For many small business owners, the fear of running their own event stems from the unknown level of investment required and profit that can be attained.In most cases, there will need to be some financial output before income is generated and there is no denying that there are financial risks associated with committing to run an event.However, as with all elements of your business, there are some simple, smart and effective ways of minimising those risks and maximising your profit.
Julia Phillips, the owner of Potting Shed Events and founder of Potting Shed Event Academy helps business owners learn how to run their own events, here she Julia gives 5 top tips to ensure that your event is as profitable as possible.
Firstly, you need to know your costs
This is something you will know from your overall business but specifically for events it is really important to establish what the event is going to cost you to run.At this stage you should ignore the income you hope to make and just get your costs into a simple budget.An effective way of doing this is to separate the costs into fixed costs (those that don’t change based on your guest numbers) and variable costs (those that increase the more people you have attending your event).Fixed costs might include the hire of the meeting room while variable costs might include catering which is generally offered as a per person price.
Once you know your costs you can move onto setting your ticket price
In working out your costs you will have needed to use a number of guests you hope to attract.If you divide all your costs by the number of people attending that is your breakeven ticket price that you need to charge for the event not to lose you money or make a profit.If you would like to make a profit, then simply add your profit projection to the costs and then divide by the guests.That will be your profit ticket price.
Of course, you might want to consider a special offer (perhaps an early bird or a bulk offer)
For all special offers you will need to make sure as a minimum, that you don’t offer tickets for lower than your breakeven price – that way these tickets will not cost the event money and those purchased not on the offer will provide your profit.
A further consideration could be sponsorship
Cash sponsorship is the ideal here but can be really tough to secure.Other forms of sponsorship can be a good way to add value to your event.In both cases make sure that you account for any associated costs (branding costs for example) so that you are not eating into your event profit.
The final (and possibly most obvious) element is to maximise your event attendance
You need to make sure that you have your target number of guests attending your event.This will require marketing to your existing audience as well as finding other ways to encourage people to attend.Word of mouth is often the strongest approach and finding other businesses/experts who you can invite to speak at your event (only if they are relevant of course) can be a good way of them promoting your event to their fresh, new audience.
