Budgeting for Meetings, Functions or Events Guide [2020]

Budgeting Meetings Functions Events Guide

If you have a financial background

For larger meetings, events or social functions it will usually be a financial officer or a volunteer with a financial background who will be responsible for creating the overall budget.  If your qualifications fall into that category, this section may be a “no-brainer” for you and you can skip it.

If you are less experienced with budgeting

The learning process for handling new budget responsibilities will be easier and more pleasant for if you approach it as though the budget will become your best friend!  It will, in fact!  Respect it and refer to it constantly.  The budget will serve as your pathway to meeting the financial goals of the event, and it will raise a barricade when a change in direction is needed to keep you on track and out of financial trouble.

Budgets are not set in stone

The budget of necessity will be a work in progress.  In the beginning revenues and expenses can only be forecast.  If the event or function is a recurring one and a financial history of actual performance from previous years is available, the forecast will be easier but not complete until current quotes from all venues, facilities, and service providers are provided.  The preliminary planning process for the event will move forward during the budgeting process but financial commitments must be delayed until it has been carefully reviewed and approved.

Line items in the different budget categories will remain flexible to some degree but the bottom line will not.  Staying within budget is a team effort and all participants in the planning and production process must flag immediately if situations occur that will affect the projected revenue or expense.  Quick action can then be taken to put an alternate plan in place to compensate before the financial damage becomes irreversible.

Regardless of the scope of your responsibilities in planning and coordinating any conference or function, large or small, your input and involvement in the budget process will be important.  As you become more familiar with it, you will be amazed at how clear the picture becomes about items that need to be monitored more closely than others and when adjustments must be made.

Budgeting Guidelines

Regardless of the scope of your responsibilities in planning and coordinating any meeting or event, large or small, you must understand the budget process that is unique to the hospitality industry.

Most likely you will be working from a portion of an overall budget that has already been created for the entire event.  In that case, it will be easy to break down the portion of the budget that applies to your areas of responsibilities into a spreadsheet with the detail you need to monitor and control your expense and revenue.  If you have full responsibility for creating the entire budget, the same principles will apply.

Financial Goals

Setting the financial goals of an event is usually pre-determined by the type of organization planning the function. If a company is training employees, the cost of the meeting will be an expense item (a loss) to the company with no charge to the employees. If the event is being planned to raise money for a charitable organization, the financial goal would be collect enough revenue from ticket sales and sponsorship to pay all expenses for the event and donate any profit to the charity (a non-profit event). Or it may be a social function for a large family or a college reunion with a financial goal to break-even by collecting enough from all who attend. Once the financial goal is clear, you can begin the budget process.

Break Even

The break-even analysis gives two formulas to consider when deciding the best method for charging potential attendees for the event you are planning.  If the cost will be the determining factor for those who may want to attend, you may choose to keep the ticket price lower and build enough attendance to provide the number of funds needed.  Or you may choose to keep the size of the group small for a more exclusive experience that will justify the higher ticket prices needed to cover expenses and achieve the financial goal.

The break-even analysis is the starting point whether your budget is for-profit or is expected to generate enough revenue to offset all cost (non-profit), or if it is expected to result in a deficit.  This could be the case if an organization is committed to absorbing all cost for a training or mandatory meeting.  It will help you decide whether you want to charge a registration fee or not for your meeting or event.  It will clarify how much revenue must be generated from other resources, such as sponsorship. product sales or a silent auction for a fund-raiser or for-profit function.

Expense and Revenue

If you are preparing a budget for a group that has held events in the past, a review of past expenses and revenues from your group’s history will give you a healthy start.  But, if you are starting from scratch with no history for reference, you need to begin by listing every expense item that can be associated with the event in one column and every source of revenue in another.  The checklist and other sample documents available in Budget Tools will help you compile your lists.
You will have then have to research the cost of your expense items today.  If your event will not occur until a year from now, you will want to add a few percentage points to cover a potential increase.  Once you have a good handle on expenses, calculate your break-even point to determine how you need to structure your budget and determine the sources of income that will be required to meet the financial goals.

Taxes, surcharges or fees, service charges, gratuities 

These are big-ticket items that you won’t usually find included in the dollar amount that is quoted in proposals for overnight sleeping rooms, menu prices, airline seats, and so on.  Instead, you will see a price quoted for the room or seat or meal with a notation that states “plus tax and gratuities” or “plus tax and fees” elsewhere in the document, usually in a footer.  In contracts, the amount of taxes and service charge will be quoted as different percentages rather than a dollar amount and are subject to change if you are booking years in advance for a large show or event.

Gratuities are different than service charges inasmuch as they are voluntary, but you need to budget for them in addition to service charges.

Service charges are used by venues, facilities and service providers to offset expenses such as labour cost or maintenance of equipment, and only a portion, if any, is designated to service personnel.  Ask your provider how the service charges are to be used in any portion is designated as gratuities, verify that the service personnel you wish to reward for a job well done will be included in distribution at an appropriate amount.
Surcharges or fees can be imposed to cover expenses that are out-of-the-ordinary such as soaring fuel prices for transportation or higher energy prices in hotels.  Some hotels are now charging for things such as daily linen changes in guest rooms that have been booked for multiple nights by a guest.  Require full disclosure of all fees that will be charged and protect yourself against additional fees being added without your knowledge after the contract is signed.

Attrition Contingency Fund

Simply put, there will be a clause in almost every type of contract required when producing an event that states either a percentage of revenue or a set amount, called a “minimum,” that must be guaranteed for the contractor by your group in order to avoid attrition penalties.  It is one of the most costly and unpopular provisions in contracts for the meeting and event industry, but it is a necessary recourse for venues, vendors and service providers if group attendance at the event and planned participation in activities and meal functions do not materialize as expected.  Be sure to understand attrition, monitor it aggressively and include a contingency fund in your budget in case you are disappointed with your group’s performance!

Budgeting Break-Even Analysis

There are two break-even formulas that can help you determine how to reach the revenue needed from registration fees to cover expenses.

A. To calculate how many attendees you will need at a pre-determined registration fee to generate enough revenue to cover all expenses:

Subtract your variable costs from the registration fee to get the “contribution margin,” then divide your total fixed costs by the contribution margin. For example:

  • The registration fee has been set at $20
  • Fixed costs are $1,000 for meeting room rental, $100 for audiovisual, and $500 for a speaker, $1,600 total.
  • The variable cost for food and beverage is $10 per person

Subtract the $10 variable cost from the $20 registration fee which gives you a contribution margin of $10. Divide the $10 contribution margin into the $1,600 total fixed cost and you see that you will need 160 attendees to break even.

Divide the total fixed costs by the number of attendees to get the “contribution margin,” then add the variable cost per person. For example:

B. To calculate what you need to charge for registration for a pre-determined number of attendees to generate enough revenue to cover all expenses:

  • Fixed costs are $1,000 for meeting room rental, $100 for audiovisual, and $500 for a speaker, $1,600 total.
  • The number of estimated attendees is 160
  • The variable cost for food and beverage is $10 per person

Divide the $1,600 for fixed costs by 160 expected attendees which gives you a contribution margin of 10, then add the contribution margin of 10 to the variable cost for food and beverage of $10, and you see that your registration needs to be $20 to break even.

Budgeting Checklist

If you are working with a group that has produced meetings and events in the past, it is probable that a good financial history will be available to serve as a checklist when initiating the budget process.  But if this is a first-time event, listing all the expense items and potential revenues will be more difficult and time-consuming.  Refer to the sample checklists available to you here along with the sample budgets and you will be off to a good start.

Be thorough.  Meeting your financial goals will be one of the most critical to the success of the event and the organization that is hosting it.  You will need help.  Delegate responsibilities to other team members or volunteers to get quotes from the various vendors and service providers that will be needed to produce the event and to help develop a budget strategy.

An example of how to divide responsibilities

 Major Task Budget for Networking Reception & Program

 Assigned to

 Sub-Tasks Venue and vendor quotes

 Team A

 Food and beverage menus

 Team B

 Marketing expense

 Team C


 Team D

 Registration and ticket sales

 Team E

Follow-up with weekly budget reviews

Regardless of how much or how little advance notice you have been given to planning the budget for an upcoming meeting or function of any type, getting the correct information you need about expenses and potential revenues on a timely basis is critical.  Review the status with your team on a weekly or even daily basis until all items on your checklist relevant to the budget have been received and incorporated into the budget.  A budget timeline goes hand-in-hand with your checklist and will be helpful in keeping you on track and on time.  Schedule a brainstorming session to make adjustments in the program to cut expense or generate revenue as needed.

Budgeting Tools

The PDF, Excel and Word documents provided in this section are meant to serve as example formats only.  These formats will give you a head start in streamlining the planning and coordination process for your own purposes, but the content and formulas must be changed to apply to the different needs of your group.

Pay close attention to the formulas in spreadsheets

When spreadsheets are available, take painstaking care to check all formulas after making entries and changes to ensure that calculations remain accurate.  If you are not experienced with Excel formulas, have your work checked by someone who has expertise working with spreadsheets and can verify that the information is presented properly and that formulas are set up to calculate accurately.

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