No matter what type of event you are planning to host, whether you are looking for profits or if it’s a fundraising event, you will always need an established event budget to make sure the event’s expenses don’t spiral out of control.
However, many event planners neglect to create an event budget, and not without its reason. Creating an event budget can be quite a daunting task, and it will only become even more overwhelming the larger and the more complex the event is.
While it may seem tempting to skip the budgeting homework and go straight into negotiating with your vendors, you are setting yourself for failure without a comprehensive event budget.
With that being said, in this guide, we will show you an easy, non-stressful way to create a winning event budget.
By the end of this guide, you’d have learned about:
- Event budget: concept and definition
- Key items to include in an event budget
- Best practices for writing a winning event budget
- A step-by-step guide to writing your event budget
- Actionable tips you can use to save costs
And more.
Let’s start this guide from the basics: what is an event budget?
What is an Event Budget?
A budget is, in a nutshell, a spending plan, an estimation of how much money you’ll spend, and a projection of much money you’ll make over a certain period of time.
Thus, an event budget is a budget we create to estimate how much the event will make and how much money you’ll spend to plan, host, and run the event from start to finish.
There is no one-size-fits-all, correct way to develop an event budget: event planners may opt to make a comprehensive list of all event expenditures, while others may choose to only focus on important categories. However, an event budget must be based on adequate research to make sure the event is cost-effective without sacrificing quality.
The main idea is that the actual expenditures of the event should not exceed the planned budget, regardless of the size and type of the event.
Anatomy of an Event Budget
As we know, even planning a small and simple event can involve many different variables and moving parts, and this is why estimating an event budget can be challenging with so much to consider.
While the actual expenditures that should be included in an event budget should vary depending on many different factors, here are the most important items that should be included in most typical event budgets:
1. Venue expenses
(note: can be skipped if it’s a virtual event)
For in-person events hosted in a physical venue, venue expenses should be the top priority item to be included in an event budget. These expenses should include the money spent on acquiring (purchasing/renting) the venue, but also other related and hidden costs like insurance, security, decoration, additional lighting, additional A/V equipment, heating, and so on.
2. Food and beverages
(note: can be skipped if it’s a virtual event)
How much will catering cost? Some venues will require you to use their catering service and may also have a set minimum spending. Food costs would depend on the number of attendees you expect to attend and the menu you are planning to serve.
If you are planning to host a virtual event, it’s also a common practice to send foods/beverages to the attendees’ homes as a part of the ticket package, so you can also plan this in your virtual event budget.
3. Travel and Accommodation
Not always, but you may need to cover the travel and accommodation costs for anyone who will attend the event, including speakers/talents/exhibitors. Estimate how much this will cost.
This is an often overlooked aspect when estimating an event budget and can be fatal since travel and accommodation costs can rake up quickly. Be honest and critical when estimating this aspect.
4. Staff and Volunteer Compensation
Determine how many staff members and volunteers would be required throughout the event planning cycle (from the initial planning to post-event evaluation) and how much the appropriate compensation is required according to how much time will be spent.
5. Technology Investment
As with any other field, nowadays, it’s normal to leverage technology solutions when planning and hosting an event. Consider technology solutions like event management software, virtual event platforms (for virtual events), marketing software, ticketing/registration platform, accounting software, and so on.
Carefully estimate how much you will need to invest in these technology solutions.
6. Marketing and Promotions
Don’t underestimate the importance of marketing in any event, even if it’s a charity/fundraising event. You’ll need a substantial amount of money to promote your event, and your marketing cost may take a significant percentage of your overall event budget.
Carefully consider how you are going to market your event, what tools you will use, which channels you’ll promote your event on, and estimate the expenditure.
Due to the number of marketing channels and tools available, it’s also possible to take the bottom-up approach: decide on a set amount of money you are willing to spend on marketing, and then make your choices regarding tools, channels, and tactics based on which can fit this budget.
7. Logistics
Evaluate whether you’ll need to invest in insurance, as well as special permits and contracts before you can run the event. Estimate how much all of them will cost.
As you can see, logistics costs will mainly depend on the venue choice, so you may want to make this estimation together with when you estimate your venue budget.
Preparing an Event Budget: Best Practices
Budgeting for an event isn’t always easy, and in fact, it can be quite a stressful process if you don’t know where to start. This is why it’s important to keep these best practices in mind when planning an event budget:
1. Prepare to make changes
Once you start budgeting, it can be tempting to strive for the perfect event budget from the get-go, but in truth, this approach can be counterproductive.
Instead, keep the mindset that your event budget doesn’t need to be set in stone, but you can always make revisions and adjustments along the way.
In fact, be prepared to make these revisions as often as needed during the whole event planning cycle, even during the D-day of the event and after the event, for evaluation purposes.
2. Strive to consistently improve your event budget
On the other hand, you shouldn’t approach your event budget with rigidity. Researching expenditures and comparing different potential vendors can take time, so you should make sure your event budget is versatile enough to accommodate the changes in the details along the event planning process.
Using an event management tool like Eventifier that allows for flexibility in budgeting can significantly help in this case, so you can easily make adjustments and improvements as needed.
3. Always plan for redundancies
A key consideration when planning any event budget is that no event will go 100% according to plan: your venue may suddenly become available a week before the event, your speaker may be stuck in traffic, and there may be an internet or power outage in the venue, among other situations you can’t control.
Always consider your plan Bs and plan Cs when estimating your budget. A general rule of thumb is to add around 15% to 20% on top of your estimated budget as a contingency fund.
4. Establish your budget as early as possible
Having an established budget early means you’ll have more vendor options and more time to negotiate with potential vendors. This allows you to secure the best deals possible for your event.
If you’ve already overspent on an item before you’ve established a budget, the event budget will essentially be useless.
5. Don’t be afraid to pay more for quality
You should not always strive to get the most affordable option for every item in your budget.
If more expensive vendors can help you in hosting a better event for your attendees, then don’t be afraid to do so.
Remember that your event budget is here to help you host a successful and high-quality event, not the other way around. Don’t compromise the quality of your item just for the sake of staying on the greens.
Planning Your Event Budget: Step-By-Step
In this section, we’ll show you how to approach your event budget in steps. These steps are designed so the whole event planning process won’t overwhelm you, and instead, you can build a winning event budget without the stress.
Let us begin with step 1:
Step 1: Setting up the foundation
Before you begin the budgeting process, figure out these key fundamentals:
- Your event’s objective: you cannot start budgeting for your event if you don’t really know what the event’s purpose and objective(s) are. Identify clear and attainable goals, and use these as your foundation when establishing your event budget.
- (If this is not your first event) How would you like to improve from previous events: look back on your previous event’s budget and performance data and analyze which was a positive investment and in which area your budget could be improved. Analyzing previous budgets can give you very valuable insights into how you should make the difficult decisions on today’s budget.
- Identify the must-have elements: The secret to a winning budget is knowing which item you should prioritize. Identify the must-have elements you’ll need to have in your event budget. Which items will contribute the most to the event’s success, and which can be considered lesser priorities. List your must-have items, and list the extras. This way, you’ll know which expenditure you can cut when needed.
- Research the current market: check out other events and identify your competitors’ approaches to their events. For example, research the going rate of catering within your area, so you can accurately estimate how much you should expect to spend. Try as much as you can to identify the standard cost of every critical item in your budget.
Step 2: Identify your event’s unique needs
Next, identify the high-level details of your event so you can also figure out your event’s critical needs, including but not limited to:
- What type of event you are going to host
- The event’s main purpose and objective(s)
- Will this be an in-person, virtual, or hybrid event
- How many attendees you are planning to attract
- Speakers/exhibitors/talents/presenters
- Target revenue (if it’s a for-profit event)
- Potential sponsors to pursue
Based on these high-level details, you should be able to start estimating how much money you would need to spend to host this event.
Consider your funding sources, including external investors and sponsors. It’s best to design your event budget around how much fund you’re sure is going to be available, and not the other way around (deciding on a number and then attempting to secure sponsors.)
Step 3: Create your high-level budget
Based on the foundations you’ve set in the previous two steps, you can start listing the high-level items you’ll absolutely need to include in your event budget.
If you can, go ahead and make this a comprehensive budget and include as many items as you want. However, start by listing the high-priority and especially the must-have items.
While every event is unique and the items considered must-haves may vary between events, here are the typical high-priority items in most events:
- Venue expenses (for in-person and hybrid events), including related costs like insurance, logistics, and decoration, among others
- Catering (including rental of cutleries, etc.)
- Equipment (i.e., A/V equipment, live streaming equipment) and furniture rental
- Marketing collaterals (signage, branding items, posters, etc.)
- Staffing compensations
- Travel and accommodation costs
- Marketing and promotion expenses
- Technology solutions (registration software, event management solution, virtual event platform, etc. )
Start researching and estimating the costs for each of these items as soon as you can, and you may want to share this early budget with important stakeholders. You’d want to get the buy-in of stakeholders as early as possible so you can move forward.
Step 4: Detailing your expenditures
Now that you’ve established a strong foundation for your event budget, you can start detailing the items.
This step will consist of several sub-steps:
1. Inquiry and negotiation with prospective vendors
Create a shortlist of potential vendors for each item on the budget.
You can start with your must-have items first and start contacting these vendors to get quotes. Based on these quotes and other information you might’ve learned when contacting these vendors, you can start narrowing down the shortlist to just 2 or 3 vendors per item.
Start negotiating with these vendors, and update the budget accordingly if you’ve lock-in the actual expenditure.
2. Detailing each item
Most high-level items in your budget can be expanded into more components, and you can start expanding the budget to include these items:
- Detailed venue expenses: finalize all expenditures related to the venue: security, insurance, housekeeping, logistics, and so on.
- Food costs: you may need to include tips and other add-ons to your overall budget, up to 30% of the initial costs. Keep in mind that some catering may require you to use their catering, and they might have a set minimum spending.
- Travel and accommodation: carefully list all expenses related to travel and accommodation. Fuel, insurance, toll fares, trailer rental, shuttle rental, and so on.
- A/V and heating equipment: whether you’ll need to rent additional equipment on top of what’s available at the venue.
- Decoration: evaluate and list all costs related to decoration, including installation costs and other potential hidden costs.
- Talent: list all costs related to your talents (speakers, presenters, entertainers, etc.)
- Marketing: include production costs like signage printing, swag/gift bag production/procurement, etc.
3. Negotiate and fine-tune
As you continue detailing the event budget, continue contacting potential vendors on your shortlist to negotiate the best possible price. You’d want to negotiate and narrow down your list of potential vendors rather than having to contact all potential vendors at once, which may skew your judgment.
Lock in vendors as you see fit, and don’t forget to put all details into written contracts. Fine-tune your budget little by little until you finally get a finalized list of items, and you can move on to the next step.
Step 5: Finalizing your budget
At this point, you should’ve signed most if not all contracts with your chosen vendors, and probably you’ve started paying vendors (meaning, you should update your budget with an actualized price.)
In this step, we have two main focuses:
- Updating your event budget with the actual price
- Ensuring your event stays within budget
Actualizing your budget
On your event budget spreadsheet, add a column for “actual spending” if you haven’t already.
As you finalize deals and sign contracts with your chosen vendors, update the sheet with your actual expenditure while carefully comparing it with your projected spending.
It’s normal and totally expected if some of your expenditures exceed your projected spending, and in some cases, you may have a good deal and can secure items below your projected spending.
Ensuring your event stays in the green
At this stage, you may be required to make some hard decisions. If too many of your items exceeded their projected spend, then you may need to make compromises on other items.
This is where your contingency fund comes in.
If you’ve followed this guide, you should have set up to 20% of your event budget as your contingency fund. If some items exceed their projected budgets, you can use the contingency fund to cover the cost; this can help keep your overall budget stays in the green.
However, keep the habit of informing your stakeholders and getting their approval before using your contingency fund, so they can stay aware of the extra expenses. Doing so can help you think extra carefully before dipping into this emergency fund to control your expenses.
Step 5: Control extra expenditures during the D-Day
By now, you should’ve finalized most if not all of your budgets, and it’s finally time to run the event.
It’s perfectly normal and expected for your event to require additional expenses during the D-day due to emergencies and surprises, and again, this is what your contingency fund is for.
What you should do in this step is to carefully monitor your D-day expenses, accurately record all additional expenses and update your event budget accordingly.
Step 6: Finalizing, settling, and evaluation
Congratulations! By now, you should’ve finished hosting your event, hopefully with success.
Yet, your job regarding the event budget is not yet finished, and there’s one last step to do. Fortunately, this step is relatively simple.
There are two main objectives of this final step:
- Make sure every detail is included in the finalized budget (for both income and expenditure items)
- Make sure you’ve settled all financial obligations and list all payables
Budget evaluation
Evaluate and analyze every single item, especially the differences between actual spending and your projected spending.
There may be items on which you’ve spent less than your projection, which in most cases is a good thing. Identity these savings, and you might want to point out these savings when presenting the event’s evaluation report to stakeholders (and sponsors.)
However, evaluate whether you are sacrificing the event’s overall quality with this “saving,” which may help you in planning your future events.
On the other hand, evaluate items on which you’ve exceeded the projected budget. Evaluate the reason: have you simply underestimated this item’s cost? Any hidden and surprise costs you haven’t expected? A vendor suddenly increased its price?
Identifying the reason(s) you’ve gone over your projected budget can provide valuable insights into how effectively you’ve managed the event budget. Later on, you can use these insights when planning another budget for your future events.
Identify your total expenditure
After you’ve made sure you’ve recorded all expenses and income, calculate the total expenditure of your event.
If you are using an event management solution with built-in budgeting like Eventifier, then this should be a very simple process. Yet, even if you rely on a standard spreadsheet, this should be a simple process as long as you’ve recorded everything.
Knowing your total expenditure will be useful when planning future events, and you may be required to share this number with your stakeholders and sponsors in your evaluation report.
Conclusion
If you don’t know where to start, creating an event budget can be stressful and confusing.
Yet, even if it’s tempting to do so, you should not skip the budgeting process and go straight to negotiating with vendors, which is a recipe for disaster.
Above, we’ve shared some actionable tips that are easy to follow, as well as a step-by-step guide to creating a winning event budget from start to finish.
By following this guide, you should be able to start creating a comprehensive event budget in no time, as well as keeping track of your spending to help your event stay on budget.
