Event Budgeting: All About Variable Expenses

“Variable expenses can be WAY more challenging to predict than fixed event expenses, because they will almost certainly go up or down.”

 

Variable Expenses 101

A budget is said to be ‘a mathematical confirmation of your suspicions’.

I hate to tell you this, but when it comes to calculating the variable expenses in an event budget, you’re going to need to dust off those high school math skills.

Buckle up.

We’re talking about variable expenses – the expenses are the ones that are directly impacted (up or down) by the number of people who attend your event – i.e. food and beverage or supplies for the registration desk or transportation during the event.

Variable expenses can be WAY more challenging to predict than fixed event expenses, because they will almost certainly go up or down. That’s what ‘variable’ means – liable to change.

Be prepared to budget for these 3 possible scenarios:

  1. low attendance
  2. regular attendance
  3. high attendance

By developing a budget at each level of attendee turnout, you can better predict how much you will be paying for each event expense that has a direct link to whether or not there is a bum in the seat.

I love creating budget scenarios related to event attendance because it gives the client (or your boss or your board members) a clear picture on how things change from a financial perspective as it relates to the # of people in the room.

This is where those math skills come in…

Food: The Most Common Variable Event Expense 

The biggest variable expense for most events is food and beverage. If more people attend, it follows that you will need more food and more beverages. Your first step in budgeting for f & b is to determine the per person cost. See what I mean about math?

Plug your per person cost for food and beverage into the budget for each attendee turnout possibility and voila! You’ll see exactly how much extra expense you are incurring (or saving) if the # of attendees rises or falls.

Side bar …. food and beverage costs are not just about what people eat and drink. There may be additional charges that you need to consider, such as taxes, service fees, and gratuities. You may also be paying for cutlery, linens or glassware that may be charged on a per person basis or by the dozen. More math is required.

 

Other Types of Variable Event Expenses

You will also need to consider the impact of other types of variable expenses like registration supplies (name badges or event accreditation, lanyards, gift bags, and swag) because more attendees usually equals more stuff for the attendees.

Transportation can also be a variable expense – how many seats on the bus will you need? How many buses do you need overall?

Compared to your food and beverage fluctuations, these expenses have less of an impact on your budget bottomline, but they still need to be factored into each of your budget scenarios. And, these are just a few examples of event variable expenses! I go into WAY more detail on these and many others in Volume III of my eBook.

Conclusion

Understanding how variable expenses and event attendance impact an event bottom line is an important skill. Put some fresh batteries in your calculator or brush up on your Excel skills because it’s number crunching time!

Or, if math makes you break out in hives, you can reach out and ask for help with your event budget – we LOVE event budgeting and would be thrilled to dive into it. You’d be shocked at the number of times we have saved an event from financial disaster by applying our savvy event budgeting skills.

Happy budgeting!