Developing an event budget

A detailed event budget will help give prospective funders and sponsors the confidence to invest and help avoid surprises later.

Creating an initial budget

You should develop an accurate and detailed budget as part of the feasibility study for the event. If the numbers don’t add up the event (in its current form) won’t be viable.

Once you’ve created the budget, ensure it’s peer reviewed by both financial and event budgeting experts.

You should refine the feasibility budget throughout the event life cycle, as revenue and expenses become more certain. To keep control of the budget, it’s vital that variances (actual and estimated) are measured and reported against.

Budget activities include:

  • Feasibility/initial budget — created based upon all available information
  • Forecast — the expenses and income from the budget split into time periods
  • Reforecast — the forecast is periodically updated as planning progresses
  • Updated budget — the budget is updated to reflect any changes that impact income and expenses
  • Cash-flow forecast — estimation of the timing of cash inflows and outflows.

What the budget should include

The initial budget you created as part of the feasibility study should be as comprehensive as possible.

It should be created from scratch, as using existing budgets or templates can lead to areas/activities being overlooked. There are many factors that you need to take into account when creating an event budget. Different events will have different income and cost drivers, and quantification of these drivers is also likely to be different from event to event.

Useful sources of information include the following.

  • If the event is being bid for, the event tender documents should be a useful guide as to the expected areas of income and costs for the event (as well as who is responsible for each of the areas).
  • If the event has been held previously, then it's worthwhile requesting previous budgets from the event owner. You should treat this information as a guide only, as the event owner’s requirements may have changed, and the last event may have taken place several years ago and/or in a country with different economic conditions and challenges to those in New Zealand.
  • Request budgets from similar events or events that have recently taken place in the same area or venue.
  • Talk to local suppliers about the likely cost of various goods and services required to run the event.
  • Use budgets and financial information from the national body as a guide to possible costs.

Budget methodology

You can create a budget in several different ways. Below is a methodology that is effective without being too complicated.

Split the event into its major components. These may include:

  • central management
  • HR
  • leverage and legacy
  • finance
  • legal
  • accommodation
  • accreditation
  • logistics
  • security
  • technology
  • ticketing
  • travel and transport
  • VIPs
  • anti-doping
  • judicial
  • match management
  • event officials
  • medical
  • venues and training venues
  • commercial
  • branding and marketing
  • broadcasting and communications
  • media operations and digital media.

Select each individual component in turn, and work out the relevant cost and income drivers.

Once the cost and income have been identified, each driver needs to be quantified.

Some of the major factors you need to consider when quantifying cost and income include:

  • the length of the event
  • the estimated number of competitors, officials, spectators and VIPs
  • the required quality of accommodation, food, transport and so on.

Budget contingency

It's important you include a contingency in the budget, as it's almost inevitable that the original budget will change as planning progresses. The amount of the contingency may well be restricted by the available funds, however we recommend you include a contingency of at least 5% of the overall costs.

For events that have a very tight budget it's a good idea to split the budget into areas of essential activities (must-have) and discretionary activities (nice-to-have). Then ensure funds are allocated to essential activities first, with remaining (or new) funds allocated to the discretionary activities as and when those funds become available.

Sample budget

Budget - 2012 UCI Juniors Track World Championship [XLSX, 29 KB]