Smart Money: Budgeting Strategies
Author: Hunter Holcombe
May 2008
Columns
No planner would contest the claim that pulling off a successful meeting is in many ways an art, a careful orchestration of diverse factors brought together to form...
...a seamless, productive, inspiring and memorable occasion. As an art, then, couldn’t it also be argued that no price should be placed on creativity? That would be nice, just once, wouldn’t it!In reality, however, planners would not be the maestros they are if it weren’t for the restrictions of time and money; anyone can create a fantastic event with limitless funds, but only a seasoned planner knows how to squeeze every penny to make spectacular meetings with the budgets given them.
Particularly in today’s uncertain economy, it’s important to take a solid look at how you plan, enforce and review your budget. There’s bound to be areas where you could be saving money without changing the quality of your event.
Bonnie Wallsh CMP, CMM, chief strategist for Bonnie Wallsh Associates, a meeting management and consultation company in Charlotte, N.C., has given countless seminars on budgeting strategies. Her 42-page PowerPoint presentation—which Wallsh uses during seminars on budgeting—not only explains the fundamentals of budgeting, but the many hidden costs and fees that often take planners by surprise. She also stresses the importance of keeping abreast of current affairs.
“The first thing is to have an awareness of the state of the industry,” she says. “For example, you need to know about this recession, and how it will impact attendees. [Changing] gasoline costs are important if you are reimbursing for mileage. Food costs are going up. You need to know what’s happening.”
When preparing your budget, however, Wallsh says there are three key factors that never change: 1) goals and objectives, 2) profile of attendees, and 3) meeting history.
All three of these elements bring your research skills into play. First of all, getting a sense of the goals and objectives will tell you what your (minimum) expectations are. This includes everything from your allocated budget, date range and prospective attendees, to the ratio of meeting time versus free time. While obtaining this information is the nuts and bolts of planning, however, it doesn’t mean you’re quite ready to start booking. First you need to get to know your attendees.
To do this, start by to ascertaining their professional level. If this is a small group of C-level executives, you’d better make sure the accommodations and service are to their expectations. If it’s sales training for entry-level employees, a mid-range hotel will probably be fine. What will the male/female ratio be? Their age range? Income level? Consider what part of the country they are coming from as well. All of these factors should help you determine not only the theme and feel of the meeting, but also the areas where you might save money, and where you probably shouldn’t.
Lastly, the most valuable piece of information for a planner creating a budget is a well-documented precedent. If you planned last year’s annual meeting that you’re about to repeat, hopefully you kept a meticulous record of your projected budget and results. If you are new to the team, hopefully your predecessor was diligent and handed over the files to your CEO. Analyzing where you should have spent more money and where you could have saved money could drastically help you zero in on the best-designed budget. “The first time you do a budget is the most difficult,” Wallsh says, “because you have nothing to go on.”
As for keeping the records themselves, Wallsh recommends using a simple Excel-style spreadsheet for every category of expense (accommodations, F&B, transportation, etc.), and tracking the projected expense, the actual expense and the difference between the two. She then recommends assigning all of these categories their own spreadsheet and breaking them down further. With “recreation,” for example, you would track what type of activity, how many participated, the cost per person, etc. This allows you to examine what type of activities were in high demand and which may have been a waste of money.
Aside from these three primary keys to creating a budget, there are many other factors that can pull your total into the red or into the back. A major issue is hidden fees, a problem that particularly plagues newer meeting planners. While your hotel contract might clearly spell out the accommodation and meeting space rates, unexpected charges like mandatory resort fees, Internet fees, use of the business center, or a change in exchange rates or taxes can really add up.
Conversely, there are plenty of ways to save money, and not simply by eliminating things. Wallsh points out that A/V equipment-rental fees can be exorbitant, and recommends bringing your own materials whenever possible or finding ways to cut down on repeat rentals. She also is a proponent of sponsorships, especially with meal functions. “Everything can be sponsored,” she says.
At the end of the day, each planner is going to have their own best practices for trimming their budget and cutting deals—it’s what makes us unique. But everyone can benefit from reexamining the basics, as well as taking a closer look at the details. Even if your budget seems safe and sound for years to come, no budget is perfect, and a re-allocation of funds to an area of your event that needs it most will only result in a better meeting for everyone.
