Planning committees will often establish “Blue Sky” thinking when planning a meeting or event. Committee members will throw anything and everything against the wall and see what sticks, without ever asking, “Do we have the money?” There is nothing wrong with brainstorming; in fact, it gives rise to creativity. Ultimately, someone may have to ask, “Can we afford it?” and then the committee will establish priorities for what the meeting is going to contain and what is wishful thinking.

Let’s start on our budget, our estimate of the event’s revenue and expenses. We’ll look at revenue in another post, but for now grab your meeting’s information and your spreadsheet and let’s find out. . .

What’s it gonna cost?

Expenses

Our list will by no means be exhaustive, but merely suggestions of the kinds of items you will want to include in your spreadsheet. We’ll divide our expenses into three categories:

• Fixed Costs
• Variable Costs
• Indirect Costs

As you work with your expenses, you’ll understand into which category they will fall. We divide the meeting’s expenses into these categories to help us establish registration fees or determine how many attendees we will need to break-even or produce a profit. We’ll have more on those calculations later.

Fixed Costs

As the name implies, these costs are fixed. They do not change based on the number of attendees. Fixed costs are not calculated on a per person basis, but rather as a total amount. Fixed costs could include:

• Audio Visual Equipment
• Venue Rental Fees
• Signage
• Marketing and Advertising
• Speakers, Facilitators, Onsite Staff
• Insurance
• Shipping
• Communication, Internet, Office Equipment, Phone Lines
• Site Inspection or an Onsite Planning Meeting
• Continuing Education Fees
• Entertainment
• Special Events

Using the above subcategories and others you may add, drill down deeper and include more detail in your budget. For instance, you may have to break out your AV by days or sessions. Are there labor costs associated with your meeting? What about special productions? Are there costs for different venues that you may be using? What about permits? Will you be giving gifts?

Variable Costs

Your budget will include costs that change or vary directly with the number of attendees at your meeting. These costs are calculated on a per person basis. Variable costs could include:

• Food and Beverage
• Guest Room Accommodations
• Transportation
• Collateral – Give Aways, Onsite Materials and Handouts
• Gratuities
• Registration Costs, Badges, Lanyards, Meeting Bags
• Offsite Events
• Taxes and Services Charges
• Drayage, Exhibit Pipe and Drape – Often calculated on a per booth basis.
• Credit Card Processing Fees

Drill down the same way you did for fixed costs and detail each item as necessary.

Some of the fixed costs noted in the previous section may be completely or partially calculated on a per person basis. In those situations, they become variable costs. For instance, if your conference is providing continuing education, are you paying one lump sum regardless of the number of participants or are you paying for CE costs per person?

Indirect Costs

Costs that are not tied specifically to the meeting are indirect costs. They can be fixed or variable and could include:

• Staff Salaries
• Overhead Costs
• Office Equipment
• General Insurance(s)

Budgeting Tips for Expenses

• Research, research, research!
  • Price out unknown items
  • Document how and why you arrive at the numbers you include.
• Round Expenses Up – Overstate Expenses
• Look for Hidden Costs
  • Use your meeting’s previous history to find missing items and to budget for hotel expenses such as Food & Beverage
  • Use Your Meeting’s Objectives and Goals to find missing items.
• Be aware of all Hotel Charges
  • Gratuities Rule of Thumb – In addition to bellman gratuities, you should budget 1%-1.5% of the organization’s total hotel bill for other staff gratuities.
  • Hotel Service Charges and Taxes

When entering your meeting’s expenses, endeavor to add everything to your budget. Your budget will be your meeting’s financial blueprint and will be visited frequently. As you monitor your meeting’s financial performance, you may find it necessary to slash expenses.