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Preparation of Budget of an event

For a person new to the financial aspects of running an event, the planning of a budget may not be as easy as it first appears, since a great deal of information has to be collected which might not be obvious at the start. However, the time & effort put into careful preparation of a budget is extremely important to the success of the event.

The budget for an event may be no more complicated than a list of revenues & costs, or it may be vastly complicated. Either way, it has to be determined with the objectives of the event in mind. So, what is the financial objective? Is the event intended to make money or simply to cover its costs? If it is to cover costs, what is the total amount that can be spent, specified either by the clients or by the organizing committee?

Some Common Budgeting Mistakes • Ignoring objectives of the event when setting the budget. • Plucking figures out of the air before finding out how much the event is going to cost. • Not involving everyone concerned in the budget preparation & failing to identify the full range of costs accurately. • Being over-optimistic about the demand of the event or failing to find a venue with enough capacity. • Overlooking subsidiary issues such as costs of ensuring safety & security, tax etc. • Not having enough capital or start-up funds to get the event off the ground, given the need for deposits or advance payments of various kinds. • People spending money but not getting receipts or invoices so the money is unchecked & have no control evidence that they actually spent it.

Budget is based on: • Marketing projections. • General history of previous identical or similar events. • General economy & your forecast for the future. • Income expenses you reasonably believe you can expect with the resources available.

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