Confusing Tools and Goals
Next to the economic and financial data, it is useful to work with some basic ratios or margins. When you talk about budgeting typically you refer to ROI (Return on Investment). This ratio provides evidence of the profitability of an event. The risk is to refuse some good situations because it seems that return on the investment will not satisfy a specific target amount. Many times we’re actually shooting for return on impression or experience in order to get people talking. It is more difficult to see that return immediately.
“The devil is in the details” is a common way to express the necessity to look deeply at all figures. When you create an event budget do not make the mistake of trying to break the revenues, the costs, cash inflow and cash outflow in too much detail. Instead, make sure you capture the needs and costs as well as payment terms. A budget that is too detailed is difficult to understand and your team may feel intimidated embracing it. If they’re afraid to use it, you can bet that things will not get updated so simple and functional can be better.
Using the Wrong Tools
Using an Excel file or Google Sheets with some, clear and key headings is an efficient way of building your event budget and makes it easy to share and keep it up to date. It’s not always good to rely on accounting software that you find online which may permit you to create a budget but may not be very easy to manipulate.
Replicating the Past without Learning
Everyone involved in the event budget process should look at each specific case, rather than replicating the past. Think about a new situation with enthusiasm and try to understand key problems related to the budgeting of this specific event