For Prof. Xavier

[AB270: Advanced Meeting Planning]

Assignment: The Budget

Your event business has the opportunity to provide a quote for two major events. Having experienced some financial difficulties in your first year of business, you want to ensure that you choose the most feasible event for which to prepare a proposal and produce the winning quote.

The first event is a top celebrity event and it will be held at her beachfront mansion, with a budget of $150,000. The event will be held outdoors and the goal is to transform the garden area through the use of a spectacular theme. The party will be attended by 350 guests, and a lavish dinner is expected.

The second event is much larger in which an estimated 500–600 guests will be invited, with a budget of $120,000. The company is celebrating its fiftieth year of tractor and farming equipment operations. The event will be held in a large airport hangar out in the country. Food will be fairly basic while alcohol will be plentiful. Décor is not important but the entertainment will be the focal point of the event.

In a minimum of a 2-page APA formatted document, address both checklist items; Parts 1 and 2.

Discuss which of these two events you would choose in terms of its ease of financial management and its potential profitability. Provide the methodology you would use to determine the break-even point and what control system you might utilize to manage the finances.

Title your sections as – Part 1 and Part 2 CHECKLISTS: Part 1

• Show a budget for each event scenario • Calculate the breakeven point for each scenario, noting your methodology • Explain the method you used to determine the break-even point

PART 2

• Explain which scenario you would choose based on ease of management, potential profitability, and ultimate benefit for your business

• Discuss the control system you would use to manage the finances regarding the scenario you chose and explain your reasoning

Compose your minimum 2-page APA formatted Assignment in a Microsoft Word document and save it as Username-AB270 Assignment-Unit#.doc (Example: TAllen- AB270 Assignment-Unit 4.doc). Submit your file by selecting the Unit 4 Assignment Dropbox. TUTORIAL on Breakeven Analysis: Breakeven Analysis Made Simple: STEP 1: Determine the normal costs for the items of the event based on the number of attendees (per plate costs for food)—you can find prices online. Note: Since these costs vary based on the number of people they are called Variable costs

[AB270: Advanced Meeting Planning]

STEP 2: Calculate costs that you would have to cover whether or not the event goes on.

 This should include any personnel costs and administrative costs (gas, tolls, phones etc. Internet) that you would have to pay anyway (These are called Indirect costs)

STEP 3:

 And any speakers fees, entertainment, etc. that are not based on how many people show up (These are called Fixed costs)

STEP 4: Add all the above together and then add a profit margin of about 20–30% (depending on your experience and certifications) to get a total amount you need to have in your budget in order to maintain your business. If you have a very large high-profile corporate business your profit margin might be higher. You can research on the Internet to find videos regarding calculating an event’s breakeven point if you think you need additional help.

Example of a simplified scenario: If your budget was $1,000. If you knew the profit margin would be $200.00 Fixed Costs: Entertainment (a clown), a bag of ice, balloons, and a cake = $330 Variable costs: The food for 20 children X $20 = $400 Plates, napkins, cups and invitations ($30), party favors (@$2.00 per child=$40) for 20 children = $70.00 ––––––––––––––––––––––––––––––––––– Total costs = $1,000.00 You would ask for a deposit up front. On the day of the party (since this is a small event) the balance is due. Remember your deposit should include your deposits you have paid out, and any other costs already paid out or that will have to be paid regardless of whether the client cancels at the last minute. If you know that you will have to pay $100 to the clown in advance to book his time, a deposit on the cake of $6.00, and you will purchase all the party favors and supplies in advance, then make sure this sum is included in the deposit. So in this scenario you might ask for a deposit of $300. Then one week before the event you might request another $400 for the food. The balance would be due on the day of the party. To determine your breakeven point: If you were charging for entrance for this event the breakeven point would be $50.00 per person. So if this were a fundraising event you would charge $50 per person. (Of course then you would possibly incur different costs like paying for a venue).

[AB270: Advanced Meeting Planning]