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CHAPTER I

PRELIMINARY
1.1 Background of the Problem
Funding for organizing an event is one of the most important things for the survival of
an event. It takes a lot of attention so that funding can be managed well so that an event can be
carried out while providing profit for the organizer.
No need for large funds for a large event. Proper management according to the
requirements needed in the analysis of a funding plan. Funding planning must be handled by
people who can really manage the money well, especially in terms of large enough funding.
This is noteworthy because the procurement of an event in business must aim to gain
profit rather than get a loss.
The better the planning process of an event funding, the greater the chance of getting
excess profits for the organizer. Therefore in this paper, we will discuss a little about how to
plan a good funding for beginners who will be engaged in the event organizer

1.2 Problem
Issues to be discussed in this paper are:
1. What are the stages of initial funding planning in managing an event?
2. How to suppress funding planning in managing an event so that the event can be held
according to plan but the profit generated is quite large?
3. What things must be considered to reduce the swelling funding?
1.3 Scope
The scope of this paper covers how the budgeting management system in an event, especially
the organization of conventions for novice organizers so that they can manage a convention
event that even has a minimal budget.
1.4 Purpose
This paper is intended not only as a final project for the achievement of values that must be
fulfilled, the purpose of this paper is also as a reference to readers, especially young
organizers who want to learn about funding management for the convention.
CHAPTER II
THEORITICAL BASIS

2.1 Process Budgeting


Funding planning aims to estimate the financial future of the event. Planning for
expenditure items and sources of income so that you can estimate profit or loss. To be able to
arrange an accurate funding plan for a convention event directed at desired financial results,
the event manager must advance through various stages.
In the case of any business including the convention event, funding planning always
starts from raising capital. Capital for a new and old company must also be separated between
fixed capital and current capital.
The convention event in general must have been held, it is different if the new
convention event will be held. Related to whether or not the event has been held earlier, the
provision of capital in advance will be very necessary to estimate funding at the time of
implementation.
Several factors together cause capital budgeting in funding planning is the most
important decision making in which financial management is involved. Furthermore, all
divisions in an event are vital affected by capital budgeting decisions, so that all executives
regardless of responsibility for the division, must be aware of how the capital budgeting
decision process is taken, so that when making per-division funding planning, the executive /
division head has can know the portion of each in the event.
For companies that are newly built or already built, the provision of funds in capital
planning must be carefully thought out. In the case of making a convention event, the
provision of funds must be made well in advance of the day of implementation. In other
words, when an idea or concept of a convention is issued, it cannot be implemented quickly.
This is because not all funds let alone very large amounts can be available, therefore there
must be certainty of the availability of funds.
The next stage when capital budgeting is completed is to do research. Research is
conducted with the aim of knowing the exact price of the items needed later. After the
research, the budget planning phase will be completed until the budget approval stage.
When the budget approval stage has been agreed upon, then there is one important
stage that must be carried out by the financial management department of a convention event
company, namely the review of funding. If it is certain that it can be continued according to
the initial decision, then there will be funding expenditures according to the needs that have
been recorded and agreed upon together in the proposal to submit a convention event.
CHAPTER III
DISCUSSION
3.1 Research
The first step of the budgeting process is identifying costs and sources of income and
placing financial value on them. If an event has been done before, most of this information is
most likely available in the previous year's budget. If an event is held for the first time,
organizers of similar events can be contacted to share their experiences. The area where each
particular event may incur costs, or generate income, obviously varies. However, it is
possible to identify many of the more common event costs and income sources. See the table
below:
Table of General Event Expenditures and Income Sources Items

SOURCE OF INCOME
EXPENSE ITEM

 Rental cost  In kind support (barter)


 Decor  Ticket sales
 Transportation  Grant
 Location/venue rental  The sponsor
 advertisement

Some of the costs identified in the table can be identified as 'fixed' in the sense that they
will not change due to your presence (for example venue rental). Most of the costs identified
by many types of events can be categorized in this way. This is so because a large amount of
event expenditure occurs before the event starts. Some costs can be categorized as 'variable'
depending on the event; these costs will vary directly related to attendance. For example the
number of people who come will immediately determine the amount of food needed at a gala
dinner.
When variable costs are added to fixed costs, the overall costs of holding a convention
event regardless of the number of attendees can be given. To determine the point at which your
event reaches a return on investment, you must also estimate your income. Revenue will be
obtained by the number of visitors to the event that is charged an entrance ticket. The point at
which revenue equals the overall cost of running the event is called the break-even point [BEP].
An event may experience several scenarios before setting ticket prices in order to maximize its
chances of making a profit. A computerized excel spreadsheet is an effective way to explore
these scenarios.
3.2 Determining The Budget Level
The event manager must determine the budget level necessary for an event. Will a
single overall budget be adequate or is an individual budget for each activity needed? If a
convention event has multiple components, such as exhibitions, awards and impresariat
dinners, then a double budget will be required from the amount allocated, for example, for
rental costs divided into chairs, tables and equipment.
Determination of the level of the budget must be based on the event financing plan
which is divided into three categories, namely:
 Expenditures Budget
 Revenue Budget
 Profit / Loss
As noted in the table above, that every funding is based on aspects of expenditure and
income which will lead to profit and loss.
 Funding Budget
The funding budget for an event including a convention event is divided into 3 groups. These
groups will determine how much initial capital is needed to make a single or multiple
convention event (supported by other events). This group consists of:
1. Fixed Cost
All planned expenses which are fixed expenses that cannot be transferred or budgeted to other
parts. Such as HR needs before / after the event, secretariat, venues, audio equipment,
committee meetings, speakers.
2. Variable Cost
Any expenses that are uncertain or can be said to be costs incurred for secondary needs.
Secondary needs that need to be held if needed such as press releases, congress kits, souvenirs,
certificates and others.
3. Unexpected Costs (Unexpected Costs)
All expenses that suddenly and must be issued are not even included in the expenditure budget
either for fixed expenses or for non-permanent expenses. Such as accident fees.
 Revenues
Estimated income can be obtained from various sources including:
a. Initial capital budget
b. Participant registration fees
c. Exhibition
d. Sponsor
e. Commission
f. Donors
Keep in mind that every budgeting event financing should never be too racing or expect
a source of income from the sponsors. It's a good idea for the sponsors not to charge too much
income, this is done to anticipate the existence of an excessive deficit situation.
 Net Profit / Loss
Once the funding budget planning is clearly seen, it will be seen clearly whether the
company will get profits or get losses. The company will not suffer losses if its funding
management system is managed properly and thoroughly.
3.3 Budget Determination And Approval
After the costs and revenues are estimated, and the appropriate budget level has been
determined, the next task is to place these costs in the budget document. Documents like these
can be paper based but the use of spreadsheets is more recommended. The reason is, as
indicated earlier, that different scenario scenarios and their impact can basically be assessed
quickly. The effects of, for example, changing ticket prices, or raising one or more cost items,
can be determined immediately, thus helping decision making. After the draft budget is made,
this plan must be approved by those who have overall responsibility for the event. The approval
process serves as an opportunity for the final critical appraisal of the budget and as a way to
create a sense of ownership.
Because many of the expenses for many types of events occur before income is earned
(eg rental of premises and equipment deposits) it is possible for an event to face cash flow
problems. Therefore, it is wise practice to estimate expenses during the preparation period
before the event. This can be done by using specified periods (eg one month) and estimating
costs for these periods. If potential cash flow problems are identified through this process, a
series of actions can be taken. For example, suppliers can be invited to negotiate to extend the
payment period or sponsors can withdraw funds early.
3.4 Budget Monitoring
Financial plans can fail if they are not monitored. Though there are various tools that
can be used to realize this goal. Individuals and committees responsible for certain tasks can
prepare income and expenditure statements. These statements must show how much is actually
spent in a given period (eg monthly or quarterly) and what is left of the overall budget allocation
for that area. Regarding income, they can state how much income was earned, what percentage
of this is the total budgeted amount for a particular item (for example a ticket) and how the
amount received on a certain date compared to projections.
3.5 Budget Review
The budget gives significant input to the event evaluation process. An analysis of post-
event financial planning instruments allows organizers to see where the projected costs are
exceeded, identify areas where underspending occurs and see how various sources of income
function. This information can then be used to change future budget projections, redirect
financial resources, or suggest if tighter expenditure controls might be needed.
CHAPTER IV
CONCLUSION
4.1 Conclusion
1. Funding planning in a convention event must be done properly and thoroughly, in
order to get maximum results so that the company benefits from the holding of the
convention event.
2. For novice PCOs, the strength of the links in various fields relating to the holding of
the convention is very helpful in the funding planning stage so that funding can be
reduced in such a way.
3. The main capital in the planning of an activity must be prepared long before the event
is held. It is intended that there are fixed income costs for the company
REFERENCES

Sylvester, Darren, Adi Setiadi, 2010. Regional Event Management. Edisi


Kedua. Sidney: University of Technology Sidney

Weston, J.Fred, Thomas E. Copeland, Jaka Wasana. Manajemen Keungan. Edisi


Kedelapan. Jakarta: Erlangga