Preventing Budget Overruns
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To avoid going over budget, every aspect of the expenditures should
be discussed with the vendor and included in the quote and contract.
It is often worth hiring a professional event
production company or planner simply because their vast experience means
that they are far less likely to overlook small details that can have
costly repercussions. Inexperienced event organizers often overlook
the financial effects of the following:
Taxes & Gratuities
There is tax on almost every aspect of an event. Federal, provincial
or state taxes may add as much as 20% to the bill of venue and equipment
rentals. Food and beverage service may have a combined tax/gratuity
bill of almost 35% in some areas. For example, if a two-day event with
a 100 guests had a modest budget of $10,000 for food & beverage,
the gratuity and tax bill would be an extra $3,500. Furthermore, these
are non-negotiable expenses.
Delivery & Pickup
A rental company for tents, stages, sound and light equipment,
furnishings, tableware, etc., may give a lower quote only to add costly
transportation
and setup charges when the bill is sent. Additionally, if the takedown
and removal of rentals can not be carried out at the agreed upon time,
there may be overtime charges.
Lighting & Audio
Visual
Lighting and sound are two very important elements of many events and
are often overlooked in the initial budget decisions. It is extremely
rare that a venue has fully suitable light or sound facilities. If it
is necessary to bring these in, there are extra costs associated with
the technicians necessary to setup and run the systems, along with rental
and delivery/pickup costs. Increasingly, projectors and multiple screens
for video and PowerPoint
presentations are required for conventions,
trainings, product launches, seminars, etc. (although the old standby
flipcharts, white boards and overhead projectors are usually still needed,
too). These expensive rentals should be clearly outlined in the budget.
Some venues force you to use their staff to set up, due to union agreements.
It is important to understand if this fee exists or not.
Décor & Staging
If an event is intended to meet PR or marketing goals, expect to have
dress up the venue with flowers, fabric, props, stages for speakers
or entertainment,
etc. These items can be surprisingly costly.
Royalties & Licensing Fees
If music is being played, it is legally required that a royalty fee
be paid each time the piece is used—the contract should specify
if this is included in the entertainment’s fees, or if the event
manager is responsible for it. This also holds for many types of
intellectual property such as films, TV shows, books,
magazines, software,
web pages, etc.
Tableware & Linens
If the caterer’s contract does not specify the provision of linens,
tableware, glassware, etc., the event coordinator will have to rent
them. These expensive items are often left out of the budget because
it is assumed that they are automatically provided with the food and
beverages.
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Conventions.com
Event Planning 101
Chapter 9: Financial Management
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