The document discusses financial management and budgeting for events. It emphasizes the importance of good financial management to ensure expenses are covered and hopefully generate a profit. Key aspects covered include estimating event costs, determining revenue sources, calculating the break-even point for ticket sales, cash flow analysis, creating profit/loss statements and balance sheets, and establishing financial control systems. The overall aim is for financial management to recoup all expenses from the event itself.

1. FINANCIAL MANAGEMENT
AND BUDGET
Presented By-
Naresh Nogiya

2. MIAMI INTERNATIONAL FILM FESTIVAL

3.  Good Financial management by the event company will
ensure that quote given to the client at the beginning will
at least cover the expenses incurred in staging the party
and
hopefully make a profit for the company !
 Ticket revenue and other sales are expected to exceed the
expenses, thus delivering a profit to the organizers or
investors.

4.  Some necessary Questions under
financial management
1. Is the Aim to make a profit ?
• Range of Objectives, that do not include making a profit.
• Often, goods and services are provided by businesses and
individuals to assist in the running of an event,
• Still essential that all other expenses are properly approved
and documented.
• May be the objective of an event is raising money for
charity, but a target needs to be set and again , both the
expenses and the funds raised need to be accounted for
correctly.

5. 2. How much will the Event Cost?
• In a fund raising event described before, as indeed for
any non profit event, it is important to estimate how
much the event will cost as well as to keep track of the
actual expenses incurred.
• With every event , money changing hands must be
properly documented and in most cases, the financial
records should be audited.
• Expenses or costs, include fees, equipment and venue
rental costs, advertising, insurance and so on.

6. 3.What are the Revenue Sources?
• Generally, revenue is raised by selling tickets or
charging admission fees.
• Merchandise sales also contribute to revenue.
Merchandising items, such as T- Shirts and Caps, may
be sold by the event organizer or under arrangement
with the retailer whereby the event organizer earns a
percentage of any sales.
• The same arrangement may occur with food and
beverage sales.

7. 4. How many Tickets must be sold to Break Even ?
• Critical Question
• It relates to whether you decide on a large venue,
large audience and low price
OR
on a small venue, small audience and high price.
5. What is the Cash Flow Situation?
6. What Control Systems are needed to avoid Fraud

8. THE BUDGET
• Preparing a budget is part of the initial planning stage.
• A budget includes
- projected revenue and expenditure
From which an estimate of the net profit ( or sometimes
net loss) from the proposed event.
• Plan based on accurate quotes from all contractors and
suppliers.
• Provides guidelines for approving expenditure
• The budget is part of the event proposal or the basis of
the quote by the event management company to the
client.

9. Budget Items for Themed Dinner
 Fixed costs
 Band
 Dancers
 Stage Crew
 Costumes
 Theme
- Decoration
 Entrance
 Graphics
-animation logo
 Artwork and printing
 Lighting
 Sound
 Vision
 Rear Projection
 4.2*3 m screen
 Data projection
 Freight and Travel
 Labor
 Setup
 Management Fee
 Total fixed costs
 Variable costs
 Table decoration
 Food
 Beverage

10. Budget Items for Music Event
 Fixed Costs
 Venue Rental
 Artists
 Production Team
 Costumes
 Sounds
 Lights
 Visual effects
 Staging
 Printing
 Catering
 Gifts for special guests
 Photography
 Video Recording
 Setup
 Freight
 Airfares
 Ground Transportation
For guests
 Accomodation & meal
 Total Fixed Costs
 Variable costs

11. Management Fees
• Prior to contracts being signed, the event organizer
should work out the tasks involved in the event,
allocate staff to the various roles, and determine their
pay rates in order to come up with a more accurate
estimate of management costs and the management
fee to be charged.
• If a management fee is charged, the client is usually
responsible for all pre-event payments to venues and
subcontractors.

12. Break-Even Point
• To work out the break even point, the event organizer
has to estimate the number of tickets that need to be
sold in order to meet expenses.
• These expenses include both fixed costs and variable
costs.
• Variable costs increase as the size of the audiences
increases.
• When the total revenue is the same as the total
expenditure (fixed and variable), then break even
point has been reached. Beyond it , the event is
profitable.

13. Cash Flow Analysis
• Monthly expenses and projected revenue need to be
entered into a spreadsheet to establish how cash flow
can best be managed.
• A funding crisis, just days before an event, is not
uncommon in this industry.

14. Profit and Loss Statement
• A list of an organization’s revenue, expenditure and net
profit ( or net loss) for a specific period .
• Generally, the profit and loss statement (Income
statement) is prepared after the event.
• In the event industry , the budget is generally prepared
before the event and the profit and loss statement
afterward.
• In most on going business operations, budgets and profits
and loss statements are done regularly and routinely.

15.  Balance Sheet
• The Balance sheet gives you an idea of what a
business is worth at a certain point of time
• The balance sheet shows what the result would be if
all bills were paid and everything were sold (the
assets minus the liabilities).
• This result is the owner’s equity in the business.
• The problem for many event management companies
is that their assets , such as reputation are intangible!

16. Financial Control Systems
In any case, the system should have checks and balances to
make sure that
• Purchases or other expenses are approved
• Goods and services meet specifications
• Payment is approved
• Accounts are paid
• Incoming revenue is checked and banked
• Revenue totals are recorded correctly
• Debts are met
• All transactions are recorded and balanced
• Taxation requirements are met

17. • Financial matters are correctly reported to stakeholders.

18. CONCLUSION
Long term financial results are an important
consideration in event management. The Aim of
financial management is for all expenses to be
recouped at the time of the event. There is need
to be remembered that, Not all events are profit
oriented.

19. References
• “Event Management for Tourism, Cultural, Business
and Sporting Events”
by Lynn Van Der Wagen &
Brenda R. Carlos