Crafting Substantive Budgets: The Future Is Now
By Christy Lamagna, CMP, CMM, CTSM
This six-part series looks at budgets both personal and professional spending for planners. If you need to catch up, please follow these links.
Week 1: A planner’s friend: Tracking spend
Week 2: Where does all the money go?
Week 3: Mindfulness is the key to smart money
Week 4: Show me the money!
Week 5: Corporate event budgets
This week: The future is now
Crafting Substantive Budgets
Recently my team at SME was asked to create a line item budget for an event we’ve never hosted, at an international venue that has not yet been chosen, for an unconfirmed group of people who have not yet qualified for the trip but whose airfare needs to be calculated. (Rates won’t be published until the figures are due, so even if we knew where folks were flying from, we’d still be guessing on figures.) And once the figure is submitted, we’re expected to hold to it.
If it were you, would you be ready to dive in or dive under a pillow? Hold your head high. By the time you’re done reading this you’ll be diving in and knocking out professional budgets with confidence. Regardless of when the event is, there are some constants you can sketch out now. Start by walking through the event. How many days is it, how many meals will you be serving, will there be off sites, what are the ground transportation needs, how many guests do you expect, will there be production involved, giveaways, online registration?
What do you know about events of this type, that you’ve hosted in the past? Do you generally have welcome receptions? Dine-arounds? An awards event? If you have never hosted this sort of event, put in every potential variable you can think of. It’s easier to reduce a budget than it is to add to it.
Things folks often forget that you want to include:
- Contingency dollars for the on-site extras you’ll likely be asked to provide (think Polycoms and an extra 45 minutes at the party the CEO is thoroughly enjoying … )
- Staff and production crew Internet
- Power and rigging
- Delivery and box handling fees for both directions
- Storage fees for early-arriving boxes
- Room drop fees
- Business center fees
- Half-day rate for key executives (try to work that into your next contract’s concessions)
So how do you figure out what breakfast will cost for a meeting that has no date or destination? Rule of thumb: Prices rise 10 percent per year in strong markets, so given it’s a seller’s market, add 10 percent for every year out you’re planning.
Prices reflect your locations, too, so if you’re likely to end up in a first-tier city (San Francisco, New York, Chicago, Las Vegas) expect higher prices than other locations. The difference between costs for a gallon of coffee in New York versus Arkansas is significant.
If you have no historical data, hit the Internet and create a menu for a hotel of the caliber you’d use in a potential host city. Now you have a guesstimate for each meal. Don’t forget beverages, all-day coffee service and breaks. Once you get some experience, it’s as simple as working off past programs and adjusting up or down based on location and years out. It’s actually pretty simple.
From there, plug in some of the fixed costs: ballroom rental and setup (which I expect you to negotiate out during the contract process), production, registration setup (this may also have a per person cost depending on what vendor you use) staff travel costs, basic signage, etc.
By the time you’re done doing that, you’ll have a budget that has some real substance to it. More importantly, you’ve created something you can be proud to share. The more you create budgets, the more fun you can have challenging yourself to have your estimate come as close to the actual cost as possible, find new ways to save money and reduce the spend.
Want to join the conversation. Share your best budgeting story or cost avoidance tip in the comment box below, at @PlanYrMeetings or Christy at Christy.Lamagna@strategic.events or @SMEchristy on Twitter.
Tags: Crafting Substantive Budgets The Future Is Now, Budgets, Budgeting, Event Planning, Event Budgets, Event Planners, Strategic Planners, Strategic Events, Plan Your Meetings