The Sinking Ship: What You Need to Know About Fixed Expenses

“The good news is that fixed expenses should be fairly easy to predict.”

Here’s what everybody needs to know about sinking ships …

Benjamin Franklin once said:

Beware of little expenses. A small leak will sink a great ship”.

I love to write about event budgets and this time I am ranting on fixed expenses – those pesky little expenses that remain the same, no matter how many attendees come to your event.

Or do they?

Things like entertainment costs, speaker fees, audio visual equipment and venue rental typically stay the same whether you have 20 attendees or 2000. For example, when you need an Emcee for your event he/she is most likely charging you a fixed amount for a block of time – it makes no difference whether he or she is hosting an event of 6 people or 600.

The good news for those who dislike event budgeting is that fixed expenses should be fairly easy to predict. Armed with your quotes and budget history from past events (quotes are enough if you don’t have a budget history), it is a pretty simple exercise to plug in the costs that you know will remain relatively stable throughout the planning process.

There’s a BUT coming here …

This holds true unless you make drastic changes to the original requirement for that particular expense. If the original ask changes, you can expect to see changes in the cost of the product or service too.

Here’s where those small leaks creep in and threaten to sink the mighty ship!

I see it most often with event audio visual services. You find your supplier, you agree to the equipment and labour you need and the corresponding amount for the service and then boom! You get onsite and there’s a last minute addition to the AV:

 

A speaker is asking for a wireless mic that was not part of the original order!

Media shows up to cover the event and you need a feed!

You forgot to order a hardwired internet connection for the social media screen!

Last minute additions can add hundreds and thousands of dollars to your final AV invoice. This is the perfect example of a fixed expense that doesn’t fluctuate based on the number of people at your event, but also didn’t stay constant.

Hot Tip: Budget conservatively with your fixed expenses and plan for little extras or unforeseen that may pop up.

I go into WAY more detail on budgeting for fixed event expenses and and other types of expenses in Volume III of my eBook. It has 20+pages about event-related expenses and tips on prepping an event budget. Get it HERE.

Until then, I wish you best of luck in keeping the leaks at bay and your ship on course! Ahoy!

PS – If you’re taking on too much water or if you’re tired of bailing out the boat, let me know. I secretly LOVE event budgeting and would be happy to help you steer the ship and corral those fixed expenses in your budget. Book a consult with me TODAY!