Event Planning: Financial Management (Notes)

finance for events can come from:
-sponsorship
-ticket sales
-sales on the day of the event
-money made after the event has taken place

ROI
can be hard to express ROI in purely financial terms

an event budget is used to ...
compare actual costs and revenues with projected costs and revenues

cash flow is important as much as ...
most aspects of an event require expenditure before revenue is obtained

funding or sponsorship bodies ...
need to see a budget before committing to the event

two types of budget process used for events
- master budget- focuses on each cost and revenue item of the total event
-program (functional) budget- constructed for a SPECIFIC program element

control and financial ratios
-establish standards of performance
-the budget, indicator ratios, success factors, milestones
-identify deviations from the standards of performance (comparison of budget to actual spend)
-correct deviations (by cutting costs, finding more money, or shift resources)

costing and estimating:
-classification of costs (fixed costs, overheads, variable costs)
-estimating (top down estimating, bottom up estimating, parametric estimating)

cash flow
--> importance to event management tips in dealing with suppliers:
-background info
-flexibility
-proper documentation
-full description of goods or services

--> change is more costly the closer to the event date

costing and estimating (tips on reducing costs):
-publicity
-equipment
-in-kind gifts
-hiring charges
-priorities cost centers
-volunteers

revenue: (various revenue sources including)
-ticket sales
-sponsorship
-merchandising
-grants and fundraising

revenue: (ticket pricing)
-covering costs
-market demand
-perceived value

tips for increasing projected income:
-ticket scaling
-in kind support
-merchandising
-broadcast rights
-sponsorship leverage
-special features: raffles