Event Planning Best Practices: Budget Management

ONE of the greatest challenges an event planner faces is being able to deliver events, not only in accordance with client’s expectation, but also within a specified budget. Event cost management teaches us that the first critical step to take at the outset of any event is to make appropriate estimations, and that the accuracy of this estimation process determines greatly the success or failure of such event. It, therefore, becomes imperative for any event planner that would record outstanding successes in his/her career to learn this essential skill.

This article highlights two main approaches to creating an event budget:

The Budget Estimate

Also known as top-down budget, it divides the amount an event owner or sponsor is willing to spend among work packages. The event planner explains in details how event tasks will be done within the allocated budget. This approach leaves no room for guesswork; rather, it tells whether or not the budget is realistic.

   The advantage of the top-down budget is that it focuses on achieving the event within allocated budget and reduces unnecessary spending. A major disadvantage, however, is that it assumes that the event planner has enough expertise to make reasonable cost estimates, thereby giving room to conflicts when the event planner with little or no experience is given an unrealistic budget that is likely not enough to deliver the event.

The Definitive Estimate or Bottom-up Estimate

This approach looks at the Work Breakdown Structure (WBS) of the event, assigns cost to each of the deliverables on the WBS and sums them up to arrive at the total budget for the event. That is, the event planner estimates the total cost of the event by costing the lowest-level work packages and then rolling up.

   This approach has the advantage of being more accurate than the budget estimate. It is certain you will be faced with both approaches to budgeting at some point in your event-planning career. Whichever method you adopt for any event you are planning, you should know that it is highly important to:

. Monitor your budget by keeping a spreadsheet on your computer that you can update regularly, checking actual spending against budget estimate. This tells you whether the event is progressing as planned or you need to take corrective actions.

. Have a contingency plan, that is, think through what could possibly go wrong with the event and determine what would be done if that happens.

We leave you with this word. Always strive to go at least slightly under budget for every event executed.  That way, your clients will be happier and you would also have shown yourself to be a good and reliable fund manager, too.

  For more tips on Event Planning, please visit our blog www.royalsdelightblog.com. Contact us also for all your event needs and you will be greatly delighted you have done so.

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