‘Before even starting to think about venues, location, speakers, etc the budget must be established.’

SETTING BUDGETS

The budget is a quantitative goal which states the financial confines in which you are working. It is the target against which costings (the actual price you will be paying) will be measured. The budget may be given to you as part of your brief, or it may be up to you to prepare your own budget and to justify the costs to your superiors. If a substantial amount of the costs are to be met by sponsorship, you will need to prepare a plan as to how you are going to achieve it. All of this needs to take place before you start your event countdown.

Looking at the costs

Although the budget should be set at the start of the project it can be altered and monitored as you proceed. The combined costs must fall within your budget figures.

Fixed costs

Fixed costs are those costs that will be encountered irrespective of the number of delegates who may attend. For example:

• brochure printing
• brochure design
• organisation fees
• speaker fees
• travel
• accommodation
• room hire
• press and publicity
• advertising
• mailing house
• signs.

Variable costs

Variable costs are those which vary according to the number of delegates who attend, e.g. catering costs.

Income

Income may come from different sources and can also be categorised as fixed and variable.

Fixed income

Income that is not dependent on the number of delegates.

For example:

• sponsorship
• contribution from organisation.

Variable income

Income that is not fixed. It may for example vary according to the number of delegates purchasing tickets and the number of exhibitors booking stands.

Value Added Tax

Value Added Tax (VAT) will be added to many costs of goods and services supplied and will be added to the ticket price if your organisation is registered for VAT. For the purpose of the budget the VAT should not be included on any of the entries so that a true figure is seen. The exception to this rule is if the organising company or organisation is not VAT registered, in which case they will not charge VAT on the ticket sales and will be unable to reclaim VAT on expenditure so the entire cost will need to be met. To find the VAT content in a cost, divide the cost by 47, then multiply by 7. For example, £10.00 ÷ 47 × 7 = £1.49 (rounded up) (so long as VAT remains at 17.5%).

Breaking even

A break-even point is the point at which the conference makes enough income to cover the fixed costs. If the conference is income-generating it is important to know what this figure is so that you have a quantifiable goal to aim for. To find the break-even point, see Figure 13. Further details on practical budgeting can be found in Managing Budgets and Cash Flows (How To Books).

INSURING AGAINST DISASTERS

The thorny issue of insurance should be addressed and a management decision made as to whether or not to take up one of the specialised insurance policies that are available. No matter how hard we try, some things really are beyond our control, such as the weather, rail strikes, terrorist activity, etc. In instances where conferences are drastically affected by these things, adequate and appropriate insurance can make the difference between an inconvenience and a financial disaster. Policies can be taken out to reimburse organisers for a range of mishaps, including:

• cancellation/abandonment
• non-appearance of speakers
• reduced attendance by delegates
• failure to vacate the venue by the specified time
• legal liabilities
• personal accident and travel.

Checking your cover

Check your organisation’s own insurance policy and establish the situation regarding the venue’s insurance policy. The items left uncovered by either of these are what you now need to look at. There are several specialist insurance companies who can provide flexible packages, so discuss your situation and obtain quotes from them. You may be surprised at how reasonable the premium can be.

CONTROLLING THE CATERING COSTS

Every venue you visit will be able to supply you with an assortment of menus that can be provided in a range of budgets. You may be offered a day delegate rate which includes lunch and refreshments or you may be offered a room hire rate with catering costs separate. This is often the case with civic and more unusual buildings, where the facility is leased to a catering company and all payments relating to catering costs are made directly to them. If offered a day delegate rate check exactly what it includes. How many servings of tea and coffee does it include? It may only be two, in which case you may need to order another serving for registration. Is the lunch price for a finger buffet, fork buffet or a more formal seated meal? How many courses?

Considering drinks

Are soft drinks included in the price? If not, what are the costs? Very often the soft drinks such as mineral water and orange juice are charged per bottle or carton used, so you only pay for what you use. If this is the case it is important to give the caterers a limit so that they notify you when it has been reached. The amount can add up very quickly and work out very costly if you do not control it.

These days delegates tend not to expect wine with their meal as was traditionally the case. Hotels may have their own bar as well as having a temporary bar facility in the conference area. Many organisers opt to let delegates purchase their own drinks at the hotel bar rather than having the temporary one opened. Sober delegates make for much happier delegates and the after-lunch slump is made many times worse if delegates have been drinking alcohol. If wine is to be served it will be charged at premium rates and it can be false economy to provide your own. The corkage charge made by the venue for every bottle opened may result in you paying even more.

Reducing catering costs

Some organisers have the luxury of working with a large budget and minimum restriction on catering and other costs. More common, though, is the organiser with a limited budget who is still required to provide the best of everything.

If you are working to a restricted budget and are finding it difficult to make ends meet there are a few compromises that can be made.

• Question whether you need to serve biscuits with each serving of tea and coffee. If not, this could be a worthwhile saving and is especially practical if a sweet is being included in the lunch.
• A buffet lunch will always be more cost effective than a seated lunch. Select the items carefully, e.g. a wholesome lasagne and jacket potato will be both filling and cost effective.
• Check whether you are to be charged room hire for the use of the lunch room. Often if you are having catering there will be no room hire charge, however this is not always the case and it is an area that may be open to negotiation.
• Issue delegates with vouchers to exchange for tea/coffee and lunch. Agree to pay the caterers according to the number of vouchers collected. This ensures you only pay for what is consumed and can represent a significant saving.
• Consider if packed (boxed) lunches might be acceptable

NEGOTIATING RATES

Do not be inhibited about negotiating the room rates. Venues do not come with immovable price tags attached. They will have a rack rate which is the full quoted price, but very often this is the starting price and there is almost always some room for manoeuvre. Start at a price lower than you would expect them to accept so that a compromise will lead you to a more realistic target. Don’t forget, if you start high you cannot get lower. Although you will probably be asked directly, avoid telling them exactly what your budget is. Keep it as vague as possible to start with, ‘This is being run on a tight budget’; ‘We have a reasonable budget but it is likely we will still require some compromise on both our parts’. Appear cool and confident when negotiating. However much you may like this particular venue, remember there are many alternative venues you could use, and the venue co-ordinator will be aware of that.

If you are preparing a series of conferences around the country you may also be able to gain an extra discount by using a hotel chain that will give a discount for multiple bookings.

If you do not feel that you can negotiate well, ask the venue-finding agency to do it on your behalf. They are very experienced at such things and may already have a discount arrangement.

What to look for

The ‘package’ that will be offered can vary hugely between one venue and the next. All have their advantages and disadvantages and the benefits must be weighed up considering the type of event you are organising. As a rule, purpose-built training centres often have more equipment included in the room hire rate than most hotels. This can include whiteboards, TV and video monitors and other audio visual equipment. Some venues may include an organiser’s office, the speaker room, the lectern, staging and tables in their price.

Paying professionals

It is likely that you will need to bring in other event professionals at some point during the preparation for and the running of the event. Printers, audio visual technicians, stage designers and freelance organisers have their own rates and these should be made clear from the start. Establish whether expenses are to be added on to their basic fee and establish payment terms.

Playing safe

Ensure a contingency fund is built into the budget. This will cover unforeseen expenses and will help to ensure that your budget does not get out of control.

ARRANGING SPONSORSHIP

Having decided to seek sponsorship in one form or another from one or more companies, draw up a list of companies and/or organisations that would benefit from reaching the type of delegates that you are hoping to attract yourself.

The benefit to sponsors is the opportunity to communicate directly with potential customers, to raise their company profile whilst meeting their marketing objectives. The benefit to you is that they will be paying for the privilege and so providing some often much needed cash.

Your options are to obtain either full sponsorship from one company, or to break down the various elements that could be sponsored and offer them to a variety of organisations.

Looking at sponsorship opportunities

You are limited only by your imagination when it comes to thinking of items to have sponsored. From biros to baseball caps, from balloons to briefcases, there will be a promotional gift company that will be able to satisfy your needs. There are currently at least two major trade shows dedicated to the incentive and promotional gift market. Take a trip to one of these and you will be able to discuss your requirements in detail with suppliers, and gather ideas and examples from the items on display. You may also be able to take advantage of special show offers giving you a significant discount on your orders.

Knowing what to charge sponsors

Draw up a list of items you think would be appropriate to your event and work out the cost of those items to be produced, including the screen-print charge and delivery. Then add on a percentage which is the sponsor’s contribution to the event. The amount will vary according to your particular circumstances. (When calculating the cost of the screen-printing be aware of the increase in charges if using more than one colour.)

How to contact potential sponsors

Circulate a letter of introduction and a sponsorship form to your list of potential sponsors, making sure it looks professional and attractive. Ensure that it clearly stresses the benefits to the organisation should they decide to take up the opportunity. Be totally honest about the expected number of delegates, mailing, numbers of brochures, etc. Include a date by which forms should be returned, and be sure to enclose a contact name and telephone number for any queries.

Confirming the sponsorship agreement

Having obtained an initial agreement to sponsor the event, send a written sponsorship agreement, making it clear exactly what is included in the package, confirming the cost, and informing them of the date that the invoice will be sent and the terms of payment. This ensures that it is clear from the start that there is no room for misinterpretation. Sponsors should be invoiced before the relevant items are ordered, so that should they have a last minute change of heart you are not left to pick up the bill for 200 delegate bags with their logo printed on them.

Logos are designed at great expense and play an important part in a company’s corporate identity. It is essential that designs for your sponsored items are approved by the company.

TAKING CARE OF SPONSORS

Having provided the financial resources to enable you to hold your event it is worth looking after your sponsors. Without them the financial outlay could render the event unviable and, of course, you may wish to approach them

again in future years. In terms of physical products – pens, bags, brochures, etc – send a set to the sponsor when they have been produced. In the case of brochures that carry their logo, you may find that the sponsor is willing to distribute brochures on your behalf as it can be of mutual benefit.

After the event

After the event send a personalised thank you letter to the sponsor. If the delegate list was to be part of the sponsorship agreement, ensure this is also sent promptly (first checking this does not contravene data protection legislation.)

Sponsorship ideas

• advertisement in brochure
• dinner
• wine
• cocktail reception
• flowers
• luncheons/bags/documentation
• pens/badges
• notepads
• signs
• conference speaker expenses
• carpet tiles
• banners
• breakfasts
• menus.