Are You Running a Profitable Event? MICHAEL FOREMAN

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Are  You  Running  a  Profitable  Event?  

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MICHAEL  FOREMAN    

Born  and  Educated  in  Durban,  South  Africa  

1994  –  started  working  as  a  registraFons  exec  in  a  

European  PCO  based  in  Tel  Aviv  

1999  –  Moved  to  London  and  worked  For  

InternaFonal  PCO’s  in  Business  Development,  

ExhibiFon  and  Sponsorship  Sales  

2003  –  Set  up  Confab  ConsulFng  

2009  –  Sold  and  became  Kenes  UK  

2011  –  Chair  of  ABPCO  

2012  –  LeT  Kenes  to  become  and  Independent  

Consultant  to  the  AssociaFon  Sector  

 

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OVERVIEW  

Profitability  

Event  Organising  –  a  Professional  Service  

ObjecFve  SeZng  

Profitability  Case  Study  

Event  and  Staff  CosFng  

Cash  Flow  

Time  Measurement  

RecommendaFons  and  Tips  

 

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PROFITABILITY  

What  is  profitability?  

•   The  state  or  condiFon  of  yielding  a  financial  profit  or  gain  

•   Profitability  is  the  primary  goal  of  all  business  ventures.    

•   Without  profitability  the  business  will  not  survive  in  the  long  run.    

•   Measurement  of  current  and  past  profitability  and  projecFng  

future  profitability  is  very  important.      

How  does  this  relate  to  events?  

•  Every  event  should  be  treated  like  a  small  business,  with  

•   A  budget  (income  and  expenditure)  

•   A  business  case  

•   A  strategy  

•   A  project  plan  

•   An  ongoing  analysis  through  the  phases  of  the  event  

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Event  Organising  –  A  Professional  Service?  

Are  You  Running  a  Profitable  Event?  

 

In  order  to  ensure  profitability    

1st  and  foremost  we  must  recognise  that  Event  

OrganisaFon  is  a  Professional  Service!!  

“Why  will  clients  pay  a  lawyer  by  the  hour  without  any  

quesFons  but  when  it  comes  to  Professional  Conference  

Organising  their  brains  go  to  jelly  and  they  cannot  get  their  

head  around  paying  a  fair  fee  for  a  valuable  service?”  

Is    Event  management  considered  a  profession  or  

something  that  someone  can  “bolt”  onto  their  day  job?  

When  charging  a  professional  skill  we  must  

measure  our  Mme  to  ensure  profitability.    

 

 

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OBJECTIVE  SETTING    

Before  any  event  is  planned  one  should;    

1.  Define  the  ObjecFves  of  the  Event  

•  Profile  

•  EducaFon  

•  Membership  benefit  

•  Networking  

•  Fundraising  

2.  Define  the  measurement  criteria  for  success  

•  Increased  delegate  adendance  

•  Profile  

•  Profit  

3.  Define  the  tools  to  measure  those  criteria  

•  Increased  Adendance  –  RegistraFon  ReporFng  System/Leads  Tracker  

•  Profile  -­‐  PR  coverage    

•  Profit  –  Robust  AccounFng  Systems    

   

 

 

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WHAT  IS  PROFITABILITY?  

 

Was  your  event  Profitable?  

Typical  Answers  that  I  hear  as  a  Professional  Planner

   

• Yes,  We  had  1000  people  adending,  we  only  expected  half  of  that!!  

• Actually,  the  1000  people  caused  the  organiser  to  take  on  extra  space  at  the  

venue,  extra  catering  and  extra  staff  at  the  last  minute.  The  extra  500  were  all   students  that  paid  a  very  discounted  rate.  

• Yes,  we  made  much  more  sponsorship  than  we  expected!!  

• The  addiFonal  sponsorship  caused  the  organiser  to  put  on  extra  social  events,  

beder  catering  etc  which  leT  the  event  with  the  same  bodom  line  

• Yes  we  made  £10,000  from  the  congress!!  

• Various  key  elements  were  not  included  in  the  event  budget  which  actually  

cost  more  than  the  so  called  £10,000  profit.      

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Profitability  Case  Study  –  Is  my  Annual  Conference    Profitable?  

Are  You  Running  a  Profitable  Event?  

Conference  Income   AssociaMon  Income    

RegistraFon  Fees   £100,000   Congress  Surplus   £35,000   Sponsorship   £50,000   Membership  Fees   £100,000  

ExhibiFon   £50,000   Journal     £50,000   Other   £35,000   Grants   £50,000   TOTAL   £235,000   £235,000   Conference     AssociaFon  Expenses   Expenses   Venue   £75,000   Rent   £75,000   Catering   £50,000   Staffing   £50,000  

Web,  Print  and  PromoFon   £50,000   EducaFonal  AcFviFes   £50,000   Other     £25,000   PR  and  Comms   £60,000  

TOTAL   £200,000   Total   £235,000  

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Are  You  Running  a  Profitable  Event?  

Conference  Income   AssociaMon  Income    

RegistraFon  Fees   £100,000   Congress  Surplus   £0  

Sponsorship   £50,000   Membership  Fees   £100,000  

ExhibiFon   £50,000   Journal     £50,000   Other   £35,000   Grants   £50,000   TOTAL   £235,000   £200,000   Conference     AssociaFon  Expenses   Expenses   Venue   £75,000   Rent   £75,000   Catering   £50,000   Staffing   £15,000  

Web,  Print  and  PromoFon   £50,000   EducaFonal  AcFviFes   £50,000  

Other  inc  staff   £60,000   PR  and  Comms   £60,000  

TOTAL   £235,000   Total   £200,000  

Profit/Loss   £0   Profit/Loss     £0  

Profitability  Case  Study  –  Is  my  Annual  Conference    Profitable?  

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WHAT  IS  PROFITABILITY  

 

 

 

 

 

 

   

Are  You  Running  a  Profitable  Event?  

Unaccounted  Costs  

Part  Fme  CEO  –  50%  on  Conference  

Admin  Assistant    –  85%  on  Conference  

 

Results  are;  

Unprofitable  Congress  

Huge  amount  of  effort  

Distracted  CEO  

£0  Profit  or  -­‐  0%  growth  

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EVENT  COSTING  

One  should  recognise  the  cost  of  all  

resources  associated  with  managing  the  

event!  

 

Many  organisaFons  do  not  consider  the  

efforts/Fme  of  their  staff.  

 

 

 

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STAFF    COSTING    

Are  You  Running  a  Profitable  Event?  

Project  manager  -­‐      £36,000   Project  assistant  -­‐      £24,000   Total  Salary  Cost  -­‐              £70,000  

Staff  Overheads  in  London  x  2-­‐3  staff  costs  

Jan   Feb   Mar   Apr   May   June   July   Aug   Sept   Oct   Nov   Dec   TOTAL

PM   3,000   3,000   2,000   1,000   1,000   1,000   750   500   2,000   4,000   5,000   5,000   28,250 PA   1,500 1,500 2,000 2,000 2,000 3,000 1,000 1,000 2,000 2,000 3,000 3,000 24,000 Overheads   4,500 4,500 4,000 3,000 3,000 4,000 1,750 1,500 4,000 6,000 8,000 8,000 52,250  Total  costs   9,000 9,000 8,000 6,000 6,000 8,000 3,500 3,000 8,000 12,000 16,000 16,000 104,500 Margin-­‐  20%   1800 1800 1600 1200 1200 1600 700 600 1600 2400 3200 3200 20,900 Fee/  Revenue   Generated  To   Cover  Staff   costs   10,800 10,800 9,600 7,200 7,200 9,600 4,200 3,600 9,600 14,400 19,200 19,200 125,400

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Are  You  Running  a  Profitable  Event?  

Conference  Income   AssociaMon  Income    

RegistraFon  Fees   £100,000   Congress  Surplus   £0  

Sponsorship   £50,000   Membership  Fees   £100,000  

ExhibiFon   £50,000   Journal     £50,000   Other   £35,000   Grants   £50,000   TOTAL   £235,000   £200,000   Conference     AssociaFon  Expenses   Expenses   Venue   £75,000   Rent   £75,000  

Catering   £50,000   Staffing  +  Overheads   £30,000  

Web,  Print  and  PromoFon   £50,000   EducaFonal  AcFviFes   £50,000  

Other  inc  staff  +  overheads   £95,000   PR  and  Comms   £60,000  

TOTAL   £270,000   Total   £215,000  

Profit/Loss   £-­‐35,000   Profit/Loss     £-­‐15.000  

Profitability  Case  Study  –  Is  my  Annual  Conference    Profitable?  

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EVENT  FUNDING  

 

IN  SUMMARY    

If  we  have  an  in-­‐house  team  we  need  to  

ensure  that  the  events  that  they  are  

working  on  are  able  not  only  to  cover  the  

running  costs  of  the  event  (venue,  

catering  etc  )  but  also  the  cost  of  

manpower.  

In  an  agency,  the  fees  need  to  cover  

overheads  +  margin      

   

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CASH  FLOW   BEWARE  

•  Most  of  the  running  costs  of  an  event  are  staggered  and  

are  payable  predy  close  to  the  event.    

•  These  usually  respond  quite  closely  to  income  into  the  

event.  Generally  these  Fmings  are  in  the  last  6  months   leading  up  to  the  event  

•  Staff  costs  are  NOT,  Salaries  need  to  be  paid  monthly  

 

Therefore  If  the  salaries  of  the  individuals  are  dependent  on   the  profitability  or  income  from  the  events  

•  Profitability  must  be  measured  correctly  

•  You  will  need  to  find  a  way  to  fund  salaries  unFl  the  

income  comes  in    

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EVENT  FUNDING  

CASH  FLOW  

 

CAUTION    

Profitability  is  not  Cash  Flow  

People  oTen  mistakenly  believe  that  a  profitable  event  will  not  encounter   cash  flow  problems.  Although  closely  related,  profitability  and  cash  flow  are   different.    

Many  event  budgets  list  income  and  expenses  with  lidle  regard  for  cash   flow.    

 

RECOMMENDATION      

Include  a  cash  flow  statement  which  lists  forecasted  and  actual    cash  inflows   and  cash  outlows.    

An  income  statement  shows  profitability  while  a  cash  flow  statement   shows  liquidity.  

 

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TIME  MEASUREMENT  

IN  ORDER  TO  ACCOUNT  CORRECTLY  FOR  STAFF  

TIME,  STAFF  SHOULD  BE  LOGGING  TIME  DAILY  

 

1.  BY  EVENT  

2.  BY  DEPARTMENT/TASK  for  e.g.  

•  Project  management   •  Programme  management   •  RegistraMon   •  Sponsorship   •  ExhibiMon   •  Social  Events   •  Speaker  Liaison    

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TIME  MEASUREMENT  

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RECOMMENDATIONS  

 

1.

Understand  the  objecMves  of  the  event,  what  the  

success  factors  are  and  whether  profitability  is  one  

of  them    

2.

Define  what  profitability  means  

3.

Understand  the  costs  of  delivery  of  the  event  

including  all  manpower  resources  invested  in  

delivery  

4.

Log  Mme  as  accurately  as  possible  

5.

Report  against  agreed  objecMves/success  factors  

 

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For  more  informaFon,  contact  me  at:   07939  027  193  

mf@michaelforeman.co.uk   www.michaelforeman.com  

Thank  you  for  listening!  

QuesMons?  

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