5 Common Event Budget Mistakes (and How to Avoid Them)

Jordan Atherton, CMP, Senior Event Planner
April 26, 2019

I truly love budgeting—in both my professional and personal life. And while I understand that I am very much in the minority when it comes to my love of spreadsheets, most event professionals agree that tracking revenues and spending is an absolute must. When looking at creating your event budget, I have found that there are 5 common mistakes.

  1. Not making a budget. No matter if you’re planning a small intimate gathering or a large formal gala, a detailed budget is always a necessity. While the idea of creating a budget from scratch may seem like a lot of effort, building a quality, detailed budget will save you time and many headaches down the road. Start with the obvious basic necessities (food, beverages, décor, entertainment, etc.) and build out from there.
     
  2. Overlooking labor, gratuities, taxes and fees. That $90 per person menu can be well over $120 when it's all said and done once additional fees are added into your final bill. There are a handful of charges, fees and taxes you should be aware of when building your budget. It is standard for most venues to charge a service fee, and you want to make sure you understand exactly what that fee does and does not include. Be on the lookout for additional labor charges, state taxes or liquor taxes. Depending on where you are located, some states will tax the services fee as well. As a general rule, be sure to have very clear and upfront conversations with all of your vendors during the planning process to clarify and understand the tax implications for every aspect of the event. More importantly, I can’t emphasize enough the importance of providing proper gratuities. While certain fees may be labeled as “service fees”, always clarify what portion, if any, goes directly towards your serving staff. This varies by vendor, and you always want to make sure you are taking care of your servers. Let’s face it—they are the ones who can make or break your event!
     
  3. Misunderstanding what is included in your venue rental fee. Sure, the pictures on the venue’s website show stunning events with beautiful spaces filled with coordinating linens, round tables and chairs, vibrant lighting and a spacious dance floor—but are you sure those come with your rental fee? Always explicitly clarify which items, services and labor are included in your rental fee and what you will be responsible for bringing in.
     
  4. Assuming your ability to spend the food and beverage minimum. When booking private space for an event where food and beverage is involved, always take into consideration the food and beverage (F&B) minimums. Not only do you need to pay attention to the contracted minimums to understand your threshold, you also need to take note of the venue pricing on food. For example, if your event is expecting 75 people but your venue space can easily hold 200 people and has a food and beverage minimum of $20,000 with their highest priced dinner menu at only $45, it is going to be nearly impossible to reach that minimum, no matter how many extras you order. The good news? Most venues will work with you on minimums during your contract negotiations.
     
  5. Failing to include budget for contingencies. No matter how much time and effort you take into planning every little detail of your event, there will always be at least one surprise expense. No matter how big or small the scope of the budget, contingencies should always be taken into consideration. As a best practice, budget at least 10% of your overall event spending to have on hand for anything that might pop-up. If you are somehow miraculously spared from pop-up expenses throughout the planning process, be careful not to fall into the trap of spending the extra contingency money before the event. It isn’t over until it’s over, and you never know what unexpected surprises could happen the day of the event on-site.
     

What is even worse than not building an event budget? Committing the time and effort into building a beautiful Excel spreadsheet with formulas and filters only to never look at it again. You put in the hours to build it – now use it! As you receive quotes and finalize pricing, be sure to input those numbers into your budget so that when (not if!) surprise expenses pop-up, you can quickly and confidently make decisions.

The Emergence of Fee-based Planning

Tips for delivering high-value service and advice in the digital world.