Five steps to planning a profitable event
Howard Lake | 13 December 2013 | Blogs
Are your events turning a profit? Are you sure? Here is how to ensure your events are genuinely delivering the bottom line for your organisation.
Here’s a scenario I’ve come across all too often in my career planning. Some of you may recognise this conversation. You may even have had it yourselves:
MF: So, how did your recent event go?
CEO: It was fantastic. We welcomed twice as many guests as we originally budgeted for, they all had a great time, the auction went brilliantly and we made a profit/surplus of £10,000!
MF: That’s really good news. So I assume that’s £10,000 over and above all the costs you incurred, yes?
CEO: Yes, after we paid for the venue, the catering and the guest speaker that’s exactly what we made.
MF: OK…so what about other costs?
CEO: What other costs?
MF: The cost of your and other staff time related to project managing the event, marketing, internal disbursements, transport and other expenses and the additional resources you had to allocate to cater for your additional guests. That’s all in your budget, right?
CEO: No, we haven’t got those in our budget. The staff were all our own internal organisational costs you see, so they don’t count as a cost of this event…
If you’re reading this and thinking “that sounds familiar” then you need to take a good, hard look at how much your event is really generating for your organisation. Not how much you think its generating. The most common pitfall charities and associations fall into, in my experience, is the temptation to ignore, deny or bury costs because they are “internal”, or because the systems are not in place to accurately map and monitor them.
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Event organisation: It’s not a hobby
Charity workers know all too well that organising an event is not just incredibly hard work. It’s an intricate process, demanding multiple skills and disciplines. So why do we insist on adding to already full workloads and relying on internal goodwill, rather than contracting the job out to a professionals? After all, your Board would never dream of charging internal staff with the job of acting as your charity’s lawyer, electrician, or auditor.
We need a change of mind-set here. An investment in professional help, either outsourced or internally will reap dividends thanks to your event organiser’s expertise in knowing exactly where to squeeze maximum returns out of every single activity, both in the run-up and on the day itself.
A realistic plan will generate an accurate bottom line
The real problem, I suspect, is one of fear. Events are costly and potentially high risk activities. When you see those costs and risks in black and white it can be a daunting prospect. But actually, the process of properly planning, budgeting for and monitoring your investment puts you in control. It equips you to make informed decisions and to see how the financial landscape changes because of those decisions. Any event that demands investment – whether it be of money, resources or time – should be supported by a proper business plan that confirms its viability.
Five steps to planning a successful event
Before you spend anything on an event, make sure you have produced:
- Clear and precise objectives: To establish exactly what you’re looking to achieve with the event.
- A full budget and cash flow: Including all hidden costs (staff time, allocated running costs, etc). Don’t forget that event costs tend to be back loaded to the date of the event. Staff and internal running costs are not – they have to be paid monthly, so you need to incorporate this into your cash flow to avoid any nasty surprises.
- A sensible and achievable timescale: Designed to deliver results without the risk of last minute panicking – which will inevitably lead to unnecessary compromises.
- Logical decisions about human resources: If your staff are already overloaded or have no formal event organising experience, then contracting in a professional is a no-brainer and will pay for itself in the additional benefits it brings.
- The supporting systems required to monitor event costs accurately: For example correct accounting allocations, a robust system for logging staff time, exemplary cash counting and book keeping on the night.
You can get more detailed advice, case studies and examples of profitability projections by visiting my full presentation online.
Photo: collecting box and black tie by chrisbrignell on Shutterstock.com
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.