Organizing a music event or festival is no easy feat. There are countless moving parts to consider, from selecting the right venue to determining which artists should play. Creating a production budget is one of the most important steps to planning an event. It’s important to have a budget in place in order to determine how much money you’ll need to bring the event to life.
When it comes to organizing an event, budgeting is key. Having a clear view of your event’s financials will help you determine what can and cannot be done in order to make the event a success. An accurate budget will also help you keep track of your expenses and prevent overspending. The goals of creating a production budget are to determine how much money needs to be allocated for the event, decide which elements are essential, and make sure that the cost of producing the event stays within your set parameters.
Why a budget matters to the success of your event
In order to achieve success with your event, a budget helps to put the fiscal cost and management of your event into perspective. For instance, a budget forces event planners to prioritize their expenses, allocating resources to the most important aspects of the event and cutting costs on less essential items. It also helps event planners allocate resources and expenses effectively, ensuring that the event stays within its financial constraints. A budget allows event planners to measure the success of the event by comparing actual costs to budgeted costs and identifying areas where expenses were higher or lower than expected which could be used to inform later events that you organize.
Of course, most importantly, knowing and matching your budget is essential in setting your pricing and sales benchmarks to ensure you have a profitable event, or can adjust as the sales numbers and budgetary items come in.
What you need to consider when getting your budget done right
Budgeting is something that takes time and management to get done correctly. You want to be as meticulous as possible so you don’t end up being short of the funds that you need to properly pull off your event.
Budgeting isn’t necessarily in everyone’s wheelhouse, so in addition to the steps below, there are many resources for the type of documentation you need to create and maintain a budget. Microsoft office has an event template you can start with here.
Here is how you want to get started when creating a budget for your event:
- Assessing Your Event
The first step in creating a production budget is to assess your event. You’ll need to identify the type of event you’re organizing and establish the basic elements that need to be included. The most important considerations are what types of artists you want to book, and what is the size and scope of the venue. Next, you want to assess things such as the production staff that is needed, expenses for food and beverages and any other amenities you might need, and security. This is not an exhaustive list as you want to tailor your production budget to the specific needs of each event you plan. Once you have identified the elements needed for your event, you can begin estimating costs.
You can see what type of production staff you need in this article.
- Estimating Costs
The next step is to estimate the costs for each element. Of course first is talent and venue, which are often fixed costs to the extent of your ability to negotiate. However, local vendors and services that can provide the necessary components for your event, such as sound equipment, lighting, and catering services can often be more flexible where you can have multiple vendors bid, thus bringing the potential to lower costs. You can also calculate how much each item will cost by doing some online research and comparing prices between different suppliers.
Once you have determined the estimated costs for each item, compile this information into a budget spreadsheet, like the one mentioned above. This spreadsheet will provide a visual representation of all the expenses associated with your event, so you can easily adjust costs if needed.
- Adjusting Costs and contingency
It’s important to keep in mind that unexpected costs may arise when organizing an event. In order to avoid going over budget, keep a contingency fund in place that can be used for unexpected expenses. Additionally, look for ways to reduce costs wherever possible. This could include negotiating lower prices with vendors or looking for cheaper alternatives for certain items. As sales numbers roll in, you may need to adjust up or down based on the crowd expected.
- Finalizing Your Budget
Once all costs have been accounted for and adjusted, it’s time to review and revise the budget. Make sure that all financials are accurate and that the total cost of producing the event stays within your established parameters. Finally, establish a timeline for completing the budget so that it’s ready before the actual event takes place.
Now you can take a look at your promotional budget and make sure everything lines up.
Bonus tips to make budgeting more manageable
Budgeting is a way to help event organizers hold themselves accountable and prioritize the most necessary aspects of the event. When you budget well and efficiently, you can approach your planning and spending in a way that is more productive and leads to the overall success of your event while maintaining that your finances stay intact and within budget. Here are a few tips to keep in mind when deciding your budget for your event.
- Consider the extra expenses for hybrid events
Technology is impacting the event industry and the demand for hybrid events is increasing, especially after the Covid-19 pandemic. Event organizers got creative and delved into live-streaming services to bring the event to their attendees. Now, it’s almost expected to see a hybrid option for events. So when you plan your budget, make sure to account for technological services such as live-streaming services and other tech services such as contactless technology (QR codes as an example) which makes event entry easier.
- Consider different sources of revenue and plan accordingly
When creating a budget, you also want to consider your different sources of revenue. This can be from sponsorships, ticket sales, registration fees, etc. This is by no means an exhaustive list but it’s important to think about these different sources of revenues and leverage them when adjusting costs.
- Invest in technology that helps you manage your budget accurately
It’s imperative that event organizers keep an accurate and updated track of their budget and costs. Invest time in creating an Excel or Google Sheets or even an accounting software to help manage and organize your budget. You also want to make sure that you categorize and label everything that goes on the sheet in a way that makes sense to you and your team. It’s also good housekeeping to record every cost and expense and update your sheet every time a transaction is made.
Creating a production budget is essential when planning an event or festival. It helps ensure that all costs are accounted for and that money is allocated appropriately. Additionally, having an accurate budget can help you stay on track with your financial goals and prevent overspending. With proper budgeting, you can bring your music event or festival to life in the most cost-effective way possible.