Managing even the most modest event requires considerable intellectual and material efforts as well as expenses. Effective preparation of a sports event needs a clear understanding of the ultimate goals, objectives and the desired public response to the event. Without answering the abovementioned questions, the event manager cannot start efficient preparation process.
Budget is considered to be the key element of any event that needs to be planned and precisely considered. In fact, the preparation of the event can also be considered as a business process. It means that controlling of the costs and expenses should be done at the same extent.
The prime task of effective budget planning and management requires determining possible costs of the event. For example, the costs for the simple sports event for 100 guests may need from $15,000 to $20,000. However, such sport event may require organization of additional events such as pre-party, after-party, press interviews, press conferences, television broadcast, press lunches, VIP-cocktail parties, etc. Accordingly, the cost of the main sports event can significantly increase.
Budget calculations may be affected by the data received from the researches, who predict possible number of the event participants and the evaluation of the alleged costs and the expected income from the event. Planned calculations may also be based on the comparison of the input data with the data of the similar sports events that have been held earlier as it is unlikely that the circumstances of repeated events will change so dramatically that the previous data will not help in the planning process.
However, the scientist advises to combine the creative and financial planning in balance. It is claimed that creative ideas should correlate with financial opportunities of the sports event organization. The financial philosophy of the company should also be taken into account as it can be crucial for the determining the value of the participation in the event.
In fact, several methods of budget calculation can be defined as follows: - direct counting method, which implies the calculation of the budget indicators based on the real needs and performance in the context of individual items of income and expenses for each enterprise, organization or institution;
- regulatory method, which is based on the norms and standards set in relation to the relevant indicators; - analytical method, which is based on the calculation of the targets on the basis of determination of the impact of a variety of reasons. In fact, it is based on the simulation of the budget indicators.
Solomon defines general and administrative (G&A) expenses as the compound of the following items such as the cost of staff travel (Travel) and representation (Entertainment), including administrative costs, such as the salaries of administrative staff, executives salaries, Office Payroll and Office Expenses, Office rent, Insurance, Trademark search, etc. The costs included in this section are real or alleged payments in cash or cash equivalents that have already been made or will be made as a result of activities aimed at generating revenue. In fact, the scientist proposes the line items to determine revenues and expenditures for the event. In addition to G&A expenses, he defines the following expense categories, such as talent, production, facility, sales and marketing, and miscellaneous items that include all those unpredicted expenditures which may occur during the process of event organization. Evaluation of these categories is crucial for the budget calculation as it helps to account for everything avoiding the situation of unpredicted financial shortages.
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