October 29, 2015
Plenty of people will tell you that finding a ‘sustainable source of finance’ is the key to organising a successful event, but what does that actually mean? For example, you might think that it’s all about future cash flow and on one hand, it is: it’s not good to find that your money has dried up after one blow-out night. On the other hand, there are perils in focusing only on the bottom line, as can be seen from the recent news involving SFX. So what’s an event planner to do?
No matter the size of your event, you’re going to need a coherent, well thought-out business plan. It’s important that you can show sponsors where their money is going – investors are a cautious bunch, and they have every right to ask you about predicted Return on Investment (ROI). Your first pitch should strike a balance between being concise and showing that you know your stuff: who are your competitors? How are you going to replicate or better their efforts?
Be sure to start early so your plan is realistic and achievable. You should pitch to experienced people who are genuinely interested your product – these individuals are likely to know if you’re promising too much. While you’re trying to convince sponsors to part with their cash, there’s also a consultative element to this process: if real experts don’t want to fund you, ask for feedback and find out if there’s a flaw in your business model.
Having honest, transparent relationships with your backers is a linchpin of sustainable event financing. Like all successful long-term partnerships, this one is built on trust and respect.
Don’t obsess over breaking even
This may come as a surprise, but not all planners expect to break even from the word go. We’re not saying that you should spend in excess of your expected ticket sales, but even music festivals sometimes lose money in the first few years of their existence. It can take time to secure a sufficiently large surplus to cover the initial costs of large events – the important thing is to predict and limit losses.
Hire a bookkeeper to make financial forecasting easier or, at the very least, record every penny you earn or spend in a spreadsheet. Don’t keep the contents of this tracker to yourself; speak to other planners to see if they can alert you to costs you haven’t thought of.
Smart ticketing can also help to secure financing, as backers are more likely to stick around if your first outings show promise – phasing your tickets is a great way to generate interest and boost sales. Getting support with your ticketing will allow you to focus on making everything else go smoothly, and should help to reassure sponsors that their investment is safe. Securing help doesn’t have to break the bank either – at ticketscript we offer services for events large and small.
Have a plan B…and a plan C
While there’s no doubt that sustainable event financing is all about preparation, it’s impossible to take every eventuality into account. There’s an element of risk in all entrepreneurial activity, but you can manage the unexpected by making careful contingency plans in conjunction with your sponsors. In an ideal world, you’ll set aside 5-10% of your total costs as a ‘plan B’ fund. Experienced investors are used to things going wrong, and they’re likely to be most interested in how you respond to adversity.
Finally, set an absolute limit on your spending. Although you can’t always expect to break even, it’ll become difficult to organise successful events if you’ve got spiralling debts on your mind. There’s a huge difference between running a temporary deficit and losing control, so make sure you have an uncrossable line and a solid exit plan in mind – you probably won’t need it but sustainability can sometimes mean fighting another day.
If you’re planning an event and would like support with your ticketing, contact us and we’ll help you hit the ground running.