I was recently asked in an interview how I manage a client’s event budget. (For this post I am going to speak specifically about a corporate client budget.) My response to their question was that I approach a client’s budget in two different ways, depending on the client and our discussions up to that point.
The first way is to use the client’s budget numbers they gave us. For example, a client says, “I have $35,000 to spend on the event” so from there we create their event while ensuring that the costs of the event stay within their budget. This is the safe way of managing a client’s event budget and is generally straight forward. The challenge with this way is that sometimes what the client is envisioning as the final product is simply not possible within their numbers making your job as the planner much more difficult.
The second way is to have a client present you with their proposed concept for their event and they ask you to price it out as a dream event so that they can see what the cost would be. This way is fun and exciting but can also result in much more work for us as the planner because we put a great deal of time and energy into researching all the details and sometimes end up planning an event that is a fraction of what they were dreaming of. But! Sometimes it works and a client sees the potential and the budget ends up being more reasonable then they thought and they give us the go ahead.
In both scenarios my preference is to always start by discussing with the client what their priority is for their event. Is the location the most important? Is the food the most important detail? Is the entertainment the key to the success of this event? Whatever their focus is, that’s where we start in their budget.
In a case where the client has a specific budget, if their focus was on the location, for example they want the event to happen close to their office or close to the airport, then our attention would be focussed on booking the venue first. Determining the ideal location will settle the rest of the budget. Of their $35,000 budget we determine the best venue for their event is going to cost them $7000 to rent which then leaves us with $28,000 to manage the rest of the event. By working this way it also determines several other details of the event without leaving much selection for us as the planner or them as the client.
So let’s say that the $7000 venue is a hotel located only a 10 minute taxi ride from the airport. It will be perfect for all the guests arriving by plane because their taxi ride is short and the event will be happening in the same hotel that they will be staying in over night.
However, the client really had wanted to hire a Thai food truck they’d eaten at the week before for the food portion of the event. Because we were limited in location choices we had no choice but to choose that venue and as the rules go for most hotel style venues, in house catering only. What the client had assumed for their food budget, $4125, has now jumped to $9800 because the venue’s menu starts at $55 per person and what they really want to serve for food choice is going to cost more than a standard buffet.
We’re now working with $18,200 to book their entertainment, hire the AV company, source the decor company, pay for the hotel rooms for all the guests that are flying in, and purchase all the swag for the guest welcome bags. Of course all do-able, because that’s what we do best, but potentially challenging from the planner’s perspective.
In the case where we are pitching a dream event scenario and the client’s focus is also on the venue or location of the event it sometimes plays out a little differently. In this case their dream vision for the event is a rooftop event (can’t wait until we get asked to plan a rooftop event!) so our job is to locate every rooftop option available to them. In their budget we explain that the rooftop option is going to cost them $11,500 plus the additional expenses of bringing in the only catering company in their city that serves the Hawaiian style menu they specifically want ($17,300) and the open bar (Hawaiian signature cocktails…wooohooo!!) at an estimated expense of $75 per person, the entertainment, the decor, the gifts for the guests, the valet parking, the customized over the top invitations that will be hand delivered to every potential guest (rather than just thrown in the mail)…and the list goes on…dream events don’t have an ending, they just keep getting better with every idea.
So let’s say the final proposal we put together for them gets their dream event coming in at $115,000. Working a budget this way can essentially go in two directions – the client thinks the budget looks reasonable for what they are after and tell you to go ahead (ya baby!) or the client screams out “what!!” and tells you that they had no idea it would cost that much and only have about $35,000 to spend. Both scenarios happen all the time and that is the chance you take.
In both instances, the client often simply has no idea what an event costs. They are not in the event industry, they don’t know what venues rent for, they have no idea what it costs to feed 75 people a 5 course meal or that it costs way more to bring in a food truck for an event then it costs to buy a meal from a food truck on the street.
As the event planner it is our job to have not only the ideas to make their event into something more than they imagined it could be but also to manage their budget accordingly. When a client gives you a specific budget it is safe and relatively easy to manage, often the biggest challenge will be to manage your client’s possible disappointments throughout the process when they realize they can’t necessarily have everything they thought they could within their budget.
Working with a dream budget is fun and exciting and the potential of the event is what we all dream of as event planners. When the client comes back and says it’s more than what they were expecting to spend, as long as their budget is still reasonable (in this example let’s say the client was hoping to do it for $100,000 instead of $115,000) then you continue to work based on priorities and spend the most important money first and find your way to the end of the budget including as many details as possible that you had included in the initial proposal.
As I am sure you have figured out already, an event budget goes up and down throughout the planning process and if you’re good at what you do, in the end you’ll end up exactly where you told the client you would. And if you are really good…you get them more than what they envisioned for less than they expected.