By Bill Hanson, Associate Executive Director, San Antonio Sports

Our last post defined most of the revenue items for a sports event budget, with promised follow-up on the expense items. Sports Commissions, CVBs and local youth organizations all face the same challenges when creating a realistic budget for a bid or for  a potential event. While your budget will certainly begin with very generic categories, it is the detail within those categories that creates frustration and, eventually, large deficits. The most experienced event managers know that they must constantly ask the question, “what other expense can I expect”, but the most inexperienced person benefits greatly by asking the same question.

Here’s a simple, but very common, example: Accommodations. Having determined the number of persons needing rooms, you call the hotel, get a daily room rate, enter your calculations into your budget, and move on to the next item. Upon receiving the hotel’s final billing, you find this category as much as 30% over budget. Why? Because you did not ask about additional expenses and take the measures needed to control them or to budget for them. Besides the basic room rate there is a room tax of 8-15%, plus the possible add-ons for parking, telephone, internet service, in-room movies and games, laundry and room service. Asking that aforementioned question could have remedied the problem.

Budgeting, like event operations, is a matter of details. The success of your budgeting effort is dependent upon the amount of detail put into it. Two of the most common downfalls of event budgeting are “clumping” and “miscellaneous”. Clumping 12-15 possible expenses into the Administrative category, for example, will give you a seemingly comfortable budget number, but it is an excuse for not thoroughly researching expenses for communications, computer services, postage, office equipment, office supplies and printing, just to name a few. Allocating a number of small items to a Miscellaneous or Other line item is both easy and widely used, until that time when that amount becomes the largest in the category.

We wouldn’t presume to know all of the basic categories for an event budget, but based on experience, here are 21 of the most common:

• Accommodations
• Administrative
• Ceremonies
• Contingency
• Exhibitions/Trade Shows
• Food Service
• Hospitality
• Insurance
• Marketing
• Media & Public Relations
• Medical
• Merchandise
• Officials
•  Participant Services
• Printing
• Rights Fee
• Salaries
• Site Visits
• Transportation
• Venue
• Volunteers

Each of these categories will consist, on average, of four to ten specific line items. Each of these will be specific to your particular bid or event. When considering the Contingency amount, 10% of your expense total is usually a good number. Administrators who are constantly expected to format budgets might find it useful to create a budget template starting with the listed basics and adding related line items to each. Formatting a specific budget then requires the deletion of non-related categories.

There’s no doubt that experience is the best teacher, but we can shorten your learning curve by sharing ours. Here are some tips about various expense categories:

Postage—There’s an obvious difference between the current 41-cent per piece rate and a bulk rate or temporary permit, but be sure to research the regulations regarding bulk mailings. Errors in the printing, sizing or sorting of your mailer could easily result in the entire shipment being held at the post office and eventually returned to you.

Insurance—Whereas General Liability is the most common insurance required for renting a facility for your event, you must be aware of the coverage requirements and whether Excess Liability or Participant Medical coverage is needed. If you’re borrowing vehicles for VIP use, that’s another consideration, and special  coverage may be required for events such as dodgeball, trampoline and equestrian.

Printing—There is no shortcut to learning about the various methods and costs of printing. Items ranging from simple flyers to multi-page programs need research and competitive bids if you want to keep expenses under control. Color-on-color versus full color processed, standard sizing versus custom, and photo copying versus offset printing are just a few options you should explore for any of your printed items.

Salaries—Contract labor is probably the best way to handle temporary labor needs, but if your organization wants to hire one or more persons for a project, don’t forget to budget the payroll taxes and social security on those wages.

Finally, there are Venue Costs. We cannot nearly enough impress upon you, the budget manager or the event manager, the need to carefully read the venue contract. Signing that contract and paying the rental fee most likely won’t even open the facility doors for you.  Extra assessments are possible for tables and chairs, security, ushers, supervisors, sound and lighting, scoreboards, signage, decorating, rigging, merchandise sales, catering and corkage, janitorial and parking, just to name a few.

And that’s it for sports event budgeting. Your revenue projections need to be conservative and realistic, and your expenses should be thoroughly researched.