5 Tips To Budget For An Event
Budgeting is no easy task for any event, big or small. There are possibly thousands of moving parts that can cost you money that you don’t even know about. If you’re not aware of them, they are possibly the items that are slowly chipping away your budget. Therefore, knowing where every last bit of your budget goes can greatly help you to minimize cost.
Having a robust budgeting practice not only allows you to be rid of unnecessary expenses, but also increases your income, eliminates redundancies, helps choose the best venue, and improve management practices. Keep in mind that this practice is not a one-time thing. Instead, it is a way of approaching your financial decisions.
So with that, what are some of the budgeting practices that are best for your event?
Sunk cost fallacy – A cost that has already been incurred and cannot be recovered.
Essentially, the sunk cost fallacy can be seen in the form of “throwing good money after bad”. It is a dangerous place you don’t want to be if you’re an event organizer. If you forgot to track the expenses since the start, don’t worry, start now.
Starting early not only allows you to track every expense there is rather than overspending at first, it also grants you another leverage. This owes to the fact that you have the time to research and negotiate to get the best quotes possible.
Review and update your budget often
If you’ve been to at least a few events, you are well aware that unforeseen circumstances are almost a certainty. Because of this, there is simply no way of detailing all of the costs before the event. Therefore, on top of starting early with your budget, also allow for flexibility and adaptability.
By constantly updating your budget sheet with new information, you can re-adjust your following actions based on how much budget is left. That being said, if you notice your budget sheet sway too far away from your initial plan, it can be a red flag that there is a mistake somewhere.
Adjusting your budget sheet on the spot can be a challenge if you’re not experienced. But in doing so, you can easily identify the leaks and the pressure points before your event even starts. Often, this can be what allows you to cope with the major changes and worst-case scenarios.
Use historical data
Historical data shows you what has worked and what hasn’t. Not using historical data to plan your budget makes you vulnerable to making the same mistakes as you did on your previous events. It may range from getting quoted way above the market price to not being aware of certain significant costs. Take this with a grain of salt because every event manager has a different style of working.
It is easy to get caught up trying to negotiate your way into the best deals for your current event, but that doesn’t have to be the case. Go back to the data that you’ve evaluated and you won’t have to waste your time and energy. So if you want to make your next event even easier for you, make sure that you take notes about the best ways to approach a certain cost.
This goes to just about anything that is related to your event. From the decor through to the music and catering. In economics, part of maximizing profits directly relates to being able to minimize your cost. The lower your cost is, the higher your profits are.
The idea here is to go below your budget for a certain item. That way, even if there are add-ons, you still have some funds left to use instead of exceeding your initial budget. Even when you have the utmost confidence in a supplier, it still makes sense to have some “wiggle room” in case there is a miscalculation. We never know what items are going to fall through and what will stick, think of being conservative as a way to protect yourself and your event. If everything went smoothly, you’ll even have some leftover money that you can use to splurge on!
Get multiple quotes
When you’re planning on a big purchase like a car, would you only look at one or would you do your research and know what your other options are? I am guessing the latter would be a smarter choice. The same goes for planning an event. You never want to only go to one supplier to get your quote. You want to get multiple quotes from multiple suppliers. You might even be surprised by how widely the quotes can differ due to the uniqueness of what the suppliers might offer.
On the other hand, getting multiple quotes also grants you the leverage to negotiate the prices with other suppliers. Due to the specificity of this market, suppliers are usually hungry to secure a deal. This means that they’ll give you the most amount of things as long as they can cover their cost. You may be surprised how many things the supplier is willing to provide if your deal is big enough.
Bear in mind as well that the cheapest option is not always your best pick. Every single event has its own personality and the specific things that it needs. This is why there is no clear cut way to approach this. Take your time to find the perfect provider for your event.
Money plays a huge part in your event organizing. It is the determining factor of whether you are able to go for the most extravagant event or a rather low-key event. So plan that detailed, organized, and comprehensive budget sheet ahead. You don’t lose anything doing so, you’ll only be gaining the benefits of better allocation of your funds and a better ROI.
We hope this guide has helped you to gain an insight as to what you can do to get the most out of your money. If you want more details and help with your event, please leave us a note and our team of professional event organizers will get back to you!
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