Have you ever run out of money before you’ve checked everything off your event planning list? It’s a nightmare – but you never have to feel that way again. In 2023, it’s time to solve budgeting woes once and for all.
Setting a budget is one of the most important – and most complex – parts of the event planning puzzle. It might seem easier to set an overall number and start signing vendor contracts, but that strategy has the potential to leave you stressed and over budget as the actual event date inches closer. Instead, employ a step-by-step approach that covers every detail. It may seem overwhelming at first, so we’re here to help. Let this list guide you through each of the four budgeting phases, and you’ll set yourself up for financial success for every event on your calendar in 2023!
Some people treat budgets like a word cloud exercise, listing (and paying for!) each expense as it comes to mind throughout the process. Instead, you should consider your event goals before you ever allocate a single dollar.
What is the goal of this event? Build a strategy around your desired outcomes, and then you’ll be able to create a budget that aligns with your key performance indicators (KPIs). At Redstory, event strategy is always the first step in our planning process. We establish data pillars and apply behavioral science to make sure that our event strategies work for the intended audience and goals. If you want a partner in building fail proof 2023 event strategies, we’d love to help.
Before you dive into the details, establish your bottom line. How much money can you spend on this event? This may seem like an obvious point, but many events begin their plan with a keynote speaker or specific venue. It’s okay to keep those desires in mind, but starting with a number instead of a place or person enables you to work within established parameters from the start, which will save you a ton of stress.
Once you’ve determined a total, make a list of your high level expenses. These will be supplemented with specific line items later in the process, but it’s important to identify your most significant costs up front. Potential high level expenses include:
What you hope to get out of your event is a great indicator of the financial investment you should put into it. Marketers often rely on the 5:1 ratio as a general rule of thumb for expected ROI. Exceptional ROI would be 10:1 – so we often encourage our clients to aim in between those two statistics with a 7:1 goal, especially if you have a successful history with the event already. For example, if your event is a marketing event focused on product sales and you hope to influence $500,000 in gross revenue, don’t expect to spend any less than $50,000. You should probably expect to invest closer to $100,000 in many cases.
Whether you’re confirming your budget plan with your own team internally or with stakeholders and clients, it’s important to secure the “all good” signal before you start signing contracts with speakers, vendors, and venues. While you’re still in this high level phase, you can adjust certain categories before going over budget. If everyone approves the overall budget, it’s time to move to phase two!
At this point, you’ll list each individual expense that falls under a high level category. For example, your “Marketing” category could now include:
And your “Food and Beverage” category could list:
As you identify your specific needs, you can begin to secure quotes from potential vendors. Reach out to vendors as early in this process as possible! By working ahead, you’ll have a larger selection of available vendors to choose from, and you’ll have time to compare quotes and find the best fit without making a rushed decision.
Now that your potential expenses are turning into invoices and payments, it’s important to keep track of things. Don’t make the critical mistake of entering all of your expenses at once – you could go over budget without realizing it until it’s too late.
As you choose vendors, book speakers, and sign venue contracts, note those exact costs on your budget spreadsheet. This will give you a clear picture of where your money is going, and you’ll be able to spot areas that are creeping toward being over budget. You can also find areas that do not require as much funding as you originally estimated, which could help you reallocate money without changing your bottom line.
If you find that your line item list leaves little room for unexpected expenses or changes, your event budget could be in trouble. We recommend leaving at least 10% of your budget in a contingency line item at first – the world of event planning can be unexpected, and you’ll be grateful that you have funds to use if an unforeseen cost arises.
Don’t throw your budget template away after the event ends! After every invoice has been paid and you’re back in the office, you can turn your numbers into valuable insights for future planning. Where did you overspend? What line items came in under budget? Did you leave too much in your contingency budget, or not enough? Highlighting your savings will help you create future budgets, and learning from overspends will eliminate mistakes down the road.
As you begin to plan, refer to this list so you can set yourself up for financial success for every event on your calendar in 2023!