BUDGETS AND CONTRACTS are the backbones of any
MEALS –these are expenses for the food and
event. Budgets must be aligned with the organization’
or client’s financial goals for the event. The final budget
is mutually agreed upon by the client and event
organizer. The contract seals and binds both parties
with this agreement.
BUDGETS- Represents an action plan that each
successful event plan must carefully develop. The event
planner should use the expression “staying within the
budget” every day and for every project.
FINANCIAL PHILOSOPHY OF THE EVENT:
1. Profit–oriented events. Revenue exceeds expenses.
2. Break-even events. Revenue is equal to expense.
3. Loss Leaders or hosted events. Design from the very
beginning to lose money. These events usually are
organized for the purpose of promoting a cause or
agenda.
BASIC PARTS:
1. Revenue –refers to the earnings from the event.
2. Expense –refers to payments made for goods and
services used for the event.
3. Profit –represent a surplus.
Formula: Revenue – Expenses = Profit
FIXED COST - are the daily costs of doing business such
as salaries, insurance, rent, utilities, equipment, dues,
and subscription. These items remain the same despite
the changes in factors related to the event.
VARIABLE COST - are expenses that vary depending on
the factors such as the number of attendees. Examples
of this are food and beverage, accommodation,
conference kits, and other consumables.
Formula: FC + VC = TC (TOTAL COST – sum of FC and
TC)
1. VENUE – the expenses incurred at the site are
covered here. These include costs for the needed
structures, function room rentals, and accommodations
for the VIP guests, speakers, and staff.
2. PROGRAM – expenses for the delivery of the
program such as sounds and lights, fees for performers
and speakers, design, and equipment needed for
staging.
3. MARKETING –marketing plan such as advertising,
public relations, and promotional materials.
4.
beverage served to the guest and organizers.
5. STAFF/PRODUCTION CREW- Salaries and fees of the
organizing team and other contractual workers
designated for the setup, registration, and ushering are
all considered here.
6. TRANSPORTATION –expenses that provide transport
services.
7. LICENSES and PERMITS – permits and licenses in
organizing the event from government agencies.
8. ACCOMMODATIONS –host usually provides shelter
for the speakers and other related guests.
9. PRODUCTION and STAGING FACILITIES – lighting
fixtures, sound system, LED walls, camera, and other
technical requirements.
10. FEES –performers/talent, speakers
11. SECURITY –expenses in hiring police, security
guards, bouncers, and marshals
12. CONTINGENCIES – should be prepared to protect
people, property, proprietary information, financial
investment, and reputation. It is normally from 10-201%
of the total cost.
SOME REVENUE-GENERATING ACTIVITIES:
1. Registration fee
2. Entrance Fee
3. Exhibit sales
4. Vendor fees
5. Sponsorships
6. Advertising
7. Area branding
8. Merchandise sale
9. Ex-deals
Value-added Tax (VAT) – is a business tax in the form of
sales tax. It is a tax on consumption levied on the sale,
barter, exchange, or lease of goods or property and
services in the Philippines and on the importation of
goods into the Philippines. It is an indirect tax, which
may be shifted or passed on to the buyer, transferee, or
lessee of goods, properties, or services.
CONTRACTS – is an arrangement between two or more
competent parties which is noted by a legal witness,
usually a lawyer. A contract defines the rights and
duties of the contracting parties and should be a clear
roadmap of the expectations and responsibilities of
both parties.
Reasons:
1. Protect your legal interest
2. To abide by ethical practices
3. To ensure the safety and security of your event
stakeholders
4. To protect your financial investment
ADMINISTRATION
•Management contract
•Sponsorship contract
•Exhibitor Contract
•Insurance
•Association/Organization partnership
•Speakers agreement
•Registration form
OPERATIONS
•Freight forwarders
•Security Agencies
•Transport
•Entertainers and Performers
•Media Partners
•Advertising or PR agencies
CONTRACT BETWEEN THE EVENT ORGANIZER AND
SUPPLIER:
•Venue provider
•Accommodation provider
•Caterer and other F&B suppliers
•Program equipment suppliers
KEY COMPONENTS OF AN EVENT MANAGEMENT
AGREEMENT OR CONTRACT
A binding contract must contain the key components:
PARTIES- The names of the parties must be identified.
The agreement must be between these parties, and the
names that are used in the agreement must be defined.
OFFER- The offer is the service or product tendered by
one party to another. The event planner may offer
consulting services to a client, or a vendor may offer
products to an event planner. The offer should list all
services that an event professional offers to provide.
Any miscommunication here may lead to costly
litigation in the future.
CONSIDERATION- Defines what one party will provide
the other upon acceptance of an offer. Consideration
may be either cash or in-kind product or services.
ACCEPTANCE- When both parties accept the offer, they
execute (sign) an agreement confirming that they
understand and agree to comply with the terms and
conditions of all agreements.
TERMS- Refers to the scope of work, event details,
service conditions, mode of payment, and delivery of
the service.
CANCELLATION- A notice of contract termination is a
formal declaration when both parties plan to cancel a
contract without performing the obligations.
FORCE MAJEUR (ACT OF GOD)- Refers to any
unforeseen and beyond the control. These may include
hurricanes, earthquakes, floods, volcanic eruptions,
tornadoes, famines, wars, or other catastrophic
disasters such as terrorism.
ARBITRATION- A place of a legal judgment when they
fail to agree.
BILLING- Process of preparing a statement of expenses
and sending invoices for collection of payables.
TIME IS OF THE ESSENCE- A clause instructed both
parties that the agreement is valid only if it is signed
within a prescribed period of time.
ASSIGNMENT- Any assignment of a contract occurs
when one party (assignor) hands off the contract’s
obligations and benefits to another party (assignee).
INSURANCE- help protect your investment in a specific
event. Event insurance may help cover your costs if you
unexpectedly need to cancel your event or if you're
found responsible for property damage or an injury
caused during your event.
HOLD HARMLESS AND INDEMNIFICATION- In the event
of negligence by either party, the negligent party agrees
to hold the other party harmless and to defend it
against harm.
REPUTATION- Is the opinion or belief of people about
an individual, organization, or association