How to Budget for Corporate Events
We know the challenges associated with planning company budgets for the next fiscal year, especially when you’re tasked with putting together the events and incentive programs budget. It can seem to be daunting. You might be asking yourself “What steps should I take to ensure I’m submitting a relevant and effective budget request for next year?”
Typically, companies duplicate the prior year’s event and incentive programs budget and increase costs for each item by 10-15% to account for inflation, additional attendees, etc. But there is a much better way to budget for corporate events.
Do a Cost Analysis of Historical Event Data
It’s important you know what happened in the past in order to plan for the future. Here are a few questions you can answer to get the ball rolling:
- What types of events and incentive programs has the company done the last few years?
- What were the expenditures?
- Are any events income-producing?
- How many people participated in each event or program?
Take the time to do a cost analysis for each event and incentive program. Break down the financials for each one into line items that allow you to understand what created income, where money was spent exactly, and how much it cost per participant per line item. This last piece will help you immensely in determining how to adjust your budget based on expected attendance and participation for the following year.
Finalize Upcoming Annual, Quarterly, and Monthly Company Events
Once you have several years of data in hand and a thorough cost analysis completed, determine which events and programs will be repeated, which will be dropped, and what changes, if any, should be made to those planned for the following year. Besides looking at the cost analysis, take time to analyze the feedback from participants to help make these decisions.
The following questions should be running through your head as you work through all the data:
- What events were successes?
- Were there weaknesses pointed out by attendees or activities that were planned that had low attendance?
- What should be kept the same?
- What could be cut back?
- What needs to be upgraded or optimized based on feedback?
Answering these questions will help you use the line item cost analysis to your advantage. You’ll be able to determine where cost-cutting and increased spending may occur, as well as where opportunities for increased income may come into play. Make note of these per line item as you go through each event and program.
Adding New Events or Incentive Programs
There may be requests for new programs to be added to the budget. While you won’t have past data for them, your cost analysis of past events will help you make good decisions as to how to budget costs for any new events or programs. Some research will be required to confirm your estimates, but because you have a line item analysis done for past events and programs, you will know exactly what research needs to be done.
Account for Changes in Event Costs from Previous Years
Besides any planned upgrades or cutbacks, two major items will affect changes in costs: attendance and inflation. Again, your line item analysis with a breakdown of cost per person for past events will help you determine how any projected changes in attendance will affect your budget. Inflation might be a little bit more tricky as some line items will be affected more than others. However, doing an average inflationary adjustment should keep you on track.
All of this may seem like a lot of work, but once you have a system set up, the following years will be much easier to budget. You can start tracking line items in real-time for each event and incentive program and have that information ready to use for budgeting purposes in the future alongside your already analyzed historical data.
What happens, however, if you have no historical data or if you just aren’t the person to do such nitty-gritty cost analysis? That’s where turning to an event management company like Applied Meetings and Hospitality Solutions can be extremely helpful. One of our major services is cost analysis and budget preparation. We’ll walk you through the process step by step, guide you on line items that should be tracked and why, and use our decades of experience to provide you with solid budget projections.
During this process, we’ll also present you with options for locations, venues, travel packages, and more that will meet or beat both budgetary and program-related criteria. All of these services are at no cost to you, so you won’t even have to include them in your budget! To learn more about how we can help with your annual corporate event budgeting and planning, schedule a Discovery Call today.