If you follow this Budgeting Tool system you can better predict whether your event will be profitable or not. It will also allow you to model different pricing structures and look at some "what if" scenarios based on specific revenue or expense conditions. It doesn't matter whether your event is small or large, simple or complex. The tool works the same for each.
Here are some instructions on how to use the tool. But first, download the Event Budgeting Tool here.
- Only put your data into the Yellow Shaded Cells. The unshaded cells contain formulas. Leave those alone.
- Don't forget to include the hotel ++ ("plus, plus"), which is the service fee and tax added to certain hotel expenses. It is usual for a meal priced at $20 to actually cost $25.20, with 18% service fee ($3.60) and 8% tax ($1.6) added on. Use the $25.20 as the meal price to be most accurate.
- Credit card fees may either be estimated as a fixed cost, based on 3% of your total revenue which is likely to be paid by credit card, or as a variable expense, based on the estimated number of people who will pay by card (times) 3% (times) the average transaction cost. I usually go with the simpler fixed cost model.
Instructions by Section
PART 1 – FIXED EXPENSES
- In this section, enter all of your event expenses (one per line) which are not dependent on the number of attendees. This could include things like A/V, room rentals, printing, etc. These prices remain generally the same whether you have X or Y attendees. If you need extra rows, simply add them above the Total line.
PART 2 – VARIABLE EXPENSES
- Enter here all the expenses which are variable based on number of people. Examples include meals, rounds of golf, gifts/giveaways, etc.
PART 3 – REVENUE*
- Line 61: Expected Paid Attendees
- Enter here the total number of people you expect to attend which will pay something. We will take into account the different price points of attendees later. Just enter a total here.
- Line 62: Expected Comp Attendees
- Enter the total number of people that will not pay any attendance fees. This includes people whose attendance is included as part of their exhibit or sponsorship. They are considered comp in this calculation
- Line 66: Confidence Factor
- Enter here, as a percentage, your confidence in your Total Expected Attendees (Line 63). If you're budgeting for a new event, likely this number will be low. Events with some historic data should have a higher number. Take into account things like timing, competing events, location, market conditions, etc.
- Lines 67, 68, 69: Non-registration revenue
- Enter here all expected non-registration revenue. Include hotel rebates (in "Other") if applicable.
- Line 70: Budgeted Profit
- Unless you plan to make money, you won't! My model is that an event should be profitable by the greater of either 1) 10% of registration revenue or 2) the total of all exhibit and sponsor revenue.
- Line 71: Suggested Rate/Attendee
- With everything entered, including budgeted profit, this is the registration rate you need to charge every attendee to reach your desired financial target (profit). If everyone pays, and is charged the same amount, stop here and set this as your registration rate. If not, continue to…
PART 4 – REVENUE TESTING MODEL
- Here you may enter the "what if" scenarios of pricing. Some people may pay $0, others (should) pay more than the suggested rate per attendee above to offset the comps. Include member/non-member and early-bird/regular/late options if appropriate. Estimate the number of each at each rate. Make sure that the total number of attendees on Line 90 equals the number of attendees on Line 63.
- Lines 93-97 will give you the financial results, based on your assumptions above. You can then go back and see the impact of various decisions (adding another lunch, raising/lowering the attendance rate, cash vs. open bar, etc.) Making any adjustments in the expense or revenue assumption sections flow through to the final answer.
* Line numbers will change if rows are added or deleted.