November 01, 2000
Meetings & Conventions: Planner's Portfolio November 2000 Current Issue
November 2000 Back to BasicsPLANNER'S PORTFOLIO:

Back to Basics

By Martha Jo Dendinger, CMP


How to anticipate costs and keep spending from spinning out of control

While some annual meetings can be planned almost by rote, there are always those curve balls perhaps a celebratory gala or a fund-raiser for a local charity where even the fundamental step of budgeting can be a challenge.

The easy mistake is to assume that the formula is straightforward: X number of people for dinner at $X a head. Many other factors go into this equation. Three key points to remember:

  • Keep to the objective.
  • Realize that revenue and expenses are different from those of typical meetings.
  • Curb the temptation to add unnecessary items.
    Special events can help organizations achieve objectives in many areas, like promotion, sales, fund raising, morale building and recognition. Budgeting effectively begins with recognizing the true objective of the event.

    Too often, managers come up with the idea for a fabulous evening and then try to make it fit the objective. This backward approach succeeds only if the objective is not lost in the fireworks and excitement. Analyze the organization’s resources and history, and choose the best way to accomplish the objective.

    Financial elements vary, depending on the type of special event and whether it is public or private. Considerations include sponsorships, ticket sales, television and radio advertising, advertising revenue, concessions, donations and special giveaways.

    Additional opportunities for revenue are one major benefit of special events, especially when the objective is fund raising. The trick in budgeting is identifying all the major areas of expected cost. Aside from F&B, administrative expenses and staffing, costs for special events fall into four major categories.

    Operations. Costs arise that meeting planners might not know to ask about. For example, many states require permits to hold one-time events. Also, if taxable sales are transacted at the event, temporary sales-tax licenses might be required.

    Insurance also is often overlooked. Is the organization’s coverage sufficient?

    Venue. Many planners are used to negotiating free or reduced rental fees for meeting space. For special events, which often don’t require sleeping rooms, the organization will have to pay for space. Some facilities also demand a percentage of the proceeds or revenue produced at the event as part of their fee.

    Promotions. Getting the word out about a special event requires broader marketing elements than meetings do. Radio and TV advertising can be costly in both airtime and production. Barter deals are one way to soften the blow to the budget. Airtime can be swapped for tickets or signage, for instance.

    Talent. Entertainers charge quite a bit more than most speakers do. Plus, entertainers often contract for additional compensation in the form of dressing rooms with a stocked refrigerator or a percentage of ticket sales.

    Research all these elements, and get all the details in writing before signing on the dotted line.

    Often, adding a menu item, souvenir or other element to the event is tempting, especially when “it’s only $5 more per person.” Do the math $5 per person becomes $500 more for a guest list of 100 and $2,500 more for 500 people. Is the extra sizzle worth it? Does it help to accomplish the objective, or does it just blow the budget? A fancy menu only adds to cost; a menu with award winners’ names listed on it adds to the objective.

    Remember to consider trade-outs or donations when appropriate. Also, review the budget periodically to determine if the revenues and expenses are on target.

    Martha Jo Dendinger, CMP, is an independent meeting planner based in Atlanta.

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