The Ultimate Guide to Budgeting For Your First PAID Event
So you want to host a live event, but you’re super freaked out about the money part of it?
How do I make sure I’m not forgetting to budget for anything?
How can I make sure I don’t forget about taxes and fees?
How do I figure out my “break even” number of tickets?
If I charge $100 less for early bird tickets, what will that do to my bottom line?
Listen, I know that the money stuff of events is scary, particularly in an online world when it seems like everyone is making ONE MILLION dollars on course launches and passive income products.
Events can be scary, especially because there is such a high upfront initial investment, but if you’re nervous about knowing how it’s all going to shake out, I want to let you know that:
a) you’re definitely not alone.
b) today’s video is going to walk you through my exact process for creating a sound event budget before you spend a cent.
Watch ‘The Ultimate Guide to Budgeting for Your First Event’
Before you get started, it’s important that you have the following two things sort of dialed in:
1) Your events agenda
This is important because if you haven’t sorted out how many days you’re hosting your event or whether or not you want to feed people lunch, then you’re not going to be able to create an accurate picture of how much you’re going to spend.
Related: How to Create Your Event’s Agenda
2) A basic budget framework
You want to make sure that you have a really great template in order to add up all your outflows (expenses, all your “freebie” tickets that you’re paying for, etc.) as well as all your inflows (ticket sales, sponsorship dollars, in-kind sponsorships), and that calculates break even numbers and profit margins. Fortunately, I have one for you!
Want the budget template from the video? Fill out the form below and you’ll get access to it!
The Three Most Important Things in Your Budget Template
1) The P+L (Profit + Loss) Statement: The main place you’ll track expenses and monitor your projected expenses vs. your actual expenses.
2) Sponsorship Dollars Spreadsheet: If you’re engaging sponsors, you’ll want to have a place to track any financial or in-kind contributions. This will help you understand your full financial picture.
3) Payments Made Spreadsheet: This is so that you can track any payments that you actually make to vendors so that you can reference it later if someone asks. The amount of times vendors or other service providers on events will remind me about an invoice I’ve already paid is at least 1 time per event, so make sure that you’re tracking payments in your spreadsheet!
Fixed Costs vs. Variable Costs
It’s important to realize that there are fixed costs (costs that don’t change regardless of how many people show up like your venue or your photographer) and variable costs (things like swag, food, beverage, and anything else that increases in cost with every additional ticket that is sold), and that the way that these two things affect your bottom line is a little bit different.
Variable costs immediately affect your bottom line because as soon as someone buys a ticket, you’ll immediately need to set aside a specific amount of their ticket cost for food, swag, and beverages. However, looking at fixed costs, when someone buys a ticket, a percentage goes toward venue costs, content, speaker fees, etc. AND the percentage decreases per ticket every time another ticket is purchased.
Categories of Spend to Consider
In the video above, our P+L (profit and loss) statement is broken up into about 10 categories.
Venue: Anything to do with venue is sorted here, including venue enhancements such as rentals and decor. MOST of the items in this category are fixed costs (with the exception of chairs or dinnerware).
Catering: Food and beverage mostly, but also service charges, tips, taxes, and gratuities. Most of the costs in here are variable costs, except for service charges and labor.
Audio Visual: These are things like screens, projectors, sound costs, and the labor fees that go along with hiring out this service. A/V costs are primarily fixed costs.
Content: If you’re hiring a photographer, a videographer, or creating any sort of content AFTER your event (highlight video reel or even videos of your conference’s sessions), you’ll need to keep in mind the cost of hiring labor for these roles.
Speaker Costs: While not all events have speakers, if you do have them, you have to consider honorariums, travel costs, and lodging costs (ps In my course, Events That Convert, I talk all about how to create a great speaker expectations contract that helps you cut down on your speakers’ costs).
Transportation: Are you moving people from one location to another non-walking location? You’ll probably have to rent a bus or at least some shuttle services to help out with that. Additionally, if you’re paying for your staff’s flights or transportation to the event, you’ll need to add those costs here.
Labor: For most of my events, the biggest labor cost is the event planner and your events team. However, if it’s only YOU running the event, you’ll need to add a number in here that stands in for your “fair wage” for planning the event. One of the BIGGEST mistake people make is not including a number here to keep their budget more profitable, but you’re doing a lot of work and you need to be paid for it — and if you aren’t getting paid for it, you need to adjust your budget.
Miscellaneous: After I’ve planned out the majority of my budget, I add about 3%-5% for miscellaneous costs. To be honest, we haven’t used a lot of the Miscellaneous budget, because we’re so dialed in with the rest of the budget. However, it’s nice to have a cushion in case you want to make any last minute upgrades to your event.