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					Future Strategies for EFP – MCI Proposal
Session 3: Financial Management

Setting the right financial expectations and strong
financial management are key aspects of the PCO
business. What are the latest best practices on
budget management and how do we control the risks
of the event.

            Presentation : René Haller

                                 13 March 2010



                                                      2
                           Contents

• What is a Budget
• Importance of the Budget / Finance within the
        Congress organization
• Setting the expectations
• Management of the Budget
• Latest Practices
• Risk Control
W
hat is a Budget




                  4
                                                     What is a Budget

Wikipedia says:
• A budget (from old French bougette, purse) is generally a list of all
        planned expenses and revenues. It is a plan for saving and
        spending.
        In other terms, a budget is an organizational plan stated in
        monetary terms.

• In summary, the purpose of budgeting is to:
      • Provide a forecast of revenues and expenditures i.e. construct a
           model of how our business might perform financially speaking if
           certain strategies, events and plans are carried out.
      • Enable the actual financial operation of the business to be
           measured against the forecast.
                                   What is a Budget


There are different budget types


 Revenue Budget
 Expenses Budget
 Cash Flow Budget
                                Revenue Budget

 Participant Registration
 Exhibition Surfaces
 Symposia Satellites
 Other Income:
   • Sponsored sessions
   • Congress bags
   • Printed Matters
   • Pads and Pens
   • Insert in Congress Bags
   • Advertisement
   • Lanyards
   • Social Events
 Refund of VAT (if possible)
                    Expense Budget

 Venue Rental
 Printed Matters
 A/V and Staff
 Marketing
 Socials
 Faculty
 Transportation
                                                                                        Cash Flow Budget

                    Period ending        31.08.2009           30.09.2009         30.11.2009          31.12.2009          31.01.2010          29.02.20010

Expenditure
1. Expense items                                                                                      CHF 138'108.48                          CHF 103'581.36
2. Expense items                                                                                                           CHF 63'606.25      CHF 200'000.00
3. Expense items                           CHF 110'000.00                                                                   CHF 9'082.05      CHF 300'000.00
4. Expense items                                                                                                           CHF 70'696.16
Total Expenditure                         -CHF 110'000.00           CHF 0.00           CHF 0.00      -CHF 138'108.48     -CHF 143'384.46     -CHF 603'581.36
Cumulated Expenditure                   -CHF 110'000.00     -CHF 110'000.00    -CHF 110'000.00     -CHF 248'108.48     -CHF 391'492.94     -CHF 995'074.30

Income
1. Income items                                                                                       CHF 200'000.00                          CHF 500'000.00
2. Income items                                                                    CHF 40'000.00                           CHF 50'000.00      CHF 100'000.00
3. Income items
Total income                                    CHF 0.00            CHF 0.00       CHF 40'000.00      CHF 200'000.00       CHF 50'000.00      CHF 600'000.00
Cumlated income                               CHF 0.00            CHF 0.00      CHF 40'000.00      CHF 240'000.00      CHF 290'000.00      CHF 890'000.00

Financing
Seed funds                                 CHF 110'600.00

Net Cash Flow before Client financing       CHF 600.00            CHF 0.00      CHF 40'000.00       CHF 61'891.52       -CHF 93'384.46       -CHF 3'581.36

Financing from Client                         CHF 0.00            CHF 0.00           CHF 0.00            CHF 0.00            CHF 0.00             CHF 0.00

Net Cash Flow after Client financing        CHF 600.00          CHF 600.00      CHF 40'600.00      CHF 102'491.52        CHF 9'107.06        CHF 5'525.70




                       If the event is self-financed, there is more security for the client
I
mportance of the
  Budget / Finance
  within the
  Congress
  organization
                     10
                                                                    Importance of the Budget
                     Budget &                                                   Reporting/
                     Financial                     CLIENT                        updating
                      Control                                                       lists
                    Client Zone                      MCI Event                  Client Zone
                                                      Director



Registration            Project           Hotels              Exhibition /      Transport     Social Events
                      Management                             Sponsorship

   Creation of           Assistance /       Room            Exhibition Layout    Flights      Pre-convention
registration form           Staff         research/           and Design                         Meetings
                                         Negotiation
 Mailing of form       Action Plans &                                            Ground
                                                            Sales & Marketing                  Dine around
                         timelines      Reservation
Centralization of
 registrations
                                          Deposit              Proactive                        Excursions
                        Budgeting &      payments             sponsorship
                          Control
Special request
                                        Rooming lists                                         Themed Dinners
                                                             Onsite delivery
                       Abstracts and                          and control
   Badges,               Scientific      Allotment
conference kits                          handling                                               Gala Dinner
                        Programme

     Online
                       Consulting and
  Registration                            Meetings
                         return on
Dedicated phone
                        investment
   & fax lines
S
etting the
    Expectations



                   12
                           Setting the Expectations

 What does the client want?

 General
    Breakeven
    Maximum Result
 Specific
    Scientific Oriented
    Attendance Oriented
    Socially Oriented
    « Cheap » Oriented
    Sponsor Oriented
    Quality Oriented
M
anagement of the
   Budget



                   14
                                     Management of the Budget


 Cost control
    Client expectations will help you control the budget

 Guarantees
    How strong is the PCO involvment (risk share / profit
        share). The PCO can guarantee profit

 Fund raising
    Institutions, Government, Organisations

 Sponsors
    Congress / content related companies
                               Management of the Budget


 Taxation / VAT
    Recuperation of VAT

 Accounting
    Reconciliation of accounts between PCO budget and PCO
       accounting

 Finance report / Final statement
    By external auditor
                                                                                          Management of the Budget




  SUBJECT                                           ITEMS                                                 TOTAL BUDGET             INVOICE                 # INVOIFES - BUDGET
Budget Item 1
                Budget Item   1A                                                                      €             2'000.00   €           1'000.00   -€                 1'000.00
                Budget Item   1B                                                                      €             5'000.00   €           4'000.00   -€                 1'000.00
                Budget Item   1C                                                                      €             1'000.00   €           1'500.00    €                   500.00
                Budget Item   1D                                                                      €            10'000.00   €           9'500.00   -€                   500.00
                Budget Item   1E                                                                      €           100'000.00   €         120'000.00    €                20'000.00
                Budget Item   1F                                                                      €            20'000.00   €          10'000.00   -€                10'000.00
                Budget Item   1G                                                                      €            50'000.00   €          25'000.00   -€                25'000.00
                                                                                                      €           188'000.00   €         171'000.00   -€                17'000.00
                                   This item represents the following percentage of TOTAL EXPENSES:                  10.00%                   9.09%




                     Budget and real expenses need to be compared at all times
L
atest Practices




                  18
                                           Latest Best Practices

              Establish Benchmarks




  SUBJECT                          ITEMS            ITEM COST
Budget Item
               ØVenue Rental                                25.00%
               Ø Printed Matters                            10.00%
               Ø A/V and Staff                              20.00%
               Ø Marketing                                  15.00%
               Ø Socials                                    12.00%
               Ø Faculty                                    10.00%
               Ø Transportation                              8.00%
                                   TOTAL                   100.00%
                                                                                          Management of the Budget




  SUBJECT                                           ITEMS                                                 TOTAL BUDGET             INVOICE                 # INVOIFES - BUDGET
Budget Item 1
                Budget Item   1A                                                                      €             2'000.00   €           1'000.00   -€                 1'000.00
                Budget Item   1B                                                                      €             5'000.00   €           4'000.00   -€                 1'000.00
                Budget Item   1C                                                                      €             1'000.00   €           1'500.00    €                   500.00
                Budget Item   1D                                                                      €            10'000.00   €           9'500.00   -€                   500.00
                Budget Item   1E                                                                      €           100'000.00   €         120'000.00    €                20'000.00
                Budget Item   1F                                                                      €            20'000.00   €          10'000.00   -€                10'000.00
                Budget Item   1G                                                                      €            50'000.00   €          25'000.00   -€                25'000.00
                                                                                                      €           188'000.00   €         171'000.00   -€                17'000.00
                                   This item represents the following percentage of TOTAL EXPENSES:                  10.00%                   9.09%




                     Budget and real expenses need to be compared at all times
                                Latest Best Practices

Establish Benchmarks: Same can be done for Revenue Budget

 Participant Registration            %
 Exhibition Surfaces                 %
 Symposia Satellites                 %
 Other Income:
   • Sponsored sessions
   • Congress bags
   • Printed Matters
   • Pads and Pens
   • Insert in Congress Bags
                                   %
   • Advertisement
   • Lanyards
   • Social Events
 Refund of VAT (if possible)         %
R   isk Control




                  22
                                                 Risk Control

 Know the scope / impact of your event
    eg. is animal research involved

 Choice of Destination / Venue
    size of the venue, accessibility of the venue / city, political
       situation of the destitation

 Get information on local habits
    staff   rates,   communication             ways,      financial
       recommendations, city regulations

 Financial Regulations
    Tax applications, money transfers
                                               Risk Control
       But also

Terrorist threats
 Natural Disasters
 Pandemics
 Economic Crisis

 Set appropriate congress deadlines
    allows to give enough reaction time

 Setup of a Marketing Plan
    define strategy and means of distribution as well as target
       audience

 Establish worst case scenarios
    have different budget versions
               Be Partners


Client




         PCO
T
hank you




           26

				
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