UNIT 4: Planning & Budgeting - 

Planning & Budgeting of an event:

 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.

There are some rules that should be observed while Budget prepration:

  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?

Financial Analysis:
 From the development of realistic event budgets to the post-event financial analysis that measures your
success, event finances with a comprehensive suite of services include the following:

1.  Creation of an appropriate event budget 

2.  Management of your finances 

3.  Accurate accounting for all income and expenditure

4.  Provision of updated accounts whenever required

5.  Fast, efficient processing of delegate and sponsor registration fees (cheque or credit/debit card
payments)

6.  Timely payment of all event expenses 

7.  Payment of event profit to your nominated budget code 

 Categories of Event Revenue

1. Government Grants

2.  Sponsorship

3. Merchandising Sale

4. Participant Fees

5.  Raffles

6. Spectator Fees

Different costs related to budget

Break Even Analysis Break-even analysis helps to find the point where the costs incurred in an event will
be equal to the revenues earned from the project. It is the point from where profit starts coming. When a
company starts a particular event, it will have a fair idea of costs to be involved. There are onetime costs
of material that will be used in the event; and there are also certain costs that cannot be consumed in one
event, such as costs of assets like generator etc.
All event managers must be aware about the level of turnover at the event so as to cover all the costs and
know at what point profit will start being made.

 To construct a break-even chart or statement for an event, the following information is required:

1.  The number of customers per week:This can be calculated from the cashier’s analysis sheet
which shows the total number of covers as extracted from the customers’ bills.

2. The average spending power of the customer: This is calculated by dividing the total sales  by the
number of the customers served.

3.  Fixed Costs: Expenses such as rent, rates, insurance, depreciation, wages salaries can be divided
by 52 (number of weeks in a year) to calculate the average fixed costs per week. 

4. Variable Costs: This can be calculated as a percentage of the turnover figure. 

5. Assumptions of Break-even Analysis The break-even analysis is based on the following

assumptions: 

6.  All costs can be separated into fixed and variable components. 

7.  Variable cost per unit remains constant and total variable cost varies in direct proportion to the
volume of production. 

8.  Total fixed cost remains constant. Selling price per unit does not change as volume changes.
Productivity per worker does not change. 

9.  There will be no change in the general price level. 

10. Then there is the concept of contribution. Contribution is the difference between sales and the
variable cost. 

11. The formula for contribution can be shown as: Contribution = Sales – Variable Cost Also,
contribution = Fixed cost +/– Profit/ Loss Therefore it implies, Sales - Variable Cost = Fixed cost
+/– Profit/ Loss
Cash Flow for an Event:

 Capital is needed to set up any business uni, and even more so in the event business, since the planning
phase is often long and the period for capturing revenue is very short,e.g., an event team may spent a year
planning an event during which period cost will be incurred, all of which have to be paid long before
there is an opportunity to re-company money. After having spent a year planning it is possible that ticket
will be sold at the venue and that all venue will be collected on the one day. This outcome is in contrast to
an everyday business in which there is a more even cash flow. 

Monthly expenses and projected revenue need to be entered into a spreadsheet to establish cash flow can
best be managed. 

A funding crisis just days prior to an event is not rare in this event industry

Sponsorship of Events : For some events it may be appropriate to seek external sponsorship, particularly
those that require a large budget or may offer mutually beneficial benefits to an external individual or
company.

 Sponsorship of an event or activity can comprise of in-kind support, financial support, or a combination
of both. However, with sponsorship comes a lot of extra responsibility for the event organizer in all stages
of the event process; including the planning, organization, execution and post-event activities. 

The following outlines important elements of sponsorship:

 Strategic Planning. Consider the aims and objectives in relation to the purpose of seeking sponsorship,
identifying and prioritising potential sponsors and determining a strategy as to your approach. 

Sponsorship Agreements. These must include deliverable benefits from to the sponsor, outline timing,
terms and conditions and any other arrangements specific to the event. They should be included in the
initial sponsorship proposal 
Restrictions on Sponsorship. Number of external individuals and companies that are not suitable to
sponsor an event or activity.

Examples: Political Parties ,Tobacco Companies &  Gambling Services

Establishing Aims & Objectives of the Event

Having a very clear set of aims and objectives for your event in terms of what it is to achieve is critical for a
host of reasons. It is essential that the aims and objectives of your event are defined and agreed at the outset,
although they may also be developed and refined as the project progresses.

Aims relate to the overall intent, strategic direction and purpose of your event i.e. the primary motivations.
Objectives are essentially aims broken down into specific targets, to facilitate event delivery and evaluation.

Events can deliver beneficial impacts and outcomes both for the organisers and the host community, in
addition to other stakeholders such as participants, spectators, sponsors and the media. These different groups
should be borne in mind when developing and planning events to maximise positive benefits arising from the
event, which will in turn facilitate stakeholder support.

One approach to setting aims and objectives is to consider the potential impacts that the event could or should
have and use these as a starting point for developing event specific aims.

Environmental aims could encompass

 Regeneration – urban and rural.

 New infrastructure and community facilities.
 Focus on good environmental practice – in energy use and recycling.
 New planting and development of green spaces.
 Creating awareness of environmental issues.

Social and cultural aims could encompass

 Increase awareness of a venue, occasion, tradition, cultural and art forms, history, area, special interest
groups, etc.
 Building community pride and social cohesion.
 Validation of community groups and issues.
 Increased community participation.
 Introducing new and challenging ideas.
 Expanding cultural perspectives.
 Education, training and volunteering programmes.
Tourism and economic aims could encompass

 Destination promotion and improving brand image.

 Increasing tourist visits.
 Extending tourists length of stay.
 Extending length of peak tourist season and attracting tourists out of peak season.
 Increasing business opportunities and commercial activity.
 Job creation and economic investment.
 Media coverage and promotion of the village, town or region.
 Promoting local food and drink suppliers.
 Showcasing local arts and crafts.

Setting event objectives

Once the overall aims of the event have been established you can then move onto setting objectives. These
should be set in relation to the different areas of the event e.g. financial objectives, marketing objectives,
participation, etc. Objectives are important as they provide benchmarks and targets to aim for and performance
indicators, which facilitate monitoring and measures for feedback and evaluation. To enable this, objectives
should conform to the SMART acronym:

 Specific to areas of the event.

 Measurable quantitatively i.e. through numbers.
 Agreed / achievable by organisers and those assigned the tasks.
 Relevant to the overall aims of the event.
 Timed within the event schedule.

Some examples of SMART objectives:

 To distribute a questionnaire to all local businesses in the town 6 months prior to the event.
 Online ticketing to generate £5,000 in ticket revenue one month prior to the event.
 Marketing to increase visitors numbers from outside of Monmouthshire by 10% in comparison to last
year.
 To recycle 80% of event waste.
 To increase the utilisation of park and ride facilities by 20%

Prepare an Event Proposal and Use of Planning Tools

Each proposal should be written with the client in mind. Event planning is a service business, and that
service, personal touch, and creative approach are what make an event successful and memorable, two
characteristics that go a long way in generating new customers for your business. Proposals should be
well written and thoroughly researched, providing the necessary details so that the client can envision
what you have in mind.

1. Introduce yourself and the project. Begin with a brief introduction to you and your event
planning business. Include specifics such as how long you have been in business and your
professional background. Some planners put this section at the end, much like a book author's
biography on a dust jacket or back cover.

2. Write an attractive event description. Summarize the actual event, including the details
discussed during your meetings, such as the goal of the event, general time frame, number of
guests, and possible venues. If you are not a skilled writer, find or hire someone skilled with
words to give this section as much appeal as possible.

3. List all services provided. This section is particularly important. The client needs to know
specifically what services you will provide for this event. A checklist with bullet points clearly
shows the different services that are included. This approach works well for smaller functions
such as bridal showers or celebratory dinners and is easy for the client to see what you will do
and any vendors you will use. For larger events with multiple functions, such as a cocktail hour or
luncheon, you may want to create sections for each aspect of the event and then list the specific
services provided for each one.

4. Show your previous work. If you have planned similar events in the past, include photos of
these events to showcase your work. Visual representations can help the client see what you can
do, and are a great assurance to you that your style matches their vision. Having things to
compare against can really help streamline the event once it comes time to break ground.

5. Incorporate monetary. While the client may be reading your proposal and taking in all the
details and images of the event you envision, this mindset usually shifts gears when it comes to
the section those talks about money.
Event Manager Job Description

. The Event Manager will be tasked with researching and securing venues, planning and managing our
events' calendar, negotiating quotes and agreements with vendors, assisting with event marketing,.

The ideal candidate for this role should demonstrate exceptional organizational abilities, superb
interpersonal skills, multi-tasking skills, and excellent time-management. The noteworthy Event Manager
should reinforce client-to-business relations, improve the organization's image, and effectively deliver on
event objectives.

Event Manager Responsibilities:

 Brainstorming and implementing event plans and concepts.

 Handling budgeting and invoicing.

 Liaising and negotiating with vendors.

 Negotiating sponsorship deals.

 Handling logistics.

 Updating senior management.

 Managing branding and communication.

 Developing event feedback surveys.

 Obtaining permits.

 Handling post-event reports.

Event Manager Requirements:

 Degree in Public Relations, Communications, or Hospitality.

 Communication and marketing skills.

 Project management experience.

 Good leadership skills.

 Highly Organized.

 Multi-tasker.

 Good time management.

 Proficiency in various event software.

 Expert interpersonal skills.

 Risk management experience.

 Review Questions 

1. What is meant by event finance? 

2. What is event budget? 

3. What is meant by available budget? 

4. How is preparation of a budget is an essential part of event management?

 5. What are the various costs associated with the events?