After you have a clearly defined the corporate event goal(s) at hand, it’s time to determine exactly how much money will be allocated for this event that will satisfy all objectives. Sometimes, the budget can be a difficult thing to determine. There will be times when the budget is not well defined, and this often leads to skimping and taking shortcuts all along the process in an effort to save a dime or two. Here is how such a scenario typically plays out:
The day before (or day of) the event, you realize all of the elements you’re missing because you didn’t want to spend the money. Instead of feeling embarrassed—and not wanting to look like a cheapskate—you rush out and buy all of the things you should’ve looked into in the first place. But at that point, you end up with inferior products because you are shopping in the dreaded “last minute in panic mode.” Not to mention you have spent a lot more money than necessary because you couldn’t comparison shop and find the best deals. At that point, it’s kind of like being forced to do all of your shopping in an airport gift shop.
Larger companies know how to budget their events more effectively. They usually get their budgets from previous events or will allocate a specific budget to produce the event. But let’s face it—sometimes, you may not know how much to budget for the event, and neither will the client. Here are some of the most common mistakes clients and corporate event planners make when creating a budget.
1. Ignoring the Goals of the Event When setting the budget, be realistic and flexible. Event goals come first; the budget follows. Click To Tweet
2. Trying to “Guesstimate” the Budget
You may do a quick Google search for “cost of typical awards dinner” and go from there. This is (really) not a good idea. Vendors’ prices change almost daily, and no two budgets are created equal.
3. Not Involving Everyone in the Budget Preparation.
If there is someone besides your main contact at the client’s company who wants a say (like the CFO or other executive), make sure those individuals are involved from the very beginning. Decisions made without the full picture or scope can lead to missed details or overlapping ideas which lead to confusion.
4. Being Overly Optimistic About Attendance or Demand
This often leads to budgeting for too much food and too large a venue. Sit down with your clients and ask them to think through the guest list with precision. More guest list tips here
5. Overlooking Ancillary Costs
Let’s face it, they can really add up. Always consider safety or security measures at the corporate event and even the cost of sales tax on items.
6. Purchasing Items Without Prior Approval
Are you sure your client will approve of the items your purchasing? Nobody likes unwanted surprises, especially when it comes to budgets. It’s also costly when corporate event planners forget to collect receipts or invoices, so the money is unchecked with no paper trail. These are the wrong records to misplace or completely fail to collect in the first place.
I suggest you create a detailed list of all the items (food, beverage, entertainment, rentals, etc.) that you would like to have, and collect those costs by gathering bids. Add all of those items up, and then meet with your client to determine if you and the client can live with that number. If the client can’t live with that amount, separate the need-to-have items from the nice-to-have items, and work from there. You are better off having a few nice things than many cheap things. Most of your budgetary requirements will present themselves during the pre-planning phase of the process.
Tell us in the comments below, what are other budget errors that corporate event planners need to avoid?
Learn how to avoid many event planning mistakes with a free digital copy of GOING LIVE: Insider Secrets To Corporate Event Production