Preliminary budgets reflect this information gathering, whereby the event organizers continually make modifications to their estimates and the budget over time as they receive information from multiple sources. Event organizers spend time gathering information about projected revenues and expenses as they plan for the event. The budgeting process involves five steps, and event organizers should create two budgets during the budgeting process: (1) a preliminary budget and (2) a working budget.Īs the name suggests, preliminary budgets are constructed during the earliest phases of the event planning process. Consideration of industry trends and capital needs may also have an effect on forecasting revenues, expenses, and the resulting net income. These steps require event organizers to spend time thinking about their sales or revenue opportunities along with the associated costs of generating revenue. Steps two and three ask event organizers to forecast sales, expenses, and related profits and losses. Gathering information helps determine potential revenues and expenses. The revenue, expense, and net income (net loss) numbers are forecasted or identified by completing the five steps in the budget process outlined in the previous section. Careful tracking of revenue streams and associated expenses will help event organizers as they attempt to achieve financial successes. Obviously, event organizers will certainly hope that every event creates net income rather than net losses. Net income occurs when revenues exceed expenses, while net loss occurs when revenues do not cover the incurred expenses. The third element of the budget is net income (or net loss), which is the difference between revenues and expenses. Organizers will hire or contract employees to manage those parking transactions - collecting parking fees, directing traffic, and helpings fans get to the event quickly and safely. For example, the event may create sales through parking. Organizers will incur expenses as they attempt to generate revenues. Expenses, on the other hand, represent money flowing out of the event or organization and are the costs associated with generating revenues. Organizers may also generate revenues by selling advertising and sponsorship space to corporations and other organizations. For an event, revenues may come from the organizers selling tickets, merchandise, or concessions to spectators.

Revenues represent money coming into the event or organization through an exchange of money for goods or services. The budget consists of three primary elements: revenues, expenses, and net income or loss. Christopher Greenwell,Leigh Ann Danzey-Bussell & David Shonk.

This is an excerpt from Managing Sport Events by T.

Profit maximizing level