1. THE COST OF DOING BUSINESS

2. GOALS OF TODAY’S WORKSHOP To demonstrate the factors that determine how a government meeting is planned To explain the perspectives of both meeting planners and suppliers To introduce you to resources offered by SGMP www.sgmp.org

3. Supply versus Demand In today’s environment the cost of an event is influenced by many factors Scope and size Potential cost Potential profit Cut backs Budgets Other?

4. MOST GOVERNMENT MEETING PLANNERS… www.sgmp.org Wear many hats – planning events are usually part of “additional duties as assigned.” Plan most events with a bottom line, break-even objective. Have limited on the job training in meeting and event planning.

5. WHILE MOST SUPPLIERS… www.sgmp.org Are “green” when it comes to the government market. Do not know how to find a government meeting planner. Receive limited training in event planning.

6. www.sgmp.org Cover costs Make money

7. www.sgmp.org Current per diems Meeting history Sponsors, grant money, registration fees Estimates from printers, vendors Hotel sales kit samples (F&B, AV, meeting room charges, taxes, gratuity)

8. www.sgmp.org Show how registration costs are determined Keep notes of how potential costs are calculated Organize all expenses under cost centers

9. www.sgmp.org Remember guarantee counts are paid for even if they do not attend! Use meeting history if available Know your audience Determine any potential conflicts (holidays, transportation) Be realistic

10. BREAK-EVEN FORECASTING www.sgmp.org Meeting Room Rental A/V expenses

11. www.sgmp.org Food and Beverage Parking BREAK-EVEN FORECASTING

12. www.sgmp.org Registration Fee – Variable Costs BREAK-EVEN FORECASTING

13. www.sgmp.org Total Fixed Costs Contribution Margin (Registration Fee – Variable Costs) BREAK-EVEN FORECASTING

14. www.sgmp.org Your registration fee is $20. Your supplier charges you $1,000 for room rental, $100 for audio visual, and you pay $500 for a speaker. You are charged $10.00 per person for food and beverage service. How many attendees do you need to cover your costs? BREAK-EVEN FORECASTING Break Even Attendance = Total Fixed Cost / (Registration fee – Variable Costs) Break Even Attendance = ($1000 + $100 + $500) / ($20 - $10) Break even Attendance = $1600 / $10 Break Even Attendance = 160

15. www.sgmp.org Federal State Local Federal State Local

16. www.sgmp.org

17. Number of Rooms Rooms to Space Ratio Date and Pattern Catering Revenue Potential Meeting Room Rental Audio Visual Revenue Other Revenue Centers

18. www.sgmp.org Labor 31.6% Food 19% Benefits 8.2% Cost of Sales 4.5% Management fees 5% Security 2% Admin and Accounting 3% Laundry 2.6% HR and Engineering 1.5% China Glass Linen 3.6% Uniforms 1% 82% of total costs come from:

19. www.sgmp.org Banquets 35%-38% Beverages 18%-21% Guest rooms 70% to 75%

20. www.sgmp.org Give accurate information Be flexible with dates Work with Suppliers that understand your business (like SGMP members!) Keep histories of your past events Don’t let the lowest price for your RFP be the deciding factor. Remember value also should be considered in your decision Know the difference between your needs and your wants Be realistic when making your budget

21. www.sgmp.org Understand the RFP process Know your hotel’s profit margins and how to evaluate the business Be willing to work with per diem rates and menus Be able to offer value added incentives to help planners keep costs down Be proactive and create government meeting package based on planners budget Be flexible and offer more than one option on dates Be creative with per diem priced menus