2009 Budgeting that Makes Sense karen m. king, cmp, cmm principal meeting strategists, llc

Learning Objectives  How to develop a budget that is easily reviewed.  How to work with your budgets to make sound recommendations.  Budget management techniques  Budget based negotiations skills  How to reconcile to your budget forecast once your event is over.

What’s first - define Three simple questions:  Who – is the audience  Why – are you meeting  How – should this meeting look It is crucial to set your objective!

Objectives? Define the meeting objectives :  Helps you develop the program  Identify what is essential vs non-essential  Keeps you on track  Provides a reference point throughout the planning process  Provides you with the stated goal that you may need to remind your client of

Establish the Line items  Hotel  Guest rooms (including comp’s)  Meeting room rental  F&B estimate  Staff expenses  AV/Production  Misc equipment  Electrical  Travel  Speakers  Meeting management  Registration  Recreation  Spousal activity  Evening events  Entertainment  Print material/marketing  Give away items

Understand the basics Indirect costs ARE always there. Fixed Expenses are NOT dependant upon counts/attendance Variable Expenses ARE impacted by number of attendees

Fixed vs Variable Fixed  Supplies  Speakers  Entertainment  Staff time  A/V Variable  Brochures  Food & Beverage  Save-the dates  Transportation  Recreational events  Overnight rooms  Flower arrangements

Hotel fees Guest room rates:  Base rate - $199  Resort fee - $15  State tax – 5%  City taxes – 3%  Room tax – 2.3%  Final room rate is $236.04

Food & Beverage Load your cost  What is the gratuity – 12%  Service charge – 5%  Sales tax – 5% A bottle of water becomes $4.91 each!  $4.00 – posted cost  $0.48 – gratuity  $0.22 – taxable service charge  $0.21 – sales tax

Remember! You must estimate costs  Refer to history/documents from past  List all line items  Extend out all line items  Allow a cushion  Separate/analyze major line item decisions

What does it look like?

Roll up your loaded f & b

Working with the data Prioritize!  Identify essential vs non-essential spending  Identify areas for cost containment  Know the terms of your contracts  Attrition  F&B minimums  Meeting room rental  Minimize RISK

What’s next? Budget management techniques:  Re-evaluate the meeting to the established objectives  Eliminate the fluff  Scrupulous attention to cost  Question the spend  Evaluate attendance guidelines (corporate)  Be prepared to sacrifice short term goals in order to meet long term objectives

Break even Analysis If you are planning meeting with the objective of generating revenue utilize this formula: Registration fee = Fixed + Variable expenses # of attendees X = Fixed + Variable expenses # of attendees

Break even Analysis Break Even Units = Total Fixed Costs (# of attendees) Contribution Margin

Renegotiate? Today’s challenges:  Understand short term vs long term objective  Think outside of the box  Share information  Offer solutions  Minimize RISK  Become a strategic partner

Know the value Budget based negotiation…..  What is your piece of business worth  What is essential vs non-essential to your client  Make smart decisions

Billing strategies: Become knowledgeable with the facility requirements and pricing.  Deposits  Payment schedule Provide the facility with your accounting needs in advance.  Clearly identify authorized signers!  Identify sub-master accounts

Sub-master accounts Allow you to break up your charges into appropriate categories or buckets  Communicate the billing break down clearly and concisely to the property and your internal staff  Allows smoother reconciliation

After the meeting…. Reconciliation:  Review the invoices  On-site review charges daily  Review the master account at the conclusion of the event  Errors occur  Were instructions followed?  Reconcile to the budget  History!  Identify cost savings  Identify overspending