Financial Administration Welcome to Special Events Financial Administration Chapter Five Welcome © John Wiley & Sons, Inc. 2004 © John Wiley & Sons, Inc. 2002 1

AGENDA Welcome and review Opening activity Mini lecture “Financial Administration” Discussion Concluding Activity Assignment Adjournment © John Wiley & Sons, Inc. 2004

Budgeting Financial philosophy Profit Break even Loss leader Projections and estimates History Macro and micro economic factors Types of financing © John Wiley & Sons, Inc. 2004 © John Wiley & Sons, Inc. 2002

Typical Expenses Accounting Advertising Advertising specialties Décor Entertainment Evaluations Event managers fee Food and beverage Videography © John Wiley & Sons, Inc. 2004 © John Wiley & Sons, Inc. 2002

Typical Income Registration fees Sponsorship fees Grants and gifts Exhibit fees Advertising fees Concessions Parking © John Wiley & Sons, Inc. 2004 © John Wiley & Sons, Inc. 2002

Account Codes 100 Marketing 101 Advertising 102 Direct mail 103 Public relations 104 Promotion © John Wiley & Sons, Inc. 2004 © John Wiley & Sons, Inc. 2002

Fixed Overhead Expenses Predictable items such as rent, salaries, insurance, telephone and other standard operating expenses that continue whether or not you conduct the event. © John Wiley & Sons, Inc. 2004 © John Wiley & Sons, Inc. 2002

Variable Expenses Catering Audio visual rentals Registration materials Those items that fluctuate in cost based upon the number of guests © John Wiley & Sons, Inc. 2004

Break-even point= total fixed costs contributional margin 300 = $3000 $10 © John Wiley & Sons, Inc. 2004

Accounts Payable Negotiate the best terms Settle accounts on time © John Wiley & Sons, Inc. 2004

Controlling Purchases Use purchase orders Do not allow substitutions without permission © John Wiley & Sons, Inc. 2004

Foreign Exchange Rates The price of one currency expressed to another currency. Market conditions affect the strength of currencies. Predictable government policies help strengthen currency values. © John Wiley & Sons, Inc. 2004

Application Activity Create a budget for a festival, convention, exposition, and corporate product launch event. Calculate the break even point for each event. © John Wiley & Sons, Inc. 2004

Assignment Reader chapter six © John Wiley & Sons, Inc. 2004

Adjournment Good Luck! © John Wiley & Sons, Inc. 2004