Creating an Event Budget: Step-By-Step Guide

One of the key aspects of planning and hosting an event is to estimate and create a comprehensive event budget. 

The event budget should be established as early as possible since it will dictate many different aspects of the event and help you to avoid unwanted surprises. 

Without an event budget in place, you are literally setting yourself up for disaster: running out of money for promoting your events, don’t have any emergency funding, and so on. 

With that being said, here we will share our step-by-step guide on establishing an event budget. By the end of this guide, you’d have learned about: 

• How to accurately estimate an event budget based on your event strategy
• How to allocate your budget on different aspects of the event’s needs
• How to effectively track and manage budget usage
• How to evaluate budget usage in the post-event stage

Without further ado, let us begin right away. 

Step 1: Identify Your Event’s Needs

Establishing an event budget (or any budget), is essentially about finding the balance between the event’s needs and how much money you can spend. 

It’s typically best to design the event around the available resources you can secure (including sponsorships), and not the other way around. For example, if you are confident you can secure $10,000, then start with this number. 

By now you should’ve also identified the type of event you are going to plan (i.e. a trade show, and you can list the event’s needs including: 

• Budget
• Speakers/talents
• Employees and volunteers
• Branding collaterals
• Food and beverage
• Marketing
• Event technology and infrastructure
• Equipment
• Transportation

And more. 

If you’ve hosted past events, you can use the data from these past experiences to figure out the must-have needs for your event. You can also research similar events in your area for common trends. 

At the same time, discuss the projected high-level budget with your internal stakeholders (and external stakeholders if you, for example, have retaining sponsors). The earlier you communicate the high-level budget plan, the better since you can avoid future surprises and secure the buy-in from stakeholders ASAP. 

Step 2: Estimate Costs In Detail

Now that we’ve identified the must-have needs of the event and the high-level budget, the next step is to estimate the costs for individual items on your list.

The goal of this step is to have a detailed budget for individual items. The more accurate and detailed the budget is, the better. 

The actual list might vary depending on the event itself, but ideally, you should break down the budget into different elements. Here is an example of a typical large-scale event: 

Catering

• Food and beverage
• Equipment and tools
• Additional staffing

Venue and Equipment

• Venue
• Digital infrastructure like event planning software
• Ticket registration
• Office supplies
• Furniture rental

Decoration

• Venue decoration

Marketing

• Online advertising
• Offline advertising
• Influencer marketing
• Referral commissions

Transportation

• Staff transportation
• Talent transportation and accommodation

Contingency

• Equipment failure
• Failure of talents to arrive on time
• Weather issues
• Breakage/losses
• Injuries and accidents
  

Don’t forget your contingency fund. As we know, even the most well-planned events will always have something unexpected. You should allocate at least 20 to 25% of your total event budget for contingency and emergency. 

Gradually reach out to potential vendors for quotes when planning this budget so you don’t have to pile up your vendor outreach efforts. Also, use this time to choose the right vendors for each element of your budget, and if possible, lock the vendors with written contracts as early as possible. You should especially secure your venue and your date as early as possible. 

By the end of this step, you should have developed a detailed budget estimation as the foundation for your event planning. 

Step 3: Monitor Budget Usage

In the previous step, you should’ve booked your venue and chosen at least the crucial vendors. Probably you’ve also paid some of your vendors.

In this step, our focus is to make sure the event planning and execution go according to plan so the event stays within budget. 

Record the actual spending for each element of your budget, and monitor them. Small deviations are okay, but if you stray too far away from your projected budget, you should adjust your strategy accordingly. 

This is where your contingency fund comes in so you are prepared to handle additional expenses and major changes in your plan. This will help keep you from going over your budget, which can be an issue when you report the budget usage to your stakeholders. 

However, even if you’ve planned contingency or emergency funds beforehand, it’s still important to also get your stakeholders’ sign-off so they are aware and prepared. 

One of the key purposes of creating an event budget is to keep yourself accountable, so make sure it stays that way. 

Step 4: Evaluation

If you’ve monitored your actual budget usage carefully in step 3, then this step should be very easy.

Once your event has concluded, revisit your contracts and track your spendings to ensure you’ve settled all payables. Also, this is the time to re-check your budget and make sure every single cost has been recorded.

Identify your total spend, and report this with your stakeholders accurately and in detail. This will especially help in evaluating your event’s performance. 

Identify areas where you underspend and overspend. If you are planning to host other events in the future, then these can be very valuable insights. Analyze areas on your budget that can be further optimized, and areas that have been working well so far. 

Wrapping Up

Accurately estimating and planning your event budget are very important in ensuring the success of your event.

However, it’s no secret that planning an event budget can be challenging if you don’t know where to start. It’s crucial to plan your budget as early as possible, and by following the four simple steps we’ve shared above, the process of planning your event budget should be more streamlined and manageable. 

It’s also crucial to monitor your budget usage and evaluate it after the event has been concluded. They can provide valuable insights and make it easier for you to plan another budget for future events.