Whether you're planning a birthday party or a new-product launch party, it's going to take money. And whether you have $200 or $20,000 to spend, wasting your cash or your organization's cash will not produce good results. Carefully budgeting the money you have to spend gives you a shot at getting good results.
If you're looking to hire anyone for the event -- caterers, musicians, decorators, event planners -- budgeting makes it easier to select and work with them. Tell the caterer you have a $500 food budget and you'll get different suggestions than if you say $15,000. When you request live music, a $1.5 million event can afford a major recording artist; if your budget is $6,000, you have to think a lot smaller.
With every event, there are lots of things to spend money on. For an awards banquet, for instance, your costs include food, a place to eat it and the trophies you give out. Budgeting helps you set priorities: do you want spectacular trophies for the winners, or would you rather give them something small and spend more on a great meal? Working with unlimited funds is simple; working with a finite amount of cash requires you think about how to spend it.
Once you've drawn up the budget, you can decide whether you can afford the cost or whether you need sponsors or donors to make things work. The budget and your circumstances tells you whether you need 500 $10 donors or 30 $1,000 donors to pull the event off. Having a budget also forces you to ask what happens if you don't get enough sponsors -- whether you have a backup funding plan or you have to slash the budget instead.
It's easy to make spectacular plans when you sit and daydream about the event. When you make up the budget, however, everything becomes concrete: you have to identify everything you're going to need and how much it will cost. At this point, you may discover details you need to spend money on that you hadn't even considered. Budgeting also forces you to look at your assumptions: You may realize that you can't actually afford a $50,000 thirtieth birthday celebration.
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