Event Planning 101; How will I pay for this?

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Around here when you use the word budget you usually get a dirty look. Most of us hate anything that requires us to know how much money we really have to spend and, worse, keep track of it after we’ve spent it. It’s so limiting! Alas, it’s a necessary evil of life, and as we all know from the last few years, indiscriminate spending has gotten the world in a big mess.

Annually, we prepare budgets for all of our events. This year we started a lot earlier, so we’re in the middle of the process right now. Now you might be thinking, “Jeez, how hard can that be after producing Dealer Expo for 40 years and the International Motorcycle Shows for 30 years?” There are many aspects of the events that are repetitive and as such are much easier to budget for, but we also do a lot of new things each year. All of these items require us to fully understand the component parts and pieces of each new thing, and what they will cost. Hence the dirty looks.

We’ve talked about planning your event and defining the desired outcome. If you’ve done both, you’re ready to figure out if you can afford to do the event. If your event is designed to drive sales, you’re going to follow a really simple formula. Expected revenue from sales minus expected costs of event = expected profit. If there is no profit or you’re going to lose money, revisit your expenses.

When we build our budgets, we have to make assumptions on the number of booths and tickets we will sell, and if we will sell any sponsorships. That’s the revenue part. Marketing and operations put together all the costs to execute on the events at the level we’ve promised our customers. That’s the expense part. Once we pay all the bills, we should have a profit. If we don’t follow this procedure, no profit.

Last year, we went off the rails and executed an event within our International Motorcycle Shows that was unbudgeted. Why after 29 years we suddenly decided to wing it will forever remain a mystery, but what isn’t mysterious is that we lost our shirts. If it can happen to us, it can happen to you. So as much as you dread the thought of getting out your calculator and crunching those numbers — do it!

If your event is meant to create an environment to make it more comfortable for potential customers to visit your store, you may not expect to make an immediate return on your investment. If that’s the case, be clear what your other measurements will be for you to deem the event successful. Perhaps you want to add 100 new names to your database. Measure the expense of producing the event against those 100 names. Will it cost you $1,000? That’s $10 per name captured, which might be worth it if you can turn some of those prospects into buyers.

The nitty-gritty of budgeting is pretty straightforward. Let’s say you’re going to host a parking lot sale. I’m going to assume you own your parking lot, so no costs there. What else do you need? You need to let your customers and prospects know about the event. You could:

• Produce fliers to be hand out the month before the event. Can a staff member design the flier? If not, do you know a local graphic artist? What will the artist charge? Will you print the flyers yourself on your copier, or will you go through a local printer?

• Hang banners inside and outside your store to promote the event. Figure out what sizes you need and have a local banner company or an online marketing firm give you a quote. (Note: a banner appears much smaller on the wall than it looks lying on the floor of your store.)

• Publicize the event on your store’s social media sites. Maybe offer a Facebook-fan-only deal?

• Send an e-mail blast to your customer list (this shouldn’t cost you anything but time).

• Place an ad in your local paper. Figure out the cost of the ad, and whether you can design it yourself or need to enlist an outside designer.

• Tables and racks for product: Do you own enough of these, or do you need to rent them? If you need to rent, figure out how many you need and get a price from a local rental place. Ask if they charge for delivery and pickup.

• Food service: I recommend finding a local vendor who wants to partner with you, and let it handle the food service. Just provide space on the lot. If you’re going to host, figure out what food and drinks you’ll need (if you serve booze, you’ll need a liquor license), plus plates, utensils, etc. Cost it all out.

• Security, parking assistance, trash management: Do you need these? Will you need to run power outside to support cash registers and credit card transactions?

Be as detailed as possible and then figure out either 1) how you’re going to get it done at no cost, or 2) what it will cost to get it done. Add it all up, and that’s what your total expenses will be. Only you can decide if the potential sales will deliver the profit you need.

This story originally appeared in the Dealernews July 2010 issue.