It’s the day of your business’s product launch event, and there’s just one problem: the event is supposed to take place outside, it’s pouring rain, and there’s no place indoors you can host the event instead. Here lies the importance of contingency planning. Whether you’re in the event-planning industry or your business is setting up its own event, every event needs a contingency plan in case something goes wrong.
The Purpose of Contingency Planning
No matter the type of event, plenty of issues can pop up to thwart it. Equipment can fail. Staff can show up late or call in sick. Inclement weather can arrive. When contingency planning, your goal is to imagine every obstacle that could get in the way of your event and to come up with methods for dealing with it should the worst come to pass. If a piece of equipment is necessary for the event, keep a backup on hand. Schedule a few extra staff members who can fill in the gaps if you’re shorthanded. For outdoor events, make sure you have an indoor alternative ready to go.
Putting Money Into a Contingency Budget
While contingency plans are useful, you may find you need extra money to deal with emergencies and unexpected costs. For those financial issues that could derail your event, you need a contingency budget. Crucial to remember is the fact that a contingency budget is a reserve separate from the event budget, not an addition to it. If you have an event budget of $10,000 and a contingency budget of $1,000, and you estimate the cost of your event at $10,500, then you’re still over-budget and need to cut costs. You don’t want to use your contingency budget to cover the difference, because that could leave you short on money if you have an emergency. The most accurate way to figure out how much money to put in your contingency budget is to calculate the cost of potential issues and use that amount. A quicker option is to make the contingency budget 5 to 10 percent of the event budget. Just make sure you don’t go below 5 percent.
Spending From Your Contingency Budget
If you end up using some or all of your contingency budget, put the expense in the appropriate section of your event expense report, and track that you used your contingency budget for the expense. You can use your contingency budget for any unexpected costs that come up, such as equipment replacements. When event planning, prepare for the worst, and expect the best. If the event goes off without a hitch, that’s not only great for you; the business ends up ahead financially because it didn’t need to use the contingency budget. You never know when a problem can pop up, so make sure you have your contingency budget and backup plans ready for a successful event.