Sure, those poached pears and crab puffs were a smash hit on the corporate event day. But when the Event Function bills come due, it’s those little extras that can put a crimp in your business faster than you can say success.
Corporate Event Experts say event organisers or the marketers in charge of the event often get in over their heads when signing checks for the big day, to impress clients. That, they say, leads to reckless spending, heavy debt loads and a rough start to a new finance year/term.
“You get caught up in the mood and you go out and buy all these unnecessary extras, little gifts for clients, or their wife’s. ,” said Aleit Swanepoel; director of educational programs for theThe Aleit Group ”But, as with every other step of life, control is part of taking charge.”
He adds: “It’s hard to start a new financial year or term in debt. Money is the source of more arguments than anything else.”
The good news is, with a little creative financing it is possible to have your event — without sacrificing that big evening the impress the clients. Strategies include the pay-as-you-go plan, home equity loans and Corporate loans.
What’s important to you?
The first step to avoiding a corporate event hangover, of course, is to set a realistic budget and stick to it. Once that’s complete, sit down with pen and paper and jot down your top priorities.
Always dreamed of a limousine to drop you at the red carpet? Then go ahead and splurge, but the cappuccino bar has to go. Is a custom-made designer suit a must? Get those measurements going, but opt for a D.J. instead of a live band.
“We recommend highly to CEO’s and the Event Organisers that they prioritize what’s really important,” said Richard Markel, director of the Association for Wedding Professionals. “Everything else will fall into place.”
Once those steps are complete, the real challenge begins paying the piper.
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One method that is gaining popularity is to seek out sponsors.
Under such arrangements, event organisers typically contact corporate vendors to solicit free or discounted services in exchange for advertising on the day.
Photographers, for example, might agree to snap pictures for free if the MC mentions the company’s name on the night.
It’s a win-win situation.
“Word of mouth is very powerful in this industry, which is why this has a potential for working,” Markel said.
Failure to carry out either end of the bargain would result in a breach of contract.
“I contacted quite a few people a day, nearly 50,” noting sponsors saved me more than $4,000 in event costs . “It really is a full-time job. You usually have to explain it to the vendors since this is still a new idea. In many cases, they’ve never heard of it.”
Keep in mind, however, that not all vendors, especially the experienced ones, will even entertain the idea of sponsorships. And others in the trade say you might want to consider the tackiness factor, as well.
“I understand where the pressure is to do this because so many companies pay for their events themselves these days and they don’t want to give up that big day to get more contracts/work in. But it seems like kind of a sell-out. This is a major life moment and I think you should do it within your means rather than trying to turn it into a marketing event.”
Hitting up the lenders
Another option when it comes to covering your costs, of course, is to hit up the banks most of which now offer some sort of loan program designed for special events. A quick search on the Internet turns up any number of “corporate loans.”
Interest rates start at about 13 percent, with terms as long as six years. There are no annual fees, no penalties for prepayment and the money can be used to pay for whatever they choose.
Pay as you go
It comes as no surprise, but the best way is to stay out of debt is to pay-as-you-go. Not everyone has the time horizon or financial means to make it happen, but you might be surprised how many of those bills you can knock out before for clients get knocked out on the alcohol at your event.
Most corporate vendors including the baker, caterer, reception hall, etc require a 50 percent deposit at the time you place your order anyway. That means you’re already halfway there.
Same goes with most money market funds, which are fully liquid and offer interest rates in the 4.5 percent range. That compares with the 2 percent you might earn at the local bank. If you go with a money market fund, Means said, it’s wise to shop around for one that pays interest monthly, if not daily. The more often interest is paid, the more money you’ll earn.
A short-term certificate of deposit, or CD, also does the trick. Offered with a variety of maturities, including 3 months and 6 months, these fixed-income savings tools offer about the same interest rates as money market funds. They’re a good place to park your dollars, Means said, but don’t forget you can’t dip into those funds until the CDs mature.
For more on funding your event, make use of the following companies and experts:
Experts in event project management: http://thealeitgroup.com/aleit-events/
Credit Advice for Corporate Events: http://www.connellfoley.com/