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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