Starting an event management business takes vision, gumption, and tenacity. But it doesn’t have to take a lot of money — not with smart planning, anyway.
If you’re gearing up to host your first event (hopefully one of many), this is the time to put a financial plan in place. Understanding your budget means knowing which expenses are unavoidable and which you can bypass. It also means knowing how much potential revenue your event could bring in if you execute it well.
With a little bit of math and partnership, you can keep your event in the black from the beginning. Here are the ground rules for starting an event management business without a lot of capital.
Come to terms with unavoidable event expenses
First step: reality check. You cannot launch an event management business without some money. For example, you need cash to secure a venue, book speakers or performers, and secure a catering commitment.
The good news is that you can approach sponsors and partners to help you fund the basics. To do this, you’ll need to know what those basics are for your particular event. This is where a budget comes in handy.
Write down every expense you can think of, then put them in order of priority. This will help you streamline and strike out any “nice to haves”, which you can add in once you start making real money.
Keep in mind there are a lot of small-business expenditures that novice event managers aren’t aware of, like taxes, insurance, and licensure. As you conduct due diligence, look into local and industry regulations so you know exactly what you’re expected to pay for.
In the initial planning stages your budget might be half-baked, but even projections or estimations are better than nothing.
Write down realistic revenue projections
“Defining the value of your event means putting it into dollars and cents,” says Eventbrite Senior Technical Customer Success Manager Shirene Niksadat. Your revenue projections are your proof that your event will make money. Explain what you’ll charge for tickets and how many tickets you expect to sell. If you have more than one ticket type explain your pricing strategy.
Your event ticketing platform should give you easy access to your ticketing financials. You can break down how much ticket revenue you’re getting from each specific event and ticket type.
Your budget should also include any other income streams (like exhibition space sales, food, and merchandising) to prove to potential investors that your event is primed to profit.
Make a pitch for initial funding
Armed with solid budget data, approach investors: potential sponsors, business partners, your wealthy aunt. Use facts and figures to convince them that your initial event has the potential to evolve into a full-fledged event management business.
Crowdfunding is another way to pay for your event. Plenty of successful businesses got their start with a crowdfunding campaign, and yours might be the next. You won’t share your intimate financials with the public on a crowdfunding site. But crunching these numbers in advance will help you figure out how much money you need to raise. Crowdfunding is a low-risk way to raise cash and build event buzz at the same time.
Invest the revenue you have wisely
Getting paid feels great. Using that income wisely is even better. As you begin to profit from ticket sales, reinvest that revenue in growing your event management business to stretch every dollar further.
Use your ticket revenue to:
- Pay vendor bills in a timely way: The vendors you hire are a major part of the experience your attendees have. It’s important to keep your accounts with catering, security, photographers, and florists in good standing.
- Put money into your marketing: Let more people know about your event, and you sell more tickets. Sell more tickets, and you have more money to put into your marketing. It’s a virtuous cycle.
- Lock in the next event: Competition for venues can be intense. Use your earnings to put a down payment on your dream venue for next year so you can cross that “to-do” off your list early.
Unlock the true potential of your event management business
In the early days, your return on investment (ROI) may not be all that impressive. But as your business grows, you must be able to prove that it’s making money. This is where a comprehensive business plan becomes essential.
To learn more about how to create an event business plan from scratch, download The Event Business Plan to Launch, Grow, and Propel Your Event.