(This post is part of a 5-part series. Check out the overview if it’s your first time here.)
Whether you’re throwing your event simply for fun, or whether you’re doing something for your business, you’d be crazy not to worry a little about the dollars.
There are some known costs that you will have to keep an eye on, like:
- Venue costs – mostly rent
- Staff – door, servers, bar, DJ, clown, firebreathers, etc.
- Food/beverage – snacks, entrees, dessert, beer/wine/liquor
- Setup/equipment – stage, lights, sound, photography
- Other stuff – miscellany
As well as some sources of cash, which in most cases are less known than the costs:
- Ticket revenue – sell tickets in advance or at the door
- Sponsorship dollars – Let companies sponsor in exchange for advertising and exposure
- Debt/finance – If you know that the above is coming but need the money now, you might bridge the gap by borrowing
And of course you should negotiate hard and hustle like crazy to push down costs and pull up the income.
But what happens when things don’t go to plan?
Sponsors pull out. Ticket sales don’t fill out. DJ gets greedy. It happens to the best of us — even to the pros.
Judy Allen, event planning guru and the author of several books including Event Planning The Ultimate Guide has a lot of experience with people messing up their financial plan. She says that at a high level, you need to know what an event will cost if no sponsorship dollars materialize — that happens with so many events all going to the same companies for sponsorship dollars. Ideally, the revenue from tickets should cover all costs and make money if no sponsorship dollars come in at all. That way when you do get sponsors, it’s all cream. Many non profits make the mistake of not leaving enough lead time for corporations to go through the decision making process around which non profits and non profit events they will be choosing to align themselves with and sometimes those dollars are assigned a year out or more. This = sad people at the nonprofit.
The best planners have flexible costs that can scale up or down as the money comes in. Kelsey Recht of Instevent understands the importance of flexibility in the plan. She says there are event spaces for every budget, so if you are on a tight budget go for an off day or no minimum space. Although the general rule is people will pay for a good event, you have to give them something in return e.g. free drink, light food. Payment also decreases attrition. On the negotiating side, find out what type of venue or supplier you want and consider their down times to get good deals. For example, LES bars will give great deals on weekdays. Midtown bars are great weekend party destinations.
When Rebecca Zhou was putting together the plan for Raise Cache, she wanted it to be epic. And it was. Everything from the venue selected to the layout to the lighting and the snacks came together perfectly. The plan, however was infinitely flexible.
While still collecting sponsorship, she had a forceranked list of the venues she could pick, their costs, and how many attendees each one would support (as that would affect ticketing revenue as well). Once decided on the spot, she had allowances for nuanced flexibility. At any dollar amount, there was a specified number of lights, number and type of speakers, cases of booze, arrangements of furniture and more. This way, if she had come a little short of the goal, the team wouldn’t need to start thinking then about what would get cut — just find the right line in the spreadsheet and the answer would be there for them.
So you’ve picked a place, got some interest, and sold some tickets. Additionally, a solid financial plan is critical not only to a profitable event, but also to keeping your team in line — the topic of the final post in this series.
(Note: This post is part of a 5-part series on events and party planning. Jump directly into a subtopic here)
- Its all about the CUSTOMERS, baby. Venue selection & the Deal.
- This is more INTERESTING than whatever else you’re doing.
- Pound the PAVEMENT. Sell your heart out.
- More MONEY, less problems. Keep your event ROI-positive
- Event as a startup. TEAM matters.
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My many thanks for the superstars who helped me pull this together:
- Judy Allen – event guru and author of 10+ books, including Event Planning The Ultimate Guide
- Rebecca Zhou – Hackstar, UI/UX designer and self-taught event planner extraodinare behind Raise Cache
- Kelsey Recht – Founder and CEO of Instevent – making event planning easier through expertise and technology
- Gina Jagtiani – Veteran event planner in NYC and New Orleans, Founder and CEO of eventiveworld.com, and social media empresaria