MODULE 2

EVENT PLANNING AND ORGANISATION

TOOLS FOR EVENT PLANNING AND MANAGEMENT

Organisation charts, Maps and models, Gantt charts, Run sheets and Checklists are useful
basic planning and management tools related to an event, that are discussed as follows:

A. Organization Charts

An organisation chart is a very important tool used in planning. Once all tasks have been
identified and grouped logically, the staffing requirements for an event become much clearer
and can be presented in an organisation chart. An organisation chart can also include a brief
list of tasks performed by individuals or the people performing each role. This list clarifies
individual roles and improves communication.

Organisation planning for events can be complex, since generally several organisation charts
are required each for different stages or tasks.

Pre-event Charts: These charts are used during planning as the lead time to the event can
be quite long. The charts required during this period show the following:

• All those responsible for the primary functions during the planning stage, such as finance,
marketing, entertainment, catering, and human resource management.

• Small cross-functional teams that manage specific issues such as safety and customer
service.

• The stakeholders committee (including external contractors, suppliers, and public bodies)

Charts during the Event:

During the event staffing levels expand to the requirements of a full-scale operation and the
size of the organisation generally increases. In some cases, there may be more than one
venue involved, so that the role of every key personnel in the functional areas, for example,
a catering manager for each event venue, needs to be indicated on the chart. Hence the
chart at this stage includes the following:

• Full staff on the chart depicting relationships for the overall event operations.

• Emergency reporting relationships (simplified and streamlined for immediate response).

Post-event Charts: After the event, the team usually gets dispersed, leaving only a few
individuals. The post-event chart shows key personnel such as those involved in evaluation,
financial reporting etc.

B. Maps and Models

Maps are useful tools in event planning. Maps are particularly useful for contractors who
may be required to set up the event site. More than one map or plan may be required.
Various computer software programmes can be used to generate images, giving the different
parties / stakeholders involved in the event a better understanding of the facilities. The
people to whom the maps and model of an event can be given could be builders, designers,
exhibitors, artists, entertainers, audience, telecommunications and electrical contractors,
spectator service hosts, and emergency response teams.

Models are also extremely useful tools, as they help clients visualize three dimensional
concepts. A model can be helpful in important aspects, like for instance crowd control where
bottlenecks and other potential problems are likely to emerge from viewing a three-
dimensional illustration. Nowadays, software can be used to present such information,
allowing the event management team to anticipate all design and implementation issues.

Computer generated images help the event management team to visualize the resulting
event, though the team may be miles away from the actual site.

C. Gantt Chart
Gantt charts are important tools that are generally used in the early planning days and in the
days leading up to the event. Gantt chart is a type of planning sheet in which dates are listed
across the top of the chart, and rules (or blocks) are used to illustrate how long each task will
take. In this type of chart the interdependence of tasks are clearly seen. For example, once
we have plotted the process of recruiting, inducting, training, and rostering staff for an
event, one may realize that the process of recruiting needs to start earlier than expected to
enable the staff to be completely ready for the big day. The Gantt chart helps us to identify
another aspect of planning - the critical path, which means those elements of the plan that
are essential for the successful outcome of the event and therefore are of high priority.
Critical path is shown in another kind of Gantt chart which is represented as a network.

D. Run Sheets
A run sheet is the programme or schedule of events. In the preliminary stages of planning,
the run sheet is quite simple, with times allocated only to specific elements of the event. But
as planning progresses, the run sheet becomes more detailed with, for example, timings for
performers, entertainers, technicians and other staff. Finally, an even more detailed run
sheet can be developed (at this stage called the script) to identify each person’s role and
cues. Run sheets are an important tool for the stakeholders and participants, from the venue
management team through to the subcontractors.
 E. Checklists
A checklist is a control tool that ensures that the individual performing the tasks has not
forgotten a single detail. Further, this checklist is provided to guide in essential actions to
ensure that the event is on track in meeting cost, schedule, and performance requirements.
For example Table 3 provides the checklist for the Security Equipment. Similarly checklists
can be made for catering, budgeting and so on.

BUDGETING AND FINANCIAL PLANNING

EVENT BUDGET
The event budget is a projection (forecast) of the income and expenditure that the event will
incur based on plans made and information gathered. The preparation of a budget is an
essential part of event management. It is fundamentally important that Event Directors are
able to predict with reasonable accuracy whether the event will result in a profit, a loss or
will break-even. This is achieved by identifying and costing all probable expenditures and by
totalling all expected revenues (income). By comparing expenditures and revenues, it then
becomes possible to forecast the financial outcome of the event.

The construction of an event budget allows the Event Director to exercise financial control.
Many organisations have run into severe financial difficulty and even bankruptcy as a result
of staging events. The budget therefore enables the Event Director to make sound financial
decisions about the choice of venue, and expenditure on promotion and equipment. The
process of budgeting also enables the Event Director to calculate how much revenue is
needed to stage the event in accordance with provided details
Although the budget takes time to develop, there are some rules that should be observed
throughout:

 Budget to avoid making a loss

 Be realistic about event incomes
 Have a financial contingency plan i.e. what happens if the sponsorship is not
forthcoming?

Once constructed, the budget assists the Event Team to determine whether a proposed
course of action fits within planned financial strategies, or not. If the answer is in the
affirmative, i.e. the item is said to be “within budget”. If the answer is in the negative, then
there is an understanding that continuing to pursue that strategy has a higher degree of risk,
and the event profit will be reduced. This does not mean, however, that any departure from
the set budget is inadvisable. It may be that the “unbudgeted” cost item has obvious
financial benefits

Make sure you understand the financial situation before you start organising your event in
any detail. Here are some relevant questions that may assist you:

 What is the available budget?

 Do you need to charge guests admission?
 Do you need to hire venues and employ staff?
 Is catering required?
 Is advertising and promotion necessary
 Does the event have sponsors?
 Will Fringe Benefit Tax apply

SIGNIFICANCE OF FINANCIAL PLANNING IN EVENT MANAGEMENT

Financial planning for an event is seen in the light of financial goals. It involves the process of
estimating capital requirement in terms of current and fixed assets, promotional and
marketing activities, venue, catering, logistics, staging and so on. Budgeting is a component
of the financial planning process.

Financial planning also involves setting up of capital structure i.e. the composition of capital.
This includes decisions related to how and from where the funds will be raised to meet
event expenditure. For instance, events such as music festivals street parades or social
awareness camps do not have an objective of making profits. These events are referred to as
cost-oriented events. In such events, financial planning will include the involvement of
government agencies and sponsors to meet the event expenditures. Also, different
entrepreneurs and individuals get associated with such events by offering goods and
services required at the event.
For events which have an objective of profit making, also called profit-oriented events,
financial planners deal with decisions related to ticket fee, admission or entrance fee,
merchandising sales, attaining break-even point and other aspects of revenue generation.
Lastly, in financial planning, financial policies pertaining to cash control, obtaining
sponsorships, revenue generation aspects, legal and taxation obligations are framed.

Financial planning enables the event organizers or event financial planner to obtain answers
to questions such as - Is the aim of event to make profit? How much will the event cost?
What are the revenue sources? How many tickets must be sold to achieve break-even? How
will the cash flow be managed? How will legal and taxation obligation be met?

COMMON FINANCIAL CHALLENGES

Professional events, just like an enterprise, involve huge investment. Investment is in terms
of manpower, money, reputation, future trading and so on. Hence like business, the event
project has to deal with various types of challenges and in finally achieving the event
objective. This section will focus on some common financial challenges encountered during
event management and their probable solutions. These examples will help the event
manager to anticipate such challenges and thereby take measures to avoid them entirely.

Challenge 1: Negotiating Employees’ Salaries and Benefits

Solution: To address this it is essential that the event manager collect information from firms
in similar market area and use the information in determining the market basket figure.
Some negotiations up or down are acceptable based on the capability of the potential
employee

Challenge 2: Appropriate Compensation for Event Sales-people

Solution: Usually the sales people are compensated in three ways. The most prevalent
method is to draw against compensation. In this method, the salesperson is provided with a
small stipend until her or his commissions have equaled this amount. After she or he has
equaled the amount of the draw, the stipend stops and the salesperson receives only sales
commission. The second approach is based on straight commission. In this, the salesperson
has existing accounts and earns commissions immediately. Usually the commissions range
from 3 to 7 per cent of the gross sale. The last approach is to offer the salesperson a salary
plus bonus based on sales productivity. This bonus is typically awarded after the salesperson
reaches a particular threshold in sales which is set as minimum required target for a certain
duration of time. A typical bonus is 1 or 2 per cent of sales. It is advisable to stick to the
selected method of compensation for at least a year so that it can provide data for reviewing
and deciding the future course of action.

Challenge 3: Slow Payment by the Client

Solution: It is sensible to have an open talk with the client of the Event Management
Company (EMC) and set expectation in this regard. Finding out how the payments from
them can be expedited will also be beneficial. Working out ways like picking up the payment
cheque from the client, accepting online payments, and determining payment break ups
including when to pay and how much helps to deal with these issues. Identifying the
payment process done by the client earlier, from other vendors, also gives a better
understanding about the client and an idea of dealing with the client. If things do not turn
out in the desired manner then one may also think of taking some extreme steps like
suspending services till the balance is paid or payment on account is made.

Challenge 4: Short of Cash

Solution: Practically, this situation should not arise when events are managed professionally.
Financial managers should be prudently managing the accounts payable and receivable.
However, if due to some odd situation, the event is faced with this issue, the event managers
must contact the vendors immediately and notify them about their intent to pay. Other
measures which event managers can take in order to come out of this situation is to reduce
or stop spending with regard to fixed overhead. Next action could be to contact lenders to
access a line of credit based on receivables until the event has sufficient cash to meet the
event manager’s expenses

Challenge 5: Vendors introducing Themselves to Clients Directly

Solution: Vendors introduce themselves to clients directly. Hence there should be some
written policies or agreement outlining what is and what is not permissible by the vendors. It
is advisable to have written agreements between the two parties rather than relying on
verbal commitments.

Challenge 6: Employee is Terminated, Starts own Business and Takes your Clients

Solution: This is a risk which the event companies have to live with. Practically, employees
have a choice to take decisions for their better career and the clients also have no
constraints on whom they do business with. The best way to avoid this situation is to work
on retention policies and motivation of staff so that the employee is retained. This is
important because in the concept of business ethics, bad business ethics of ex-employee will
eventually alienate the EMC from industry colleagues and vendors who are suspicious of
their behaviour

SOURCES OF EVENT REVENUE/ FUND

Government Grants: Government grants to assist with the running of events are not easy to
obtain. To be successful, applicant organisations need to demonstrate that the event has
strategic regional importance.

For example it may increase overseas tourists to the region. Cultural Function and
Production Grant Scheme” was launched by the Ministry of Culture, Government of India.
The scheme covers all ‘not-for-profit’ organizations, NGOs, Societies, Trusts, and Universities
for supporting Seminars, Conference, Research, Workshops, Festivals, Exhibitions, Symposia,
Drama-Theatre, Music, etc., and small research projects on different aspects of Indian
Culture.

Sponsorship: Despite the prevalence of event sponsorship in the sport and recreation
marketplace is increasing, many organisations have great difficulty in achieving a significant
amount of sponsorship. Competition between sport and recreation organisations for
sponsorship is intense. Organisations need to be very professional in their approach to
sponsorship and to be able to offer sponsoring companies outstanding value in promotional
services. Event Directors need to exercise some realism and caution in relying to heavily on
sponsorship.

Merchandising Sales:

The term merchandising applies to the sale of a range of products that may be strongly
identified with the event or the organisation hosting the event. A common example of
merchandising is the production and sale of T-shirts, polo shirts, caps and other forms of
clothing that are screen printed or embroidered with a design or trademark of the event.
Participants tend to purchase such articles for their commemorative value. Other typical
forms of merchandise include glassware, pens, dish cloths, drink bottles and badges.
Merchandising may be a form of income suitable for events that have larger numbers of
either players or participants.

Participant Fees:

The charging of fees to participate in the event is perhaps the most common form of event
revenue. Sport and recreation events are a service provided and it is reasonable to suggest
therefore that all basic costs of the event should be covered by participant fees. These
"basics" include the hire of the venue, provision of appropriate equipment and the
administration of the event. Sponsorship and government funding, if it can be achieved,
allows the organisation of the event to go beyond the basics. The event budget should be set
so that if sponsorship and/or government funding is not forthcoming the event does not
have to be cancelled.

Raffles
It is common to find that recreation organisations employ "on-the-day" fundraising
strategies. The most common example is the raffle and a small amount of income can be
achieved this way. Whereas it is difficult to achieve cash sponsorships, it is easier to obtain
goods from sponsors which can be raffled. Event Directors should identify and research
legislation in their own state/nation that pertains to raffles and other similar forms of
fundraising. Raffles are often regulated by governments because of the potential for fraud
and misrepresentation.

Spectator Fees

In some cases, events are sufficiently popular and entertaining to attract paying spectators.
However it can be difficult to obtain money from spectators in circumstances where there
no restriction of access(for example an outdoor event with no perimeter fence). If this is the
case it may be better to make off-street parking for a fee.

TYPICAL EVENT COSTS

Travel and Accommodation Costs associated with officials needed to run the event may
have to be borne by the event organisers. Event participants
are generally responsible for their own travel and
accommodation costs. In minor or local events travel and
accommodation costs are unlikely.
Trophies, Awards The cost of medals, trophies and other awards requires
detailed knowledge about the number of competitors, the
categories of divisions of the competition and the format of
the competition.
Salaries Applies only events are organised by professional staff
Postage and telephone Events usually require considerable communications with
participants and the event management team.
Stationery and Special event stationery may be printed but otherwise there is
Photocopying always a lot of photocopying and usage of organisation
letterheads to write correspondence.
Medical Fees Events require persons with at least First Aid training to be in
attendance. Larger events may also warrant the employment
of a doctor and physiotherapists.
Venue Hire A critically important aspect of the budget. Information about
the probable cost of the venue needs to be obtained as early
as possible. Beware that there some hidden costs such as
security and supervision costs, and heating and lighting costs.
Insurance Additional insurance can be taken out to cover risks of injury
and/or financial losses associated with events.
Printing Event programmes, posters, fliers and other promotional
documents may need to be printed - especially where quality
and colour is required
Promotion Expenditure on promotion may be considerable where a
significant proportion of the event revenue is likely to be
earned through spectators. Promotion covers items such as
advertising, give-aways, costs associated with promotional
events and sponsors' signage.
Equipment Hire Includes equipment directly used by participants in the event
and also any equipment used by the event management staff
including sound systems, computers, mobile phones, two way
radios, etc.
Transport Includes costs of transporting equipment and hire of buses.

BREAK EVEN ANALYSIS

Break-even analysis helps to find the point where the costs incurred in an event will be equal
to the revenues earned from the project. It is the point from where profit starts coming.
When a company starts a particular event, it will have a fair idea of costs to be involved.
There are onetime costs of material that will be used in the event; and there are also certain
costs that cannot be consumed in one event, such as costs of assets like generator etc

Break-even Point

A company’s break-even point is the amount of sales that it must generate in order to equal
its expenses. In other words, it is the point at which the company neither makes a profit nor
suffers a loss. Calculating the break-even point (through break-even analysis) can provide a
simple yet powerful quantitative tool for managers. In its simplest form, break-even analysis
provides insight into whether or not revenue from a product or service has the capacity to
cover the relevant costs of production of that product or service. All event managers must
be aware about the level of turnover at the event so as to cover all the costs and know at
what point profit will start being made.