Nine Pitfalls to Avoid in Meeting and Event Budgeting
Budgeting for a corporate meeting or event should be simple, right? Just multiply the number of guests by the cost per guest, budget done. Not so fast! There are at least 9 ways that budgeting can go wrong. And depending on the size and scope of your corporate or non-profit event, a small error can quickly compound into a large one!
Nothing will wipe out the happy glow of having managed a successful event faster than belatedly realizing that the budget was blown. The tips below will help you to avoid the most common mistakes in creating and executing an event budget.
1. Forgetting tax and gratuity. The error with perhaps the most potential for costly overspend is not calculating tax and gratuity into meeting room rental, audiovisual and food and beverage line items. The amount of tax and gratuity varies greatly from property to property and city to city. In most cases, the gratuity is taxable but sometimes it is not, so check with the venue to be sure.
2. Underestimating number of attendees. If your guest count is off, your cost estimate will be too! Researching event history, invitation lists and typical registration response rates can be useful in determining an accurate attendee estimate. Pro tip: If, as often happens, the guest count is suddenly rising rapidly during planning or someone suggests adding a new group of attendees, be sure to revise your cost estimate and advise your stakeholders of the new estimated cost for the proposed increase in guest count. If at all possible, do this prior to any new invitations being sent so the powers-that-be understand the consequences of any decision. All too often, the thought is “we are already having the event, adding 30 more people won’t make much difference.”
3. Underestimating A/V costs and needs. Audiovisual equipment and labor costs can add up quickly. Getting a preliminary quote from your provider can help with making a solid estimate. However, an estimate is only as good as the information it is based on. Pro tip: Dive as deeply as you can into the proposed agenda. Identifying specific needs such as the number of microphones needed for a speaker panel, roving Q&A mics, lighting and sound requirements will help increase accuracy at the outset.
4. Missing mandatory fees for resorts and hotels. Fees such as box handling, resort fees, bell-stand charges, re-keying meeting rooms and room deliveries may add to your budget. Don’t hesitate to ask your venue contact the costs of these services. Even small fees add up over the course of an event or meeting.
5. Not leaving wiggle room for unexpected costs. Plan for the unexpected. A category such as “miscellaneous” in your budget can provide for a small amount of leeway for surprises!
6. Not allowing for costs that hit the company, but not your cost center. Prior to the event, decide which budget will pay for travel, hotel and incidental expenses. Every company looks at this differently. Pro tip: During site selection, consider travel costs in your decision-making process as they will affect the company’s financial investment in the program, no matter which budget they hit.
7. Missing minimum spend requirements. Most contracts with venues or caterers will specify a minimum spend requirement and damages assigned for not meeting them. At the beginning of your budgeting phase, make note of these on your budget sheet so they will be top of mind as you continue to craft your initial estimate. Generally, tax and gratuity expenses do not count toward meeting these minimums. Be sure to double check your contract to be certain of the specific requirements.
8. Errors in spreadsheet formulas! We hate when this happens! To avoid it, check for reasonableness of your overall budget and individual specific areas such as food and beverage totals. Then, double check that your totals include all of the cells they should. Missing one can be a speedy way to make a costly and embarrassing error. Pro Tip: Just like when you were in school taking tests, check your work, double-check and check one last time!
9. Set it and forget it. Yikes, don’t ever do this! Not tracking expenses and adjusting your budget in an ongoing manner can lead to nasty surprises after the event. We suggest keeping an estimate column that reflects your initial estimate and a second column in which you keep current tabulations. This will allow you to see any potential flaws in your estimate as well as give you peace of mind with the event spend, as you will know where it is at any given moment.
These are just some of the many pitfalls that can occur in meeting and event budgeting. How can you avoid the pitfalls? Hire an expert - Lead Dog Meeting & Event Management!
Contact us to learn more about how we can help you! Schedule your free consultation or email CRCaporale@LeadDogOnline.com or phone 610 690-5184.