03 Dec Event Budgeting: A Step-by-Step Guide For Building an Event Budget in 2022
Suddenly it’s November, the clocks have gone back with the darkness looming early each day and we are looking ahead to our event calendar in 2022 – where has this year gone?! As an event management agency, we are constantly anticipating what is coming next and a theme that we have been particularly paying attention to is event budgeting. With the world has come to a halt and events now back with a bang, there are new things to consider when building a budget, whether it is an indoor event, outdoor event, or virtual event. Here are five points that should have extra consideration.
VAT rates
Since the COVID pandemic, VAT rates for hospitality have changed with different rates on different items. As event planners and event managers, this is something we particularly need to look out for as we regularly purchase these goods and services when bringing an event together. Not only have the rates changed once, but they also keep changing and so it’s something we need to keep track of, particularly when we receive costs from suppliers including VAT and want to remove this for putting our budgets together. It’s important that event management agencies keep checking the current rates to avoid mistakes.
Contingency planning
Adding a contingency into a budget for any unforeseen circumstances is always key – as it is difficult to be able to predict every cost. Sometimes the scope of the event changes, and this is relevant to in person as well as online event solutions and so the costs change with it. Often clients need to raise a PO for event management agencies to invoice and so by including a contingency, this can often save time later on.
With the current climate and existing pandemic, rules are regularly changing and there are new contingencies that need to be put into place, for example, backup staffing. This can often increase costs which is something that we need to be continually aware of in 2022.
Online/hybrid or in-person
Is the event in person, virtual-only or a hybrid between the two? This is an important question, as we have so many varied events now that require different considerations and this can change the way we budget significantly, with these different events needing a range of different inclusions. We now don’t just have to think of the in-person attendees’ experience, but also the virtual viewer. This is even more difficult when creating a hybrid event as we want to provide the best experience for everyone, and the virtual viewers require different considerations in person.
Inflation of prices
Inflation of prices is something to consider every year, not just for 2022 but we need to pay extra attention to it next year, as due to the pandemic, prices have risen in some goods more than usual or in a different way. We have a shortage of hospitality staff and lorry drivers for example, which as a result means demand is now outweighing supply in many items and this has driven up prices. This makes it more difficult to put estimated costs into a budget, so it’s better to check costs and note that they may not be valid for long as there are so many changing factors.
Evaluate past events
Previous events which were similar can provide you with a wealth of data and knowledge on creating a budget for the next event. Evaluate these past events to understand the areas you over or underspent on and analyse why. This could be a good time to consider other vendors depending on the previous experience of using them and their typical costs. However, it is important to just use this as a guide, as this won’t provide an exact science.
Overall there are many factors to consider when building an event budget; there are so many different types of events and inclusions needed. These 5 steps I’ve written are just some of the important considerations when building a budget next year, taking into account the current climate and how changeable this has been and will continue to be.