Planning Budgets And Sponsorship

Setting Budgets

The budget is a quantitative goal which states the financial confines in which you are working. It is the target against which costings (the actual price you will be paying) will be measured. The budget may be given to you as part of your brief, or it may be up to you to prepare your own budget and to justify the costs to your superiors. If a substantial amount of the costs are to be met by sponsorship, you will need to prepare a plan as to how you are going to achieve it. All of this needs to take place before you start your event countdown.

Setting Budgets

The budget is a quantitative goal which states the financial confines in which you are working. It is the target against which costings (the actual price you will be paying) will be measured. The budget may be given to you as part of your brief, or it may be up to you to prepare your own budget and to justify the costs to your superiors. If a substantial amount of the costs are to be met by sponsorship, you will need to prepare a plan as to how you are going to achieve it. All of this needs to take place before you start your event countdown.

Looking At The Costs

Although the budget should be set at the start of the project it can be altered and monitored as you proceed. The combined costs must fall within your budget figures.

Fixed Costs

Fixed costs are those costs that will be encountered irrespective of the number of delegates who may attend. For example:

brochure printing
brochure design
organisation fees
speaker fees
travel
accommodation
room hire
press and publicity
advertising
mailing house
signs.

Variable Costs

Variable costs are those which vary according to the number of delegates who attend, e.g. catering costs.

Income

Income may come from different sources and can also be categorised as fixed and variable.

Fixed Income

Income that is not dependent on the number of delegates.

For example:

sponsorship
contribution from organisation.

Variable Income

Income that is not fixed. It may for example vary according to the number of delegates purchasing tickets and the number of exhibitors booking stands.

Fig. 11. Example budget – projected.

Fig. 12. Example budget – actual.

Value Added Tax

Value Added Tax (VAT) will be added to many costs of goods and services supplied and will be added to the ticket price if your organisation is registered for VAT. For the purpose of the budget the VAT should not be included on any of the entries so that a true figure is seen. The exception to this rule is if the organising company or organisation is not VAT registered, in which case they will not charge VAT on the ticket sales and will be unable to reclaim VAT on expenditure so the entire cost will need to be met. To find the VAT content in a cost, divide the cost by 47, then multiply by 7. For example, £10.00 ÷ 47 × 7 = £1.49 (rounded up) (so long as VAT remains at 17.5%).

Breaking Even

A break-even point is the point at which the conference makes enough income to cover the fixed costs. If the conference is income-generating it is important to know what this figure is so that you have a quantifiable goal to aim for. To find the break-even point, see Figure 13. Further details on practical budgeting can be found in Managing Budgets and Cash Flows (How To Books).

Fig. 13. Finding the break-even point.We can see that 55 tickets need to be sold to break even to meet the fixed costs of £1,750.

Insuring Against Disasters

The thorny issue of insurance should be addressed and a management decision made as to whether or not to take up one of the specialised insurance policies that are available. No matter how hard we try, some things really are beyond our control, such as the weather, rail strikes, terrorist activity, etc. In instances where conferences are drastically affected by these things, adequate and appropriate insurance can make the difference between an inconvenience and a financial disaster. Policies can be taken out to reimburse organisers for a range of mishaps, including: