“How to create an event budget” is a common query. Event budgeting is the #1 challenge for nearly half of event organizers. It makes sense—the endless Excel sheets, trying to fit everything in without upsetting the numbers, deciding where to cut costs and where to spend more.
The entire process can be difficult for businesses and event planners alike. However, you can simplify your event budgeting process by following the guide below.
Estimating Your Event Budget
Of course, step #1 is to set your budget. Typically, three main things determine event costs:
- Business size
- Type of event
- Event scope
Let’s go through each of them individually.
1. Business Size
How large is your business? As with any other financing, you must derive your event budget from your total revenues. Events are certainly a marketing effort, so you can categorize them as such. In fact, events tend to be highly effective at generating sales and leads.
As a startup, the “U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing and advertising if you’re doing less than $5 million a year in sales and your net profit margin — after all expenses — is in the 10 percent to 12 percent range.”
Out of your 7 to 8 percent set aside for marketing, use your business’s marketing strategy as discretion to determine how much you will spend on event marketing. Consider the following two factors as well.
2. Type of Event
Do you have to rent a venue for your event? You will have to expect to rent a location with events that involve audiences, such as panel discussions, product launches, and seminars.
Larger-scale events such as conventions, trade shows, or fairs will definitely drive up venue costs. However, your own office building can be a free place to host smaller events like parties, meetings, webinars, and live streams.
Live streams call for additional video production costs. Meetings or company parties may need catering. Other events may require other event staff and crew. Define your event, then consider or research what types of costs to expect.
3. Event Scope
Even after you have narrowed down your event type, you still need to determine its scope or size. A press conference, for example, could have ten attendees or hundreds of them.
You can estimate your event scope from your current social following and brand loyalty. How many customers do you have? Who will you promote to? Of course, the most accurate way to estimate the number of event guests is to require registration or RSVP.
Set a goal for attendees, but be prepared for any size of event. The more people come, the more the costs spike up. More guests means more potential sales and leads, though!
Set a Number
Once you have considered the above three factors, set a budget for your upcoming event—either a number or a percent of your revenue. However, expect to adjust your budget as you move forward in the event planning process. When learning how to create an event budget, you’ll come to understand that flexibility is essential!
How to Distribute Your Budget
One strategy for how to create an event budget is to prioritize each need in your event. Let’s look at common costs of a business event:
- Tech crew
- Video production
- Staff & administration
If you can think of any more specific costs for your event, add them here! Then, prioritize each list item. This gives you a clearer focus of where you want to spend your money and where you can cut costs.
If your venue is set-in-stone, then you do not have to negotiate this area of your budget. If you want to go minimal on decorations, then this will open up more of your budget for marketing or catering.
Set a certain percentage or dollar amount for each category of your budget. Consider creating a spreadsheet with your budget for each need.
Budgeting Troubleshooting: How to Prevent Stress
The best way to save yourself from event nightmares is prevention! Sometimes, your event budget doesn’t go as planned. Follow the tips below to prevent the worst case scenarios.
When You Go Over-Budget
Overestimate your costs for each category so you are not surprised when additional costs come up. If you almost break your budget, use the experience as a learning opportunity. Take note of what you over-estimated and what you under-estimated.
Use this plan to prepare for next time. Consider tying back some of your other marketing campaigns to help compensate for your event marketing costs. One key component of how to create an event budget is learning from your budgeting mistakes and preparing for next time.
When Your Software Acts Up
Sometimes, budgeting software or spreadsheets just aren’t reliable. Any paperless endeavor risks technological malfunctions. Your event budget software or spreadsheet may lose your data, miscalculate, or crash.
To prevent this from happening, store your budget on a cloud. Services like Google Sheets save your data so even if it accidentally erased, you can look at the spreadsheet’s editing history.
When Nobody Registers for Your Event
No attendees means no revenue. Requiring registration or RSVP for your event can ensure that you have a list of attendees far in advance. Free events are great, but adding a price to your event ticket can add security and obligation to your guest list.
Do not make many plans for the actual event until you see a response from your audience. If no one signs up for your event after a few days of vigorous marketing, put a hold on your plans.
Instead, check with your team to rethink your event. Are you sure you’re creating an event that will interest your target audience? What could you do to make your event more appealing?
When Your Marketing Plan Fails
Even if you have a sufficient number of attendees, you can still generate zero leads and sales if your marketing plan goes awry. First of all, make sure your event is as engaging as you say it will be. Greet your potential leads personally and create contacts. Instead of speaking down to your audience at your event, encourage them to get involved.
Hiring additional help can save you time and money, all while guaranteeing event marketing success. Valoso is the perfect resource for any event marketing need. We can help you learn how to create an event budget and master your marketing strategy.
When creating an event, always remember to take a deep breath! Don’t get overwhelmed by the thought of budgeting, prioritizing, and organizing. Instead, stop wondering how to create an event budget, and instead apply the tips above!
If you need help with event marketing, Valoso is your team. Simply visit our homepage to find all the resources you need for premium event marketing and video production.