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, sponsor’s
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 don’t 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 – 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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