Event Budgets and Contracts

• Budgets and contracts are essential for any event, aligning with financial goals and solidifying agreements.

Budgets

• Budgets are action plans for successful events, requiring constant adherence.
• Budgets fall into three categories based on financial philosophy.
• Profit-oriented events generate more revenue than expenses.
• Break-even events have equal revenue and expenses.
• Loss leaders or hosted events intentionally lose money to promote a cause.
• Budgets comprise revenue, expenses, and profit.
• Revenue refers to the earnings from an event.
• Expenses are payments for goods and services.
• Profit represents a surplus.
• Revenue is calculated as Revenue = Expenses + Profit
• Fixed costs are consistent daily business expenses.
• Variable costs fluctuate based on factors like attendee numbers.
• Total cost is calculated as FC + VC = TC, where FC is fixed cost and VC is variable cost.

Important Budget Items

• Venue expenses cover costs at the event site, including rentals and accommodations.
• Program expenses cover program delivery, including sound, lighting, and speaker fees.
• Marketing expenses cover advertising, public relations, and promotional materials.
• Meal expenses cover food and beverage for guests and organizers.
• Staff/Production Crew expenses cover salaries and fees for setup, registration, and ushering.
• Transportation expenses cover transport services.
• License and Permit expenses cover event organization from government agencies.
• Accommodation expenses cover lodging for speakers and related guests.
• Production and Staging Facilities expenses cover lighting, sound, LED walls, and cameras.
• Fees cover performers or speakers.
• Security expenses cover hiring security personnel.
• Contingencies protect against risks and are typically 10-20% of the total cost.

Revenue Generating Activities

• Various activities generate revenue for events.
• Registration fees: Charges for attendees to register for the event.
• Entrance fees: Fees charged for admission to the event.
• Exhibit sales: Revenue from exhibitors showcasing products or services.
• Vendor fees: Fees paid by vendors to participate in the event.
• Sponsorships: Revenue from sponsors supporting the event.
• Advertising: Revenue from advertising opportunities at the event.
• Area branding: Revenue from branding opportunities within the event space.
• Merchandise sales: Revenue from selling event-related merchandise.
• Ex-deals: Revenue from exclusive deals or packages offered to attendees.

Sample Event Computation

• Sample event attendee costs:
• Meals: P 3,000
• Handouts: P 150
• Souvenir: P 500
• Production cost: P 100
• Fixed Cost: P 2,000
• Subtotal: P 5,750
• Mark-up (30%): P 1,725
• Suggested Price: P 7,475
• Add 12% VAT: P 8,372
• P 8, 372 is the registration fee for this event.
• Value-Added Tax (VAT) is a sales tax on consumption in the Philippines.

Contracts

• Contracts are agreements between competent parties, defining rights and duties with legal backing.
• Contracts legally bind event companies with clients and suppliers.

Reasons for Contracts

• Contracts protect legal interests.
• Contracts ensure safety and security of stakeholders.
• Contracts protect financial investments.
• Contracts ensure ethical practices.

Types of Contracts

• Administration contracts: cover Management, Sponsorship, Exhibitor, Insurance, Association/Organization partnership, Speakers agreement, and Registration form.
• Operations contracts: cover Freight forwarders, Security Agencies, Transport, Entertainers and Performers, Media Partners, and Advertising or PR agencies.

Key Components of Event Management Agreements

• Parties: Clearly identified names of involved parties.
• Offer: Defined service or product tendered by one party to another.
• Consideration: What one party provides upon acceptance of offer, either cash or in-kind.
• Acceptance: Agreement execution by both parties.

Contract Terms

• Terms: Confirmation of understanding and agreement to comply with terms and conditions.
• Cancellation: Formal declaration to terminate contract.
• Force Majeure (Act of God): Unforeseen events beyond control.
• Arbitration: Legal judgment process.
• Billing: Preparing expense statements and invoices.
• Time is of the Essence: Clause making agreement valid only if signed within a specific period.
• Assignment: Transferring contract obligations to another party.
• Insurance: Protects investment against cancellation or liability.
• Hold Harmless and Indemnification: Negligent party agrees to protect the other party.
• Reputation: Opinion or belief about an entity.
• Complete Agreement: Clause signifying agreement on all terms.
• Rider: Attachment listing ingredients supporting the main contract.
• Eco Rider: Requires activities that reduce the carbon footprint.
• Changes to the Agreement: Written notification of changes.
• Terms and Sequence of Execution: Manner of contract implementation.

Permits

• Permits are issued by government agencies to conduct certain activities.
• Permits require documentation and fees.

Licensing

• Licensing is granted by governmental institutions to conduct specific activities.

Intellectual Property

• Intellectual property is protected under trademark, design, copyright, and consumer protection laws.
• Copyright law offers exclusive rights to creators, including reproduction, distribution, and public performance.
• Brands and trademarks: Registration prevents others from using similar marks.