Thorben Grosser serves as VP of Partnerships and Channel at EventMobi, bringing 15+ years of expertise in strategic event planning and industry leadership. Having guided thousands of event professionals in crafting exceptional attendee experiences, Thorben deeply understands the nuanced challenges planners face in delivering successful events. In his current role, he collaborates with event agencies and AMCs to enhance their strategic capabilities while sharing practical insights on emerging trends and best practices.
An event is a large undertaking for any association. It requires careful planning, marketing, and organizing to ensure everyone is on the same page and everything runs smoothly.
One aspect of the planning process you may overlook is financial management. Since your expertise is likely in member relations, fundraising, and marketing, you may feel you lack the expertise to manage your event’s finances confidently.
No matter your experience level, there are small steps you can take to get your event’s finances in order and ensure your hard work pays off. In this guide, we’ll review five event financial management tips to help make your event profitable and successful.
1. Set Financial Goals for the Event
You likely begin your event planning process by setting goals. Whether you aim to engage a certain number of new members, increase event attendance by a specific percentage, or facilitate networking opportunities, goals provide focus to your event efforts.
The same goes for financial management. Setting financial event goals lets you determine exactly what you’re working towards and measure your success. These goals may include components like:
- Break-even point. If you’re just starting out, perhaps your financial event goal is simply to avoid financial loss by generating enough revenue to cover your expenses.
- Profit margin. Ideally, your event will generate a profit you can reinvest in your association. You may decide on a specific percentage based on your past events’ financial performance.
- Cost per attendee. Consider narrowing your focus to your ideal cost per attendee and work to ensure the revenue you generate from each attendee exceeds this amount.
- Sponsorship revenue. Set a dollar amount you hope to generate from sponsorships to cover event costs.
These financial goals should align with your overarching event and strategic goals. For example, if your organization wants to develop more partnerships with local businesses, setting financial goals around sponsorship revenue would make sense in the context of your strategy.
2. Develop An Event Budget
With your financial event goals in mind, it’s time to create your budget. Like any budget, your event budget will contain two main categories:
- Revenue. Revenue refers to the funds you expect to generate from your event. Revenue streams may include ticket sales, sponsorships, exhibitor fees, and merchandise sales. Project your revenue based on past event revenue or your expected attendees.
- Expenses. Expenses are the costs associated with your event. These include fixed costs, such as venue rental and entertainment, and variable costs, such as catering, that depend on the number of attendees.
Consider allocating a small percentage of your event budget to a contingency fund to cover unexpected expenses. For example, after a chaotic start to the first day of your conference, you may need to bring in additional staff to support the check-in process for day two.
3. Diversify Your Revenue Streams
Imagine you secure a significant sponsorship eight months before your next conference. Since you already know you’ll have enough revenue to cover your expenses, you just focus on selling tickets. However, a month before the event, the sponsor cancels, claiming they just did some restructuring and no longer have the budget to fund your event.
This scenario illustrates the importance of diversifying your revenue streams. The more revenue streams you develop, the more sustainable and resilient your event will be. Take advantage of these event revenue streams and use the following tips to increase profitability for each one:
- Ticket sales. Develop ticket tiers that unlock access to different benefits at your event. For example, you may have general admission tickets that allow attendees to access all the main event sessions and workshops and VIP tickets at a higher price that provide access to exclusive networking opportunities, front-row seating, and VIP lounges. Additionally, you may offer member and non-member pricing through your event registration platform.
- Sponsorships. Create different event sponsorship packages that enable businesses of varying sizes and budgets to support your event. Higher tiers will be more expensive and have more promotional opportunities for the sponsor, such as shout-outs from event speakers or a sponsored welcome video for a virtual event.
- Exhibitor fees. Offer early-bird discounts to encourage exhibitors to sign up for your event as soon as possible. You may also price larger booth sizes or more premium locations at a higher rate and offer add-on services at an additional cost, such as access to attendee lists after the event.
- Merchandise sales. Limited edition merchandise that attendees can only get at your event may entice them to purchase. Or, if you’d like to expand your reach, consider offering an online store that virtual attendees and other supporters can explore.
- Event app advertising. Your event app presents various opportunities to promote your sponsors, speakers, and exhibitors. Allow them to pay for advertising space on banner ads, push notifications, and gamification challenges.
By diversifying your revenue streams, you can be confident in your event’s profitability and quickly bounce back if one source doesn’t generate as much revenue as you initially anticipated.
4. Minimize Event Expenses
As a nonprofit organization, your association could always benefit from strategies that decrease expenses. By actively working to minimize event expenses, you can stay within your event budget and increase profitability as much as possible.
Keep costs low by incorporating these tips into your event’s financial management process:
- Look for nonprofit discounts. Many software providers have affordable options geared toward nonprofits and associations. You may also negotiate with vendors like your venue and catering company to decrease costs.
- Solicit in-kind donations. As YPTC’s in-kind donation guide explains, “In-kind donations allow nonprofits to access goods and services that they may not be able to afford to purchase. As a result, they can free up resources they’d typically spend on those items and reallocate them to other areas of their budget.” In the case of an event, you may solicit physical goods, like supplies or auction items, or professional services, like web design or catering services.
- Use volunteers. Staffing can quickly become one of your largest event expenses. Lower these costs by tapping into your organization’s volunteer base. If you don’t have a dedicated group of volunteers, have your members and sponsors contact their personal networks to find community members willing to help.
Additionally, the time and location of your event can greatly impact your expenses. Investigate which time of year venues have the lowest rates, and try to choose a convenient location for attendees to minimize transportation costs.
5. Review Your Event’s Performance
After your event, reflect on your goals and budget to assess your event’s financial performance. Compare your projected revenue and expenses to your actual revenue and expenses to determine how well you stuck to your budget, any areas for improvement, and any surprises that led to higher revenue or lower costs than expected.
Then, calculate the profitability of your event by subtracting your event expenses from your event revenue and dividing it by your event revenue. The total will be your event’s profit margin. Record this number and any lessons learned so you can refer to this information when planning your next event.
Events are an incredible chance to build community amongst your association members and dive into industry-relevant topics together. Prioritizing smart financial management ensures you provide members with the best experience possible while staying within your organization’s means. If you need additional help with managing and tracking your event’s finances, contact a nonprofit accounting firm for assistance.
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