Don't you hate that feeling when your boss asks you to do something and you're not really sure HOW to do it? You scramble to figure it out quickly and then do your best to pull it off because that's what amazing administrative professionals do!
So if you are in a meeting with your boss and they want you to plan the next company event. Would you know how to do it? More importantly, would you know how to budget for it?
Whether you’ve been asked before or this is your first time, you should know the steps needed to not only keep expenses in check, but it’s also a great way to cover yourself, in case something unexpected happens.
So the moment you discover what type of event it will be, you need to find out how much they are planning to spend.
In other words...what’s the budget?
"A budget is telling [the] money where to go instead of [you] wondering where it went."
- Dave Ramsey
The purpose of a budget is to see if you can afford the event you have to plan. Many times an event is announced before it’s decided if it will be financially reasonable. This is the wrong step to take, but you probably will not have any control over that.
Whether you have a budget number or not - the steps to create one are the same. The only difference is that you are not going in blind. It will still be a fishing expedition, but having that final number will at least tell you the amount you can’t go past.
So break up the event into pieces - literally tear it apart. Let’s use an event, like an employee recognition reception and break it down. You may need to get: food, beverages, awards (may need to get different gifts depending on how many years the employee has been with the company), waitstaff, venue, musicians/DJ, audio/visual staff, monitors, podium, photographer, stage, and signage. These items mentioned becomes a line item in your budget.
What is a line item?
A line item in a budget describes the expense in a particular category that is needed in order to complete the event.
This is how you start. If you are having difficulty thinking up other items to add to your event, go back to my earlier post on mind maps. This exercise can really help you think it through. After you have your line items, you will write in your budget number. But like I said even if you don’t have the number - this is where your research begins.
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Why create from scratch? Build off of this one!
So for example, you need food for the event and your company has two preferred vendors. When you contact them, describe the event, and how many people are attending. They will give you menus you can tweak and then give you a quote. Let’s say you choose Vendor 1 - the quote for the food is $9k. In your budget, you enter $11k. This is called padding or adding a buffer.
What is Padding (Buffer)?
Padding is your umbrella. The amounts in the budget can be increased to cover for unexpected costs. It is important to remember - when padding a budget - not to make the amount insanely high.
The practice of padding is normal and expected. When you create a budget you are being asked to go into the future and predict what the costs will be. Researching costs can will give you realistic pricing. But unless you can tell the future, you need to plan for the unexpected and padding helps you do that.
Notice in the picture above. There is a column labeled “Actual”. This is filled out when you start to get invoices of each service or item ordered. The last column is labeled “Difference”. This will tell you if you are under or over budget. Amounts in red are line items that went over budget.
After your event is over, your budget could look like the one above. This gives you a clear picture of what was spent on the event and how close you were to staying close to your budget numbers.
Some may ask “Why is this important? The event is over.” It’s important to see all costs associated with your event. On an event like this one - employee recognition reception - you will most likely have to do it next year. This document will make it easier to plan next time by knowing what the costs were now.
Let’s look at the line items for hi-boys and linens. We went over budget by $130 and $135. In the process of planning for this event, perhaps you realized that you needed to order more hi-boys and linens - so this increases your costs. Now that the event is over, you can leave a note stating why the actual cost increased or decreased. This will refresh your memory for this event next year.
So unless your company has a specific piece of software to use for budgets, the easiest way to create one is in Microsoft Excel, Google Sheets or good old-fashioned pen and paper.
Want to Use the Budget I Used?
Download this FREE easy budget template. It can be used in
Microsoft Excel or Google Sheets. It includes the formula to calculate the difference between your Budget and Actual numbers.
Use it over and over again!