The Importance of Event Budgeting in Nigeria

The Importance of Event Budgeting in Nigeria

Event budgeting is a projection (forecast) of the event’s income and expenses based on plans made and information gathered.

The creation of a budget is a critical component of event management. It is crucial for event directors to be able to predict with reasonable accuracy whether the event will make a profit, a loss, or break even.

This is accomplished by identifying and costing all likely expenditures and totalling all expected revenues (income). It is then possible to forecast the financial outcome of the event by comparing expenses and revenues.  

The financial outcomes of the event must be predicted early in the planning stages. Setting dates, booking venues, and making all other plans are only possible if an attempt is made to determine whether the event is financially viable.  

The Significance of Event Financial Control 

Once the event budget has been created, the event director can exercise financial control over the event. As a result of staging events, many organizations have faced severe financial difficulties, if not bankruptcy.

As a result, the budget enables the event director to make sound financial decisions regarding the choice of venue and expenditure on various items such as promotion, equipment, and staffing.

The budgeting process also allows the event director to determine how much revenue is required to stage the event in accordance with the planned level of expenditure.

Continual adjustment of the event budget 

Creating an event budget for your event is one of the first tasks to be completed during the event management process.

However, it should be expected that the budget will be adjusted and refined numerous times throughout the planning cycle.

It is impossible to predict all costs from the start, nor can it be expected that efforts to secure sponsorship and government funding will be successful.

The event management team’s budgets become clearer as more information becomes available.  

The Fundamentals of Event Budgeting 

Although creating an event budget takes time, some basic rules should be followed from the start.

When creating a budget, the most essential factor to consider is which items on your list are expenses and which are sources of revenue that can cover costs.

Furthermore, to effectively forecast a budget for your next event, you must distinguish between fixed and variable costs.

The fixed costs are the costs that do not vary with the number of attendees. A fixed cost is one that is calculated as a total amount. A venue cost is an example of a fixed cost.

Variable costs are those that vary according to the number of attendees. Food and beverages are an example of these costs and are calculated per person. 

Irrespective of whether you are organizing in-person, virtual, or hybrid events, the expenses and revenues you must account for will differ. 

Understand your attendees’ purchasing power

Understand your attendees' purchasing power

Know your audience as part of better understanding your event. 

Create an attendee profile; list the job they’d have, the regions they’d come from, the income levels they’d have, the types of events they’d attend, and any other relevant details that would describe their persona.  

As a result, you’ll better understand your attendees’ purchasing power, which will help you decide on the ticket price, registration fee, and sponsorship amount to seek. 

Be realistic about event earnings

Too often, event organizers overestimate the amount of sponsorship they will receive or the number of people who will attend as spectators or participants.

Unfortunately, overly optimistic predictions are frequently the source of financial loss, usually the result of staging an event. 

Examine the expense trend 

Understand the present by learning from the past. Look up previous event data to see how your budgets looked, which areas needed more spending, and how the overall event performed.

Note any changes you believe could be made to the budget allocation. Refresh your memory on current event trends, what your competitors are doing, and what your target audiences are looking for. 

Keeping good  vendor relationships can also help you save a lot of money. Ask your colleagues for this information, and contact the vendors with whom you’ve previously worked for your event needs. 

Keep track of all your expenses

Expenses come in a variety of forms. However, in general, your expenses will come from three major sources: 

  • Location and experience
  • Technology 
  • Promotions

1. The location and experience-related expenses can include the cost of renting the venue, setting up signage, paying suppliers, inviting speakers and VIPs, and paying all of your staff.

While this covers the fundamentals, it is also critical to consider the differentiators. Investing in experiences will never let you down.

However, it is critical to design and select relevant experiences for your target audience. There are also unavoidable expenses, such as event insurance. 

2. Technology expenses will include the cost of the audio and visual setup, event website, event app, communication tools, and projectors.

You could also use an app that analyses your sales and expenses, collects feedback from your attendees, and evaluates your event’s overall performance. 

3. Event promotions are critical; without them, you may fall short of your target ticket sales figure. Because all your attendees are now online, digital ads are an important source for increasing reach and visibility.

If you’re organizing a global event, you should definitely budget for social media marketing and email marketing. Investing in good public relations, external bloggers, and influencers helps spread the word more quickly. 

Have a backup plan

Have a backup plan

While we all hope everything goes as planned, it’s always best to be prepared for something to go wrong at the last minute.

Speakers may drop out, furniture may be delayed, or attendees may cancel. Anything is possible. Things can go wrong in an infinite number of ways.

You should, however, always have a backup plan. In addition, you should keep some emergency funds on hand to back up your schedule. Our advice is to set aside at least 20% of your budget for last-minute mishaps. 

Saving money is earning money. While all of this is true, it does not imply that you should cut back on all of your expenses. What is more important is that you identify the goal of your event and set a budget for it. 

Finally, make a budget to avoid losing money 

If an event appears to be losing money, it raises the question of whether the event should proceed as planned.

If it is not too late, plans should be changed to ensure that the event at least breaks even.

The importance of an event budget cannot be overstated. Although creating and managing a well-planned budget takes time, it can mean the difference between success and failure. 

Consider these tips for planning your next corporate event budget, and when deciding on a venue, check out The Zone.

The Zone is not just an aesthetically-pleasing space that will completely wow your guests; you will be saving a lot due to the functionality of the spaces provided. 

Take a virtual tour of our facility hereandbook a spacefor your event.

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