IDSA Leadership Training 2010 Activity Planning Series Part II

Budgeting & Planning

Activity Series: What to Expect

• Part 1- Overview & Foundation: September 15th, 2010 COMPLETE!

A review of Connexx procedures and a concise look at how to define your activity

and what tools you will need to make it a success.

• Part 2- Budgeting & Planning: October 20th, 2010

A detailed look at the technical and financial side of activity planning.

• Part 3- Onsite & Wrap-Up: November 17th, 2010

Final steps involved in the execution of your activity and necessary follow up.

About the facilitator

Carrie Rice, CMP, Director of Conferences and Meetings at IDSA

Carrie Rice, CMP has over a decade of experience in the meeting, event and conference planning industry. As

Director of Conferences and Meetings for IDSA, Carrie manages staffing and budgets for an annual portfolio of 10

to 15 events, ranging in size from board and committee meetings to regional and international conferences.

Carrie has accumulated a diverse array of experience and expertise in strategic planning, creating and maintaining

program budgets, event site selection, hotel and vendor negotiations, site management, program development

and scheduling, food and beverage management, audio/visual needs and onsite event management.

With experience in a variety of industries, Carrie has planned and managed events both domestically and

internationally, working with a large cast of vendors, speakers, sponsors, and executives to produce first-class

events with a very high satisfaction rate. Prior to her position with IDSA, Carrie worked in meeting planning with

the Casualty Actuarial Society in Arlington, VA. She has also worked in conferences and meetings, event planning

and marketing with Commonwealth Financial in Massachusetts; Billy Casper Management in Vienna, VA; and the

Cultural Affairs and Protocol Unit of the City of Sydney, Australia.

Carrie attained Certified Meeting Professional certification in 2006. She holds a Bachelor of Arts degree from

American University, cum laude, and a Certificate in Event Management from The George Washington University.

Budgeting: Overview

Your Mission: Designing and producing events is an exciting business, but it is a business! Event

producers need management skills to oversee operations and the business of the event. This

includes managing finances, information, people and risk. It is the responsibility of the event

producer to control and direct the fiduciary polices and procedures as tightly as the creative ones.

Objectives …

• Calculate the break-even point and profit margin for your event

• Determine the basis for identifying fixed versus variable costs

• Identify the financial philosophy for an event, and how it plays out through the budgeting process

Additional Considerations:

• Case study with practical example

• Top ways to save on food and beverage

• Tips of the trade

Examine the potential budget

• Who will develop the budget?

• Is the budget sufficient for the project?

• Where are additional funds and resources in case of need?

Next…..decide which of the three examples below appropriately represents the financial philosophy of

your event by examining event financial goals.

• Do you need to make a profit?

Example: An annual event may be a major source of revenue for your chapter/section.

• Does your activity hope to break even?

Example: A workshop series aimed at training.

• Or, is the event hosted and not designed to make a profit or break even?

Example: An elegant dinner sponsored by a plastics company in order to influence potential

clients.

Income

Income can come form a variety of sources, such as in the form of cash or “in-kind” sponsorship

contributions.

Standard types of anticipated revenue:

• Registration fees

• Ticket sales

• Sponsorship contributions

• Exhibitor or booth rental fees

Types of income can actually be in the forms of cash, but may still be different from what we typically

think of when we’re considering actual revenue:

• Donations

• Grants and Contracts

• Merchandise sales

• Advertising revenue

Expenses

Expenses can be categorized in one of two ways: fixed or variable.

Fixed

A fixed expense (or fixed overhead) will remain the same regardless of how many guests you have

at your event.

Example: Cost of renting a tent for an outdoor event will remain the same and the audio-visual,

entertainment, venue rental, and electricity will all remain the same regardless of whether you

have 5 people or 50 people.

Variable

These expenses do change based on each person that attends.

Example: If five people attend your networking dinner, and your cost per plate is $60, the total

variable expense would be $300 for those five people. The cost for dinner increases to $3,000 if

50 people attend.

How registration fee is determined….

Developing a Break Even Point

The break-even point provides an analysis for you to determine how many attendees you will need to

have in attendance in order for the event to break even and how much of a budget you will need

to cover your expenses.

Total fixed costs + variable costs

Registration fee = -----------------------------------------------------

Number of attendees

Food & Beverage

• Most venues consider food and beverage as a significant revenue center.

• Often venues give free meeting space based on the amount of money spent for food

and beverage.

• Hotels will often require a certain amount be spent on food and beverage.

• Note that their required minimums often DO NOT include taxes and the service

charge which together can drive up the total price by over 30%. Budget for these

extras!

• Consider putting the buffet table outside the meeting room to limit attendees from

returning to the buffet once the meeting begins. If you do this, you may need signage

stating who the buffet is for to discourage those outside of your meeting from

consuming.

Breakfast

• Serve 1 item (bagel, muffin or pastry) per person for 75% to 90% of attendees

– Example: For 100 people, order 75 to 90 items (most groups experience at least

a 10% no-show factor for breakfast)

• Bagels and muffins are usually the most popular. Minimize pastries, unless they look

very appealing (i.e. prepared from scratch in-house).

• Order breakfast breads conservatively as it is usually simple to add more cold food if

needed.

• If you have left over pastries, ask to put out for the AM break or have them delivered

to your office or committee meeting.

Lunch & Dinner

• To get an accurate count of the number of attendees served, count the

number of main plates before lunch begins and subtract the number

remaining after the function. You will want to have a catering person present

to verify the number onsite.

• You will be required to pay for the amount you order.

• Venues will usually plan for 3-5% more than you order; check your contract.

If you order for 80 but 70 eat, you still have to pay for 80.

Coffee Breaks

• 1 gallon of coffee fills 21 6-oz cups, 16 8-oz cups or 10 12-oz cups. Find out

what the hotel provides. If possible use china rather than disposable cups

which hold more. Your coffee will last longer!

• Some venues will let you order half-gallons

• Order bottled water and soft drinks on consumption instead. If you do, be

sure to conduct an opening and closing inventory with the hotel.

• Place the breaks outside of meeting rooms. It slows consumption.

• You do not have to provide coffee and soda all day. Provide them for short

intervals throughout the day.

Other ways to save…..

• KNOW YOUR GROUP'S HISTORY. Closely analyze how many people attend your food functions and how much they eat and drink; that way you won't pay for meals and drinks that aren't being consumed.

• USE STAND-UP TABLES FOR COCKTAIL RECEPTIONS. That way, people are more likely to network and less likely to hang around and drink and eat all night.

• LINES ARE OK, TO A POINT. At cocktail receptions, don't be afraid of having medium-size lines at the bar. Long lines are a no-no, but lines that are five or six deep encourage networking and discourage over-indulging on cocktails.

Menu Planning Negotiation

• ASK THE CHEF- Meet with the chef or catering personnel to see if you can use the

same menu as another group that is meeting at your facility at the same time. Having

the chef prepare more of the same food in advance can result in cost savings. Also,

check with the chef for seasonal or regional specialties, which might be less

expensive.

• LOCK IN MENU PRICES- If the hotel will not provide a specific menu in advance, at

least agree that menu prices will not increase more than a fixed percentage per year.

• ORDER AS MUCH AS POSSIBLE “BY CONSUMPTION”- Uneaten food and drink

can be returned and not charged. This works well with soda and packaged foods,

such as potato chips, but also can be done with perishables.

continued…..

• USE SIT-DOWN MEALS- This can cut food preparation labor costs as much as 20

percent.

• SKIP THE DESSERT, SALAD, OR SOUP- Attendees won't miss the courses, and

dessert can be served at breaks.

• USE SMALLER PLATES

• PLACE EXPENSIVE FOOD ITEMS IN HARDER-TO-REACH PLACES ON THE

BANQUET TABLE

• AVOID SHRIMP, OYSTERS, AND OTHER DELICACIES

Alcohol Negotiation

• SKIP THE TOP SHELF- Use house-brand cocktails and wine instead of premium

brands.

• NEGOTIATE BARTENDER FEES- If you agree to a beverage minimum, negotiate to

eliminate the bartender fees if you meet the minimum.

• FIND A SPONSOR- A local winery or microbrewery might pick up your liquor costs.

• USE A CONTROLLED-POUR SYSTEM- Make sure that bartenders measure what

they pour. If you are being charged per drink, you may find a “liberal ice” policy and

weaker drinks. If you are being charged by the bottle, the mixed drinks might be too

strong.

• ASK THE VENUE FOR A DISCONTINUED WINE LABEL- These often cost less.

Contacts & Important Links

Contacts:

• Katie Fleger, Manager Member Relations- katief@idsa.org

• Jill Richardson, Membership Coordinator- jillr@idsa.org

• Director of Conferences- TBD

• Julie Heard, Chapter VP- julie@mixergroup.com

• Warren Ginn, Section VP- warrenginn@gmail.com

Links:

Connexx Manual: http://www.idsa.org/content/content1/connexx-manual-chapters-and-sections-april-08

Chapter/Section Training Presentation: http://www.idsa.org/content/content1/section-training-handout

SCARF: http://www.idsa.org/content/content1/scarf-section-chapter-activity-request-form

Post Event Summary: http://www.idsa.org/content/content1/connexx-post-event-summary-form

Alcohol Policy: http://www.idsa.org/content/content1/alcohol-policy

IDSA Bylaws: http://www.idsa.org/content/content1/idsa-bylaws

Story of Connexx: http://www.idsa.org/content/content1/story-connexx

Finance & Event Planning Sheets: http://www.idsa.org/content/panel/connexx-resources

Next Time

• Part 3- Onsite & Wrap-Up: November 17th, 2010

Final steps involved in the execution of your activity and necessary follow up.

QUESTIONS???