Organizing an event involves a series of expenses that are sometimes very difficult to determine. We must plan in advance everything that we are going to include in our event so that these costs are as close to reality as possible. In order to organize the event in the right way we have to take into account different influencing factors.
First of all, the fixed and variable costs. The fixed costs are all those that have to do for example with location, diffusion, promotion or management software. The variable costs, on the other hand, will depend more on the magnitude of the event, i.e. the number of attendees. In addition, we must also take into account unforeseen events, since some always arise, and the income, because the events, although they generate expenses, also produce income from sponsorships, subsidies or ticket sales.
How much does it really cost to organize an event is one of the first questions that arise for promoters and organizers who are just starting out in the event industry.
Organizing an event involves a series of expenses that are often difficult to calculate. However, in order to be able to plan properly, it is necessary to know in detail the real cost.
To deduce how much it really costs to organize an event, you must take into account several factors such as the type of event you have in mind: classroom, hybrid, online, Roadshow, etc.; the location, the number of attendees and the quality you want to provide them with the resources you use in the event such as invitations or tickets, furniture, catering, image and sound, a special guest or technology such as event management software.
The budget is a key factor when organizing an event, because it allows us to determine the expenses we can incur and the limit we can reach in order not to waste resources.
If you do not know how to calculate the budget of an event, we give you a guide so that this step is not an ordeal in your next planning.
Having a defined event budget will allow you to have a more realistic approach to the economic resources you have available and thus, you will be able to make a proper management of funds and expenses.
There are several key factors to calculate the costs of an event or at least to make it as accurate as possible. And it is very important to take them into account to adapt the budget to the characteristics required by the event.
Here are 5 key factors to calculate the costs of an event:
The fixed costs of an event are those expenses that we cannot fail to cover, that is to say, they are mandatory for your event to be carried out in the optimal conditions as it has been planned.
Some of the fixed expenses that you can have when holding an event are:
Location: this is the scenario in which the event will take place. Here you must take into account the type of event. If it is face-to-face you have to rent the space, if it is hybrid or online, you must also consider the technology to be used. At this point, in some cases, you can enter both furniture and technical equipment.
You should also think about the cost of permits and licenses that this implies, as well as the insurance contracting that they bring with them.
Dissemination and promotion: The dissemination and promotion of an event is fundamental, so you cannot overlook these expenses that include press releases, social media strategy, posters, online advertising and any media you use to publicize the event.
Hiring of entertainment or moderator
Event management software: Having event management software is essential these days to organize an event, as it can solve you several aspects of management such as ticket sales, advertising, analysis during and after the event, among other aspects. And although it is considered a fixed cost, it also saves money and resources.
Variable costs are the expenses that oscillate in proportion to the event that you are going to carry out, that is to say, they are a function of the number of attendees.
Among the variable costs of an event are:
Tickets or invitation: For people to attend your event you must send invitations or sell tickets, so this expense will depend on the number of people you expect to attend the event, it will be the same number of invitations you will have to send or ticket you will have to sell.
Catering service: If you offer catering in your event you must take into account the number of attendees and the time the event will take place, if it is breakfast, lunch, dinner or cocktail. All these variables influence the cost, as well as the city where the event will be held.
Security personnel: The more people attending the event, the more security personnel you will need.
Technical equipment and furniture: The furniture and technical equipment to be used in the event will also be in proportion to the space in which it is held and the number of attendees. This point would also include the cost of transportation, although most suppliers include it.
It is very important to have a reserve fund for unforeseen events, because believe me, there is always one. That is why the event's budget must be flexible, so we can deal with any unforeseen event that may arise.
The right thing to do is to calculate a little more than the real cost of the event (around 10%) to have that extra amount that can save you the organization.
Organizing an event generates a lot of expenses, but it also has the advantage of generating income. Whether you hold a corporate event, a sporting event, a festival or any public or private event, there will always be a way to monetize it.
There are four main sources of revenue for an event
Sponsorship and/or advertising: Sponsorships and/or advertising are a good way to obtain complementary economic resources. In the case of sponsorships they can be monetary or in kind with some elements necessary in the realization of the event.
Subsidies: Some events may have certain characteristics that allow them to be subsidized by public entities. Above all, these are professional events.
Registrations: If we are talking about sporting, business or even professional events, registrations are a great source of income, since, in this way, the interested parties ensure their place in the event.
Ticket sales: Ticket sales at events are one of the biggest sources of income, especially if we are talking about leisure and entertainment such as festivals or nightclubs parties. The number of tickets sold depends on the attractiveness of the event and the diffusion you give it.
5.Analyze the performance
Once the event is over, it is time to analyze the performance you have achieved with its organization. And I am not only referring to the economic performance, but also to other variables, such as the satisfaction of the attendees, the impact on the company or the brand, etc.
Knowing the economic performance is very easy, you simply have to subtract the expenses from the income obtained.
However, analyzing the other results is a bit more complex. It is advisable to conduct a post-event survey of attendees and monitor mentions of the event both in the media and on social networks.