Budgeting/Finance Information

 

Conference Expense Category Possibilities

 

1. Printing/Design

        Advance letter

        Brochure

        Binders

        Ribbons

        Signs

2. Bulk Mailings

        Brochure

        Handling

        Mailing labels

        Mailing lists

3. First Class Mailings

        Confirmation letters

        Speaker packets

        Foreign mailings

        Press releases

4. Promotion

        Ads

        Survey/research

5. Speaker Costs

        Lodging

        Travel

        Meals

        Honorarium

6. Program Committee Costs

        Long distance calls

        Mailings

        Lunch meetings

7. Hotel Costs

        Day package

        Reception

        Dinner/meals

        A/V

        Miscellaneous

8. Reproduction/Copying

        Handout packet materials

        Confirmation letters

        Press releases

        Rosters

        Miscellaneous

9. Suppliers

        Name tag holders/materials

        Envelopes/stationery

        Registration supplies

        Miscellaneous

10. General Miscellany

        Speaker gifts

        Entertainment

        Trips and tours

        Staff meals

        A/V operators

        Equipment

        Vans

        Photographer

        WWW access

 

Some Definitions

 

1.     Sunk costs - those investments, loss-leader costs, and other money you spend before you even know if you will have enough income or registrations to hold the conference (printing, brochures, mailing lists, etc.)

2.     Fixed costs - those costs you incur no matter how many actually attend (honoraria, rentals, a/v, etc.)

3.     Variable costs - those fees you pay for each person who attends (meals, handouts)

 

Conference Budgeting Steps

 

1.     Understand clearly the purpose, history, sponsorís expectations, etc. before you begin the process.

2.     Determine your sunk, fixed, and variable costs

3.     Set a registration fee in terms of your desired break-even or profit requirements

4.     Carefully manage your budget and conference expenditures to meet your financial goals

 

Figuring the Break-Even

 

1.     Establish a reasonable registration fee (what you believe is reasonable for your audience and at a level where you donít drive away potential participants because of costs--always a tricky process)

2.     Negotiate with the hotel or convention bureau the per person variable expense

3.     Determine your fixed and sunk expenses (actual or budgeted minus income from sponsors, donors, etc.)

4.     Determine the needed number of registrants to break-even by subtracting the per person variable expense from the registration fee to arrive at a contribution toward fixed and sunk expenses. Then divide the total fixed and sunk expenses by this participant contribution to arrive at a break-even number of registrants

 

Budgeting/Break-Even Example

 

1. Establish a reasonable registration fee

 

$††† 100

2. Negotiate the per person variable expense

 

$††††† 50

3. Subtract #2 from #1 to obtain per person contribution toward fixed expenses

 

$††††† 50

4. Determine your fixed and sunk expenses (actual, negotiated, and/or budgeted)

 

 

Postage

$††† 400

 

Brochures

$††† 600

 

Speakers

$2000

 

Room Rental

$††† 500

 

A/V Devices

$††† 500

 

Miscellaneous

$1000

 

Total

$5000

 

5. Record again the per person contribution toward fixed expenses

$††††† 50

 

6. Divide #4 by #5 to obtain the break-even number of participants

††

†† 100

 

Your Turn Ė A Practice Opportunity

 

1.     In consultation with your conference committee you believe that $200 is a reasonable registration fee for the 2.5 day conference.

2.     You have negotiated with the Sheraton Hotel a per person variable expense of $150 to cover three meals, four refreshment breaks, registration folders, name badges, and the on-site registration process.

3.     You estimate that the total fixed and sunk costs for your conference will be $7500.

4.     Approximately how many people do you need to attend your conference in order for you to break-even?

5.     How much profit would you obtain if double that number attended?

6.     What would the break-even number be if you set the registration fee at $250?

 

Break-Even Worksheet

 

1. Determine and acceptable registration fee†††††††

$______

2. Per person variable expenses†††††††

$______

3. Subtract #2 from #1 for a per person contribution toward fixed/sunk expenses

$______

4. Total fixed and sunk expense

$______

5. Record again the per person contribution toward fixed/sunk expenses

$______

6. Divide #4 by #5 to obtain the break-even number of participants

_______

 

____________________

Created January 1, 2009

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