Budget Philosophy

For a successful convention, meeting or seminar, you must know your organization’s budget and financial philosophy.  Like any other objective, budget objectives should be measurable so you can demonstrate the ROI of the meeting to the “powers that be”

• Are you concerned about costs?
• Do you want to make a profit or surplus?  If so how much?
• Do you want to break even?
• Are you prepared to lose money?  This is okay if you plan to make money

Financial control provides professional guidance to your employer and your suppliers.  Is your organization willing to put money into a meeting  or do you have to raise the revenue to pay for the meeting?

What comes first, REVENUE or EXPENSES?

• Expenses – they outline what is needed in order to produce a successful meeting.

Considerations

Once you have the Expenses and the anticipated Revenue… you may have more money available to add enhancements or you may have to look for areas to cut back…   One of two things will happen – depending on what motivates your potential participants

• If they are motivated by education and content.. Then the quality of the speakers will be high on their priority list and the destination play a minimal role in their decision to participate.
• If they like good destinations , a good destination may increase spouse attendance and while speakers still play a role, location may tip the decision

Revenue:  It is important to look for ALL sources of income…

• registration – members/ non: delegates/ guest;  exhibits; sponsorship;  advertising; grants; material sales; tickets sales, investment.  Look at past history.  Make sure you consider all potential sources of revenue BUT be conservative!!!

Expenses:  Make sure everything is included because the little things can kill you!

• Actual current costs can be obtained easily from suppliers.  However, when planning well in advance – add a percentage to the current price for inflation.  Use historical data to predict future costs adding cost of inflation
• Include a contingency fund for cancellation/attrition; admin charges – bank fees (credit card charges)  insurance;  committee planning meetings; site visits; comp registrations;  overhead; temp staff, etc.

Budget expenses as worst case scenario (but not crazy)

History can tell you if one particular area (Food and Beverage or technical services or whatever) is exceptionally high   This becomes an area where cut backs might have to be considered.

In some cases you might show more  of a surplus than you should.  If you are asked to break even on a meeting, a surplus of $65,000 may not be acceptable.  When this happens, you might be able to add program enhancements or reduce registration fees