How to prepare a budget for an event

Organising an event always implies an important challenge. Many variables have to be taken into account, we have to work with a wide range of supppliers and people, and of course, offer the optimum result in accordance with the budget that has been allocated to us. How to prepare a budget for an event is precisely one of the biggest headaches any Event Manager can be faced with.

The budget is the key cog of the organisation for a corporate event and on which all the actions carried out will depend. Consequently, in this article we will show you the necessary steps for preparing a budget for an event, along with the available tools for helping you in the planning and follow up of the expenses.

Why is it important to prepare a budget before organising a company event?

Making a budget is essential for the organisation of an event from the very beginning of the whole process and continuously up until the evaluation of the results. A detailed budget gives an idea of the dimensions of the act to be held, it sets limits, helps us to establish the priorities, and to know how profitable the actions that we have put in place have been… let us take a detailed look at it:

• It marks out our expenditure limits. It sets out a maximum amount and offers us peace of mind so that we do not stumble into actions that without realising it, allow things to get out of hand.

• It helps us to proritise. As there is a limit, it makes us plan and understand better what the best areas are to invest more in, and what the less important ones are for the final result.  

• .It makes decision making easier. As we have previously drawn up a road map based on a particular sum of money, it allows us to negotiate calmly, firm in the knowledge of what our upper limits are.

• It helps us to keep control of costs. We will always be aware of the costs we are incurring and we will never be surprised by “phantom costs“ which sometimes appear from nowhere.
  
• It allows us to establish the success of the event. If we know the exact amount of the investment, we can measure the results in accordance with our balance sheet for costs and income once the event is finished.The income does not have to be necessarily an economic income. It will be what we set out previously as our target to be achieved: a particular number of meeting with clients, a certain volume of mentions and impacts on social media, the number of attendees etc

Principallly, for these reasons a detailed budget is crucial before starting to consider all the actions and amounts to be allocated for the correct organisation of our event. Once we have the budget in our hands, we can deal with the costs. 

What are the costs of an event?

There is no closed or fixed list of costs for the organization of an event. As each event is different, the cost list will depend on the needs and aspirations of each one. To give an example, an open-air gala dinner will require a high cost in lighting whereas this would never be included in a daytime activity for team building activities. 

Therefore, it is important to get together with your working team and calmly begin to visualise your event. Out of the scenario that you come up with together, there must be a list of needs which require a certain cost. It is also advisable to manage that list individually as items which had not been contemplated always come up and additions to the list will have to made. 

Below we have a list of expenses which are usually common to all company events:

• Venue hire: Here we should probably assume sub sections such as cleaning and security.

• Catering: This will depend on the number of guests and of the aspirations as far as the supplier is concerned.This item must also include all the tableware if we understand that this will be needed independently from the service offered by the catering company. 

• Decoration: Here all decorative items will be included, both those supplied in the form of metallic structures, wooden or PVC items… and floral, decorative or lighting items.

• Entertainment: This item would incorporate everything related with artists, or personnel hired for the purpose of livening up the event: musicians, DJs, comedians, theatre shows, etc.  

•  Audiovisual services: Everything to do with multimedia equipment.Screens, speakers, computers, internet connection…
  
• Everything to do with the transportation of the guests, the staff and the material required for the celebration of the event.
• All the promotional costs of the event, for the hiring of services and material.In this item we can also include stationery and  design of material to be handed out during the event.

• Cost of hiring extra staff such as security, medical service, interpreters, attendants…

• Everything connected with the necessary insurance to celebrate the event, both social security and material for those involved.

• Other costs. It is always advisable to allow an amount for expenses which do not enter in the above items or for unexpected costs.

As we mentioned earlier, this is a typical list which can serve in principle, but each event has needs and items to be covered which  do not have to be necessarily these.

It is therefore important to make a detailed list of the elements which are required for the event and once this is done, begin to consult prices of suppliers for each one of them so that in this way, we can obtain an exact budget.Let us go deeper into this aspect in the following point.

Steps to follow for preparing an event expenses budget  

When preparing a budget for the expenses of an event, it is advisable to be very detailed in all the steps. This is the only way to have control over all of the items , so that we can adapt to the investment established for the event and to make an efficient and responsible use of it.Let us take a look at the steps we must follow:

• Identifying  the objective of the event and the public to whom it is addressed is vital in order to know what actions must be carried out and to define the nature of the act.  
• Establish the date, place and duration of the event.

• Create a detailed list of the items required for the show. This includes aspects such as those mentioned in the previous point of this article referring to expenses.They may be those previously indicated ( food, drinks, sound equipment, illumination, decoration, entertainment etc. ) which are the common ones, or some particular costs which your event may have. 
• Once all the necessary elements have been established, search and compare prices of the different suppliers for each of those elements. 
• When we know the approximate cost corresponding to  each item, allocate a budget to each of them taking the approximate cost which each one represents and proritise the cost of the the items we consider to be the most important. 
• Adjust to the total budget
• Assign responsibilities and items to each member of the working group who forms part of the organisation of the event .
• Perform constant follow up on each of the items and the cost deriving from each of them.
• Do the same review once the event has finished and come to conclusions which will be useful for future actions.

Real example of a budget for an event

We provide you with a list of items that may form part of an example budget for a real event. All the details are invented and therefore not representative of the real costs generated from a corporate event.