuss the importance of an event budget, the reasons for one, the components it may include and how to create one.
Why is it important to budget events?
It’s useful to budget an event because it allows planners to work within their financial limits. Setting a budget can help you allocate funds for the different components, such as securing a venue, catering and entertainment. Each occasion may be for a different audience, take place for various occasions or occur at a specific time of the year, so it’s important to plan the budget for different circumstances.
Reasons to create a budget for events
Here are some reasons to create a budget for an event you’re planning:
When you’re hiring staff
When you’re creating a budget, consider the number of staff you need. This may include hiring a catering company, entertainers and parking staff to help manage your event. When hiring staff members, it’s helpful to hire qualified professionals to help your guests for operations to run smoothly and with minimal errors.
To secure a venue
As you create a budget, it’s helpful to consider the venue. When choosing a venue, consider various factors, such as the size of the room, the demographic location and venue type. Consider picking a venue that’s close to where a majority of the event attendees live, so they can avoid a long drive or a small fare for a ride-booking service . Your venue can also be appropriate for the theme of your special occasion. For example, if you organize a holiday party, you may host the festivities at a venue appropriate for adults.
When contacting vendors
Consider contacting various vendors to ensure you stay within budget throughout your planning processes. This can include talking to multiple caterers, disc jockeys and decorators to determine which companies’ prices match your budget. Hire vendors that are both affordable and that can provide quality service.
When gathering sponsors
Getting sponsors for your event can help you pay for expenses. In return, you can help advertise a sponsor’s brand, which can allow their company to gain visual representation and attraction. When hosting your gathering, include your sponsors in any print marketing materials, advertisements or social media posts.
Paying for promotional materials
An essential part of your budget may include the marketing and promotional materials you use to promote your function. This may involve any social media ads, print flyers or TV commercials to help attract attendees. Promotional materials can help highlight the event that’s associated with your organization’s mission, vision and products or services.
Common components of an event budget
Here are some typical aspects of a budget to consider when you’re hosting an event:
Rentals: A budget may include the costs involved with renting equipment. This may include components such as tables and chairs, heaters or misters and a stage and speakers.
Catering: No matter the size of your gathering, it may be helpful to hire a catering company to handle food and drinks. This may include hiring a caterer for appetizers, a buffet or desserts.
Transportation: Transportation costs include any expenses involved with hiring and paying a valet company, bus service or individual ride-booking services for guests.
Decor: As you’re planning your function, you can consider any decorating costs involved. You can make the setting aesthetically pleasing for those in attendance, which can require decorations that match the theme.
How to create an event budget
Here are seven steps to help you create a budget for your next event:
1. Research past events
It’s beneficial to look up the cost history of your company’s past events to help determine the expected cost of the function you’re planning. This can allow you to examine where you may eliminate unnecessary expenses, which may involve hiring fewer staff members, using fewer materials to decorate or evaluating how much food to stock. Researching past occasions can also allow you to determine the components where you may spend more money to help the event run efficiently.
2. Set an overall budget
As you plan for a gathering, it’s helpful to first determine the amount of money that’s available for you to spend. This may include determining your incoming revenue and examining variable expenses, which are the costs that may change as you plan. An estimate can help you allocate expenses accordingly when planning your party. Your estimate can include costs involving decorations, staff and rental equipment.
3. Create a plan
Once you calculate a budget estimate, you can make a plan to help you prepare for your special occasion. It’s useful to define the objectives for your event to be successful. This may include choosing a date and venue, building your staff, choosing your form of entertainment and confirming speakers. After you set a plan, it can allow the other steps in the planning process to align with your objectives.
4. Talk to sponsors
As you secure stakeholders, approach them professionally to help them build interest in supporting your event. Prior to meeting with stakeholders, you can ensure your budget and plans for the event. You may also let stakeholders choose what type of meeting they want to engage in, such as in person, over the phone or a virtual meeting. Answer questions and concerns they may have. Once a stakeholder supports your function, it’s helpful to provide them with frequent updates and ensure them that processes are going according to plan.
5. Choose vendors
As you’re researching the different vendors to use for your event, determine the needs of your project. You can search online or network with colleagues to find quality candidates. You can get multiple quotes from each vendor to determine which company is cost-effective for your gathering. When choosing a vendor, focus on other aspects beyond the cost, including the functionality of their products or the aesthetics of their equipment.
6. Calculate advertising expenses
When planning your budget, it’s helpful to consider how much the materials might cost. This may include web-based advertising such as promotional swag, social media ads and website banners. Other great ways to promote your function may include handing out flyers to staff or displaying postcards in local stores. The places where you promote your special occasion may determine the type of event you’re hosting and the age range of guests you might attract.
7. Determine projected revenue
It’s useful to estimate how much money you might make when hosting your gathering to determine gross profits. Your projected revenue may include the funds you receive from ticket sales, food purchases and other vendors. Determining the amount of money you make from hosting can help you allocate your funds so you can plan for expenses throughout the planning process.