When planning your race, there’s one step that is essential to making that event happen: creating the race budget. Luckily, it’s a repeated action so you can easily create a basic framework for your budget.
When planning your race, there’s one step that is essential to making that event happen: creating the race budget. Luckily, it’s a repeated action so you can easily create a basic framework for your budget, edit it along the way, and use tools that you probably already have to make it come together. It might seem daunting and finite to create an event budget, but as long as you make one that is realistic and builds in padding in case of emergency, you’ll be all set.
When planning a race, it’s important to account for all the different scenarios you could face, so that you can budget for them accordingly and risk manage where necessary. Whether you’re planning a new race, or one established in its 10th year, participation rates will affect the economies of scale of your event. The impact of this needs to be managed carefully, so it's important to have a race budget that can reflect different outcomes.
When making estimates of expenditure in different areas, there is always an element of uncertainty. Going for the most realistic estimates, is the best option to take. Although it might ‘feel’ safe to go for a conservative plan (where you exaggerate all costs and discount all revenues), having false negatives doesn’t contribute to an accurate business model. The idea of having a ‘nice surprise down the line’ after conservative planning might feel good, but it doesn’t reflect the reality of what will happen if your figures aren’t accurate and it can be bad planning.
If you cannot be confident enough to provide realistic estimates for your numbers, only then you should consider erring on the side of caution and being conservative.
The higher the impact of a parameter in your plan and the higher the uncertainty around it (e.g. participation), the more inclined you should be to provide reasonably conservative estimates for it. That is simply because false positives (a race appearing to make economic sense when it doesn’t) are potentially more dangerous than false negatives.
To create an event budget you will first have to figure out what parts of your event could potentially incur a cost. By including every part of the race, you’re able to get a more accurate budget versus one that simply includes the main expenses. This is a preliminary step that you can continue to refine along the way as you speak with vendors and get a more accurate telling of your budget.
Budgeting doesn’t have to be fancy– you can start as quickly as opening up an empty Google Sheet and entering budget items, to save time you can skip creating your event budget from scratch and download our event budget spreadsheet at the bottom.
Here are some budgeting principles we recommend:
It’s important to spend some time thinking through your race participation forecasts. Estimating numbers of participants, even for long-running events, can be particularly tricky and can really lead to disaster if not approached with great seriousness.
The best way to practically manage the uncertainty around participation in your event is to conduct a scenario analysis for your budget. This simply means playing around with the number of participants in your plan and seeing what happens.
Two particular exercises can greatly inform your understanding of your race’s economics:
If you’ve hosted this event previously, you can look back at the amount that was spent on previous events. Look at the line items that were utilized, and the number of guests that attended. If you expect that the event will expand in the current year, it is important to keep everything proportional in your budget by using multipliers. Historical data will help put a benchmark budget in place, and help you be realistic about actual vs estimated costs. When you create your budgeting spreadsheet, we suggest having 2 columns for the items that you put down. Estimated vs Actual costs to ensure you have a margin for error if one of these isn’t accurate.
Don’t forget… staffing all your stops with ‘volunteers’ still costs money. They cost money to recruit (advertising and manpower), to train (venue hire and travel expenses), to deploy and, very importantly, to keep happy (swag and a drink/food voucher always help). Make sure you add these to a ‘staff’ section (or equivalent) of your race budget!
If you are early enough in your plans and do not know whether support from volunteers will materialise, play it safe. Start off by using in your budget the cost of hiring someone to do the job you expect your volunteers to cover. Then when you get the volunteers you need, decrease or adjust these costs accordingly.
For more on this see our guide on Finding Volunteers for your Race.
When adding product sponsorship into your race budget, you should try to avoid simply deleting cost items that are provided by a sponsor. An alternative way to track this, could be to keep the cost of the item in your spreadsheet, and add the value of the items worth into your projected revenue. This way, when the sponsorship materialises, you can add it to your revenue figure to offset the cost of it in your expenses.
This is just one way of doing this but its important to keep track of the things you are receiving in sponsorship rather than deleting them incase the sponsorship doesn’t materialise. That way you have full budget transparency and you know your potential liability across any budget item in the event that a particular sponsor falls through.
Depending on how many races you organize, how many staff members you have and how many temporary volunteers you have to hire for your races, different levels of detail in your budgeting plan will be necessary. Its also worth pointing out to remember your old friend tax. Make sure you account for anything you need to pay in taxes or VAT as part of your business model to avoid broken plans and uninvited costs. Make sure you always understand whether quotes are given to you on a gross or net (of tax) basis. Recurring payments from subscriptions, bank account services, bandwidth usage etc are all part of your business so don’t let them go forgotten.
There are several different types of budgeting software available which can help you manage these different sections, but a spreadsheet can be enough if you are good on google sheets or excel.
The team at eventrac are on hand to assist with all components of your event. From advice on promoting your event through low cost channels such as social media, to a guided tutorial on a specific feature of eventrac. We are here to help.