How to Build Event Budgeting and Pricing Strategies that Pay Off
Budgeting and pricing may not be the sexiest couple on the block, but they’re the dynamic duo that can make your event dreams become reality. Whether you’re running a nonprofit event or a profit-oriented consumer show, it’s vital to have a grasp of exactly how much money you need to bring your vision to life.
That’s where a budget comes in.
Planning ahead
Of course, the goal of your budget will vary based on the purpose of your event. Is your event designed to be profitable? You may need to cut costs to make the most bang for your buck. Are you hosting an event to thank sponsors or gain brand recognition? Then you may be willing to invest some extra money, even if you’re in the red. If you’re not trying to make money, but also don’t have any to spare, you need to balance the books to break even.
Once you know the goal of your event, the next step is to set expectations for how much money your event will spend and make. Before you start getting specific with the numbers, there are a few financial factors worth considering:
- Your marketing plan & expected ROI. How much will it cost to advertise the event? Are you willing to lose money on the event, or is your main goal turning a profit?
- Event financing. Where is the money coming from to put on your event? Do you have capital already set aside, do you need to find sponsors, or are you relying on ticket sales?
- Past experience & future forecasts. If you put a similar event on in the past, use how much it cost as a guideline. Also consider the economy now. If it’s strong, you may be able to anticipate more income; if it’s weak, consider bargaining more with suppliers for reduced rates.
The key is to be realistic in your estimates. And if you’re not entirely sure if you’re being too optimistic or simply sensible? Build in some leeway so you don’t end up in the red if a cost you didn’t anticipate pops up down the road.
Mastering the numbers
Once you have a grasp on the economic context of your event, it’s time to break out the calculator. Don’t worry, though — if you follow this easy acronym, you’ll become a M.A.S.T.E.R. budgeter in a minute:
- Measurable: A budget only goes so far if you don’t keep it updated. Be sure to have a line-item against each cost in your budget, because you can’t control what you can’t measure.
- Achievable: Be realistic. No matter how low-key your event is, surprise costs often sneak in last minute. Allow for a margin of error before you go into the red.
- Specific: Don’t just allocate a large amount of money for “food” or ambiguous “decorations.” Get the details nailed down early to be sure your amounts are as exact as possible.
- Time limited: Keep in mind the season of your event when planning. You don’t want to plan on a great deal on a venue based on their December rate, only to find out it’s way more expensive for your September event.
- Ends related: Make sure your budget keeps in mind your business priorities: profit or impact.
- Ranked: A healthy budget thrives on compromise. Know what’s most important to your event, so you know what costs can or cannot be cut for the bottom line. For example, if you’re hosting a con, a great venue may be a bigger priority than gourmet food.
If you’re still feeling overwhelmed, there’s always technology that can help. Apps like Super planner, Magic Plan, or Eventbrite’s partner DoubleDutch can help manage budgets and reduce costs.
Putting the budget in action:
Shop around to know the true value of the services you’re looking for, and ask friends and family if they know anyone who may give you a discount. Don’t be afraid to negotiate with vendors, or challenge them to deliver what you need within the budget you’ve set. But it’s also important to consider being flexible yourself. If you’re willing to change dates or menu, you may get a better deal from in-demand venues or caterers.
If you want to boost your bottom line without cutting costs, it’s time to look at your ticket prices. You may be surprised by the extra demand you can drive by developing a pricing strategy that considers:
- Using discounts to drive demand
- Offering VIP perks for added value
- Encouraging early purchases to better estimate revenue