Julia Charles Event Management: Financial Strategies for Events

This report delves into the financial management of events, using Julia Charles Event Management as a case study. It explores various methods for generating income during events, such as ticket sales, gift shops, beverage counters, raffles, souvenir stalls, photo booths, sponsorships, food stands, and letting out spaces. The report then examines pricing strategies for entry tickets, including cost-plus pricing, competitive pricing, rate-based pricing, and value-based pricing. Furthermore, it outlines the main purposes of financial management within the events industry, including ensuring a constant flow of funds, maximizing returns for shareholders, and making smart investment decisions. The importance of break-even analysis is also discussed, highlighting its role in event planning and financial stability. The report emphasizes the significance of financial planning and control in the success of event management companies.

Event Financial Management

TABLE OF CONTENTS
INTRODUCTION................................................................................................................................1
1) Advise a range of methods in generating income during the event........................................1
ii) Pricing strategies available for pricing the entry tickets of the event.....................................3
iii) Main purpose of Financial Management within the events industry.....................................4
iv) Break even Analysis...............................................................................................................7
CONCLUSION....................................................................................................................................8
REFERENCES...................................................................................................................................10

INTRODUCTION
In current corporate environment of the UK, event management industry is one of the
major sources of income for the economy. There are several companies that are operating in the
event management industry that offers wide range of innovative and creative services to the
customers and making their functions more attractive (Brigham and Ehrhardt, 2013). Herein,
researcher focuses on evaluating the financial prospects of medium sized event Management
Company named as Julia Charles Event management. Further, report highlights the method of
generating income during the event as-well-as recommending pricing strategies for the entry
tickets. Furthermore, purpose of financial management within the event industry has been
discussed. Lastly, the present work illustrates the importance of break-even analysis with respect
to the cited firm.
1) Advise a range of methods in generating income during the event
There are several methods that can be undertaken by Julia Charles Event Management
Company to generate income during Dinner and Dance party on Valentine's Eve. However,
financial advisor of the company has to evaluate those methods and present them to the event
manager so that he/she can employ them during the event in order to generate higher income
(Masterman, 2014). Following are the methods through which cited event company can generate
income during the events: Ticket Counter: This is one of the major sources of income that Julia Charles Event
Management Company can use to generate revenue (Vogel, 2014). However, organising
Dinner and Dance Party on Valentine's Eve will assist event firm to attract large number
of couples and individuals as well. Thus, with the help of these two categories of tickets
will help in generating higher income such as for individual; Stag entry ticket should be
used and for pair; Couple entry ticket should be considered (Loker, 2014). In this, price
can be set a bit higher than the original costs as people will buy the tickets to enjoy the
Valentine's Day with their loved one. Gifts Shop: Opening a gift shop within the event premises will assist in generating higher
income. It is because of the fact that people will be attracted or influenced to buy gifts for
their loved once like cards, articles, roses etc. Therefore, opening a gift shop will help in
raising large amount of income (Jones, 2014).
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 Beverage Counter: For organising a Dinner and Dance Party, Julia Charles Event
Company can open beverage counter where both hard and soft drinks will be on sales.
This is to facilitate people who are likely to drink. They can buy and this could leads to
be another good source of income during the event for the cited company (Nagornyy,
2010).
 Raffles: It is another common means of raising revenue during the event. However, at
times, it is difficult to raise cash sponsorship; it is easier to obtain goods from sponsors
which can be raffled. During the Valentine’s Day party, event manager of Julia Charles
Event Company can take raffle as the option from one of its vendors who can provide
goods that can be presented to the most beautiful couple, best dancers or best singers etc
in the party (McNeil, Frey and Embrechts, 2015).
 Souvenir stall: A souvenir store can be another major source of revenue for the event
manager of Julia Charles Event Company in the desired event. However, providing
various memento, keepsake, or token remembrance can help in attracting various
individuals present in the party to buy souvenir and raise income for the event (Baxter,
Hoitash and Yezegel, 2013).
 Photo-booth: This is one of the most innovative ways of increasing the revenues for an
event. However, manager can set-up a photo-booth section with creative valentine theme
where intended guests can click their photographs. Therefore, this can be another source
of income for the event manager of Julia Charles Event Company by influencing more
number of people (Yang and Ha, 2014).
 Sponsorship: It is the most common way of generating money for executing an event. It
is the duty of event manager of Julia Charles Event Company to attract different
organisations or individuals who can provide funds in terms of sponsorship in order to
promote their goods and services at the event place (Bladen, Abson and Wilde, 2012).
Large amount of money can be created through this way thereby helps in conducting
entire course of Valentine’s Day party in effective and efficient manner.
 Food/snack stand: In an attempt to organise the “Dance and Dinner” Valentine’s Party,
Julia Charles Event Company can set-up food and snack stand where people can visit and
have food of their choice. However, it is important to maintain hygiene of the
surrounding so that people can enjoy the party to a great extent (Fulford and Standing,
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2014).
 Letting out spaces for organisations: This can be another source of revenue for the Julia
Charles Event Company during the Valentine’s party. During the event, they can provide
space to the organisations where they can set-up their own canopy. This will be helpful
for them to market or promote their products in more effective and appropriate manner
(Hull, 2012).
ii) Pricing strategies available for pricing the entry tickets of the event
Julia Charles Event management can adopt wide range of pricing strategies in order to
price the entry tickets of the Dinner and Dance party for forthcoming Valentine day. There is
greater importance of setting suitable prices of the entry ticket. It should be affordable and must
result in generating profitability for the organization (Rogers and Davidson, 2015). Every
business can make use of various pricing strategies that act as an aid in delivering efficient sales
of the products and services offered by event management firm. The recommended pricing
strategies have been enumerated in the manner stated below: Cost plus pricing: It is regarded as an effective method that assists in building profit
margin directly from the price of products or services. Cost plus pricing is
straightforward application of fixing prices which highly takes entrepreneur into
consideration but it does not customer’s mind set up into account. Under this technique,
fix percentage of profit is set over the cost of product (Boella and Goss-Turner, 2013).
Thus, this pricing aims to recover the expenses incurred in the production of services and
products. Julia Charles is an event management firm which is planning to organise dinner
and dance party for forthcoming Valentine day. For this, it can calculate the cost that will
be engaged in paying for DJ, food and other services. Later, a percentage of profit
margins can be added over the total cost so that expenses of Julia Charles Event
management can be met in an effective manner. Cost plus pricing is suitable in terms of
assisting the organisation in attaining fix profit percentage over cost that can be used in
financing activities for future course of time (Loker, 2014). Competitive pricing: It is the kind of pricing strategy that neither focuses on cost not on
customers. Rather competitive pricing is one that deals with existing market for the
products and services of the company. Under competitive pricing, the major focus is
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being paid on searching the pricing that has been established by different competitors of
the organisation (Nagornyy, 2010). It is essential that pricing needs to range between high
as-well-as low ends in order to stay competitive in the event market industry. For Julia
Charles Event management, it is essential to carry out investigation of the other firm that
is organising events so that it can set pricing of the event in accordance with it. There is
greater need that competitive pricing need to be set in such that they can attract the
customers to a significant level (Masterman, 2014). Rate based pricing: It also referred to as hourly pricing. Event firm can make use of rate
based pricing for the services that are being offered by them (Jones, 2014). Under this,
the time spent in the party can be noted and on the basis of per hour, price the total costs
of the products and services can be set in an effective manner. With this, Julia Charles
Event Management Company can cover the amount that is being invested by it in
organising the entire event. Thus, this assists the firm in attaining huge amount of
profitability to a significant level (McNeil, Frey and Embrechts, 2015).
 Value based pricing: This pricing is referred to as the method that takes two major
questions into consideration. This is in relation with determination of whether the
prospect customers can pay for it or not. Secondly, it is about identifying will they be able
to pay or not. It is customer centred approach to pricing (Baxter, Hoitash and Yezegel,
2013). The determinant factor in such pricing strategy is to determine the amount which
customers are willing to pay instead of how much the product or service costs in
production and delivery. It is greater advantage for the entrepreneur in case of selecting
value based pricing as a pricing strategy. It is essential for Julia Charles Event
management to determine its target market and examine their willingness to pay for the
services (Yang and Ha, 2014). This is effective in determining the appropriate and
suitable pricing for products and services. Further, this can result in offering greater level
of satisfaction to the customers to a significant intensity.
iii) Main purpose of Financial Management within the events industry
In general, financial management can be defined as the process of planning, organising,
directing and controlling the financial activities of business such as procurement and optimum
utilisation of the fund. It means applying general management principles to available financial
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resources of the business (Boella and Goss-Turner, 2013). However, managing financial
resources ensure regular and adequate supply of funds to the area of concern as-well-as make
sure that employees are making optimum utilisation of available funds in carrying out the
activities of business and generating the best possible outcomes. In addition to it, financial
management is concerned with the management of all the matters that are associated with the
cash inflow and outflow of the firm. However, these cash flows can be for short or long term
tenure. Financial management concentrates on making the adequate use of available money so
that all the risks and uncertainties associated with the financial prospects of the business can be
managed or controlled in effective and efficient manner (Nagornyy, 2010). In terms of event
management industry, there are several organisations that are providing such services to its
cliental base and making their functions or party more attractive and effective. It is the duty of
senior authority to make sure that they evaluate and analyse each and every aspect before making
any decision regarding future investments or allocation of funds. Further, financial management
helps companies in planning a sound capital structure irrespective of their sector. There are
several objectives of financial management which are as follows:
 To make sure constant and appropriate flow of funds to the concerned area.
 To mainly focus on generating higher returns for the shareholders by constantly
improving the earning capacity of business, improving market price of the share and
meeting the expectations of the shareholders (Yang and Ha, 2014).
 After procuring the funds, it is essential to utilise them in the best possible way.
 Having appropriate financial management leads to make smart and effective investment
decision to enhance future contingency of business operations (Bladen, Abson and Wilde,
2012).
In context to Event Company, budget is the centre of every event financial management
firm. However, budget is the list of sources of money and expenditures. It can be small, large and
complex depending upon the nature of event. The most crucial point to consider is that event
manager should not spend more money than he/she has to receive. This can be the major
different between success and failure of the event.
Budget of an event company should look like:
INCOME AMOUNT EXPENDITURE AMOUNT
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Earned Income Salaries and wages
Ticket sales Program costs
Concessions (Fees
from stallholders etc.)
Production,
equipment’s and site
costs
Bar sales,
Merchandise etc.
Marketing costs
Food stalls Administration costs
Unearned Income
Grants
Sponsorships
Donations
There are several essential elements that finance manager of event company should focus
on so that they can carry out entire event in effective and efficient manner:
 Record keeping: It is the duty of finance manager of Julia Charles Event Company to
keep clear and accurate records of data regarding spending and receivables (Brigham and
Ehrhardt, 2013). For every event, new budget should be prepared so that financial
resources can be used in appropriate manner by considering mitigation of related risks
and uncertainties associated with economic prospects as well.
 Before the Event: Just before the event, manager should plan the sources of income from
which he is expecting to generate revenues for the event. By the means of this, bills of the
event can be paid on time and relationship with different vendors can be managed in
more effective way (McNeil, Frey and Embrechts, 2015).
 During the Event: Having proper financial management during the event helps in
ensuring that all the payments that fall due near or during the course of event are
organised in advance. The revenue generated from ticket selling should be kept safe or
handover to safe hands so that they can be utilised in making payments of different
vendors’ properly.
 After the Event: Once the event is completed, manager should make sure that all the
payments and receipts are managed properly. Along with this, bills are paid properly so
that no due payments can be left (Fulford and Standing, 2014). In doing so, manager
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should have a clear record for all the transactions so that actual income and expenditure
can be compared with budgeted one.
iv): Break Even Analysis
In general, break even analysis can be defined as the point at which sales volume of
business earns exactly the same as the amount of costs incurred to generate sales. This analysis
assists in computing the term margin of safety which is the point at which amount of revenue
exceeds the costs (Rogers and Davidson, 2015). There are several reasons for which breakeven
point is useful such as it assist in determining the amount of remaining capacity after the
breakeven point is reached which also assist in evaluating the maximum amount of profit that
can be generated. Furthermore, the main purpose of computing breakeven analysis is that it
assists in determining when business will be able to recover all its expenses and began to make
profits. In terms of preparing a business plan, breakeven analysis is considered as one of the most
significant tools (Loker, 2014). However, it is because of the fact that it helps in figuring out the
volume of sales that Event Management Company requires to cover its both fixed and variable
costs.
There are three assumptions on the basis of which entire break even analysis is perfumed
which are as follows:
 Average per unit sales price (Per-unit revenue): It can be defined as the price that
manager will acquire after per unit sales. In context of Valentine’s event, it can be sale of
per ticket after taking into account all the sales discounts and special offers (Vogel,
2014).
 Average per-unit costs: This can be refers to the incremental or variable costs of each unit
sales. In other words, it can be defined as the costs incurred by the event manager in
carrying out different activities of function or party. For an event, there are several
variable costs such as production costs, marketing and registration, entertainment, décor
vendors and administrative expenses.
 Monthly fixed costs: In contextual term, a breakeven analysis defines fixed costs as
expenditure that will continue even if activities are stopped. For carrying out an event,
there are several fixed costs that manager has to incur such as rent of premises, salary and
wages, legal document charges etc (Vogel, 2014).
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Breakeven Analysis for Valentine’s Day Party by Julia Charles Event Company:
(Note: All the figures taken into account are hypothetical in nature)*
NUMBER OF
TICKET
FIXED
COSTS
VARIABLE
COSTS
TOTAL
COSTS
PRICE/
TICKET
REVEN
UE
50 20000 2500 22500 100 5000
100 20000 5000 25000 100 10000
150 20000 7500 27500 100 15000
200 20000 10000 30000 100 20000
250 20000 12500 32500 100 25000
300 20000 15000 35000 100 30000
350 20000 17500 37500 100 35000
400 20000 20000 40000 100 40000
450 20000 22500 42500 100 45000
500 20000 25000 45000 100 50000
50 100 150 200 250 300 350 400 450 500
0
10000
20000
30000
40000
50000
60000
Breakeven Analysis
Number of ticket Fixed costs variable costs
Revenue Total costs
Interpretation:
On the basis of above breakeven analysis, it has been evaluated that to attain the
breakeven point, event manager of Julia Charles Event Company should sell 400 tickets at the
price of 100 per unit. However, considering the fixed costs of 20,000 and variable costs of 50 per
tickets, total costs incurred by the company is increasing at the sale of more tickets.
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CONCLUSION
It can be concluded from the study that the role of financial management for Event
Company is very essential. This is due to the reason of making allocation of funds to different
business activities. There is greater importance towards setting of suitable prices for the entry
ticket which is affordable and can result in generating profitability for the organisation as well.
Every business can make use of wide range of pricing strategies that acts as an aid in making
sales of the products and services offered by event management firm. Further, it is effective in
determining the suitable pricing strategy that can be used for the organisation. It has been
inferred from the study that there is presence of various pricing strategies for Julia Charles Event
management. This includes cost plus pricing, competitive pricing, value based pricing as well as
rate based pricing. With this, organisation can set suitable prices for its services that can result in
satisfaction of the customers to a significant level. Along with this, there is presence of various
methods that can generate income during the event.
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REFERENCES
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A guide to best practice. Routledge.
Brigham, E. and Ehrhardt, M., 2013. Financial management: Theory & practice. Cengage
Learning.
Fulford, R. and Standing, C., 2014. Construction industry productivity and the potential for
collaborative practice. International Journal of Project Management. 32(2). pp.315-326.
Hull, J., 2012. Risk Management and Financial Institutions,+ Web Site. John Wiley & Sons.
Jones, M., 2014. Sustainable event management: A practical guide. Routledge.
Masterman, G., 2014. Strategic sports event management. Routledge.
McNeil, A. J., Frey, R. and Embrechts, P., 2015. Quantitative risk management: Concepts,
techniques and tools. Princeton university press.
Rogers, T. and Davidson, R., 2015. Marketing destinations and venues for conferences,
conventions and business events. Routledge.
Vogel, H.L., 2014. Entertainment industry economics: A guide for financial analysis. Cambridge
University Press.
Yang, S. and Ha, S., 2014. Brand knowledge transfer via sponsorship in the financial services
industry. Journal of Services Marketing. 28(6). pp.452-459.
Online
Loker, K., 2014. The best strategies for generating revenue through events. [Online]. Available
through: <https://www.americanpressinstitute.org/publications/reports/strategy-studies/
events-revenue/>. [Accessed on 29th March, 2016].
Nagornyy, V., 2010. Five Real Ways to Generate Revenue With Any Event. [Online]. Available
through: <https://www.eventstant.com/five-ways-generate-revenue-event/>. [Accessed
on 29th March, 2016].
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