Budgeting 101: Best Ways to Budget to Get the Results You Want
September 11, 2020
You are planning your next in-person, hybrid, or virtual meeting, but you don’t know where to start. We want to help! Let’s start by thinking about the budget. Here is your Budgeting 101 guide to getting the best results you want for your next meeting. There are four items that you will want to consider: Key Budgeting Steps, Budgeting Mistakes, Keep Budgeting on Track and Measuring ROI.
Key Budgeting Steps That Need to Be Taken
Step 1: Determine the Big Budget
What is the total amount that the company/organization is willing to spend on the meeting or event? Example, XYZ company dedicates $200,000 towards a conference.
Step 2: Determine the Expected Number of Attendees
It is best to be very realistic on this number. Using history from past events is helpful, as well as taking any current factors into consideration. We have seen clients over-estimate the number of attendees based on what they “hoped” they would have. Doing this caused big problems with the budget.
Step 3: Determine Cost per Person
Base cost per person on these numbers. $200,000 / 200 people = $1000/person budget
Step 4: Make a List
Make a list of ALL potential expenses and vendors that will be needed for a successful meeting. Remember for an in-person meeting items such as AV, security, any décor, signage and printing, airfare, etc. For a virtual meeting, items such as virtual platform, marketing, equipment, graphics, etc.
Step 5: Create a Working Budget
As suggestion, use Excel. With one column for the initial budget projections, and another Column for the “actual” expenses as they begin to take form. Since it’s a working budget, we make sure to include the date of the last update.
When used correctly, the Working Budget will help you identify any shortfalls or potential problems before they get out of hand. Numbers are your friend and you need them to make the best decisions and course corrections along the way.
Overestimate on Expenses, and under-estimate on Revenue. This approach allows my team to successfully achieve budget projections for clients. Nobody wants to go over budget.
Budgeting Mistakes That Could Be the Downfall of a Meeting
Mistake #1: Not completing the budget process mentioned above.
Mistake #2: Forgetting to add in all the taxes and service charges/gratuities for Food & Beverage, sleeping rooms, and other goods/services.
Mistake #3: Not keeping a full, detailed list of all revenue streams and ALL expenses.
Mistake #4: Forgetting to update the budget if the number of participants changes. This is especially important if participant numbers increase.
Mistake #5: When you calculate the F&B, spend the time to calculate the actual costs based on menu items selected for all meals, breaks, etc. PLUS any additional expenses (i.e.: bartender fees or carving station chef fees), the various taxes (food, liquor, etc), and the service charges which usually are 19-23%. or getting to do this means under-estimating the F&B costs by 25% or more…
Keep Budget on Track
What steps do meeting professionals need to take to make sure their budget stays on track?
MOST IMPORTANT TASK: Regularly update the budget (we do ours in Excel) with the actual costs that are coming in, and adjusting any changes in # of attendees, average airfare, etc.
Example: If the original meeting budget estimated 400 attendees, but management has downsized the invitation list to 200 attendees, you need to adjust the budget estimates and actuals accordingly.
TECHNOLOGY: Using a Project Management Software to help with remembering to send invoices and to pay the various deposits on time. Having said that, you don’t have to over complicate the process. The key is using tools and methods that will allow you to begin quickly and easily. This may be something you already use like Tasks and Reminders in Outlook combined with an Excel spreadsheet for the budget. Don’t over complicate this, or it will be another excuse to avoid starting.
Measuring ROI: Best Ways and Techniques
Each meeting or event may have a different measurement of ROI. Before holding a meeting, it’s so important to discuss and be very clear on what the meeting objectives are and how ROI will be measured.
If a meeting’s objective is to be a revenue generator for an organization, but the budget shows lower revenue, that data can assist with future decisions. An accurate budget will show where there were shortfalls in income, and overages in time and expenses. This review process will help inform better decisions in the future. (i.e. charging more for registration fees, or reducing expenses)
If this is a client appreciation event, then intangible items such as goodwill and increased brand awareness may be the objectives. For this situation, doing a post-event survey to get attendees’ opinions and feedback will give you a better idea of the ROI.