by Cheryl-Anne Sturken | December 01, 2006

Simply put, a budget is a list of operating expenditures and their costs, offset by any income, for a fixed period of time. In practice, however, a well-designed budget is the most critical tool in a meeting planner’s arsenal. Not only does it help track and manage the meeting’s revenues and expenses, it creates accountability, provides financial control, encourages delegation, enforces timelines and ultimately results in accurate historical data, which is critical for planning the next event.

“Most people think a budget is a long list of things that need to be done. That’s a checklist,” says Carroll Reuben, CMP, CMM, owner of Rolling Hills Estates, Calif.-based Meeting Excellence and an industry speaker on the topic. “A budget is a fluid, working document that is indispensable to a well-managed meeting.”

Getting started

If the event is an annual one, the meeting planner will have some sense of income and spend, provided that there is previous data to go on. For the first-time event, however, the budget can begin to be assembled only after a number of key items have been nailed down and a timeline for the event has been established. To begin:

Know the objective. This ultimately determines where the dollars will be spent. For example, if networking with clients is the meeting’s ultimate goal, then the venue, along with food and beverage, will be the major expenditures. On the other hand, if it is a training meeting, rental of meeting rooms and an audiovisual presentation possibly will be the largest expenses.

The meeting’s objective also establishes whether the event will generate any income. An association’s annual conference usually is a major revenue generator, and managing that income becomes an important factor, because it will influence the budget’s final profit-and-loss statement. Most corporate meetings, however, are mandated by management and deemed a necessary operational expense. As such, there will be no income section to the budget, and therefore no profit-and-loss statement will be required.

Know the attendees. “The biggest mistake most planners make when it comes to budgeting is they immediately start assigning pricing,” says Bonnie Wallsh, CMP, CMM, owner of Charlotte, N.C.-based Bonnie Wallsh Associates and a regular speaker on the topic of budgets for several meetings industry associations. “Budgeting comes only after you’ve figured out where attendees are coming from and who they are. If everyone is a chief executive officer or chief financial officer, then you know you need to have better quality housing and F&B than, say, a training session for employees. Likewise, if you are hired to plan a meeting and you see everyone is flying in from the Midwest, then hold the meeting there instead of having heavy transportation costs eat up the budget.”

Analyze the data. By its very nature, an event’s historical data provides benchmarks for future planning. Of course, “If there are things that didn’t go well at the past event, any changes made to correct them, say hiring a better band, might affect pricing and the whole budget,” notes Jill Moran, CSEP, founder of JSMoran & Associates, a Boston area independent meeting consultant and author of How to Start a Home-Based Event Planning Business (Globe Pequot Press, 2004). “The final budget you come up with should fit the expectancy of the meeting.”

Among the questions a planner should keep in mind when reviewing a meeting’s data: What were the final numbers for F&B functions, room block pickup and no-shows?

Pay special attention to data on the final night banquet, which actually can be a revenue generator. The banquet usually is included in the registration fee, so for every person who elects not to go, that money can be applied elsewhere. By such accounting, “One association generated $50,000 in one year alone,” says Wallsh.