8 Tips on Building a Concert Budget Template to Guide the Settlement
As the live music industry comes back to life, we need to ensure that every dollar we spend on putting on grand events is used effectively. Likely due to COVID impact, 66% of event organizers stated that they anticipated budget cuts for all events in 2021, and their ability to continue organizing events hinged on their ability to demonstrate event ROI. The best way to make sure you stay within your means and accurately show ROI is to use a concert budget template.
From the moment an event is confirmed, you should (and can) begin entering the actual revenue and cost figures into your database, even if that database is a sad old spreadsheet. Most of the time, waiting until settlement to calculate revenue and cost data is borderline disastrous. Receipts can get lost, forgotten, thrown out, or filed in the wrong cabinet.
Settling should be a breeze and should feel like a victory lap after a phenomenal concert. It certainly shouldn’t feel like panic while scrambling to herd cats. By using a concert budget template, you can save a ton of time, gain consistency across the board, and offer total visibility on the profit/loss of an event.
Once you have a template, settling is easy. So how do you build a template for your budgetary needs?
Here are our eight tips for creating a foolproof concert budget template that even the intern can use.
1. Artist Offer and Deal Terms Should Guide Concert Budget Template
Before you start plugging numbers into a template, you have to make adjustments based on the kind of deal made with the artist. There are three possible artist deals:
- Flat Guarantee: the artist is paid a predetermined amount without the possibility of earning more
- Versus Deal: the artist gets a guaranteed amount or a percentage of the net income, whichever is greater
- Guarantee Plus Percentage: the artist gets a guaranteed amount plus a portion of the net income
How you set up your budget template and move forward with expenses should be guided by the artist’s payment terms. If you’re working with a guarantee plus percentage deal, you need to know how the artist’s bonus percentage will be calculated, such as whether the number of tickets sold calculates their portion.
Related: How to Manage a Music Artist the Easy Way
2. Be Aware of Gross Potential
The gross potential is an event’s total gross income from all potential ticket sales. So, the price of the tickets multiplied by the number of seats in the venue will tell you how much revenue you can make if you pack the house.
The items you add to your concert budget template will vary based on your gross potential. The last thing you want is to spend more than you could possibly receive for a sold-out concert. The expenses you funnel into a stadium tour will be vastly different than an intimate club tour.
Understanding your gross potential from the get-go will prevent you from going overboard with no chance of recovery.
3. Plan Out All Expenses
A concert budget template enables you to play around with the numbers before you decide to spend any money. Understanding how much spending room you have left after your necessary expenses will help you plan how to use the rest of your budget.
It’s also important to note which expenses are fixed and which are variables. Fixed expenses won’t change based on sales, but variable costs will.
Fixed expenses may include:
- Venue rent
- Ticketing staff
- Ticketing and credit card fees
Variable expenses are based on the number of ticket sales or net potential. For instance, the venue may agree to a rent price of 10% of the Gross Box Office Receipts (GBOR).
All of your fixed costs can be recorded as soon as you pay for them because they will appear on the settlement sheet as detailed line-item expenses. You should also leave space for your variable costs so you can quickly do the math at the time of settlement.
4. Keep the Settlement Updated Prior to the Concert
When you’re in the middle of planning an event, settling is likely the furthest thing from your mind. But with a comprehensive concert budget template, you can build your settlement document as you go.
If your budget stays up to date, you can copy the information on your settlement draft once you pay for something. Just be sure to leave the space for the final revenue numbers. This speeds up the settlement process so everyone can get paid and go home.
Settlement is a multi-step process, but adding the information you need for settlement slowly but surely into your draft condenses the process into only a few steps.
Bonus points if you have a concert settlement template to match your concert budget template.
Related: Concert Venue Settlement Best Practices
5. Make Sure All Ticket Sales and Costs Are Documented
Talk to the box office staff at the venue about what ticketing platform they use. Depending on the software and system you use for your concert budget template, you may be able to have the ticket sales updated on your side in real-time.
If you can’t get automatic updates, ask for periodic updates on ticket sales and make sure they share accurate documentation of the tickets sold and remaining tickets.
Additionally, any time you spend money for the event, be sure to get a receipt or an invoice. Your concert budget template should have room to include pictures or files so you can attach your receipts right next to the expense. This saves you the panic of frantically digging through emails to find the thing you need.
6. Establish Who Is Being Paid Before the Concert
There are many people involved in making sure an event runs smoothly.
Use your concert budget template to track the names of people involved, what their job is, how much they’re being paid, and whether they’re being paid before or after the show.
7. Keep All Receipts
We touched on this a bit in tip 5, but it’s so important that we say it again. Keep your receipts, and keep them organized.
In a perfect world, you’ll add your receipts to your concert budget template as soon as you make a purchase. But let’s say something falls through the cracks. Having your receipts and invoices on hand and accurately filed can save the day if there is a dispute over costs during settlement.
8. Use Software Like Prism to Make Settling Easy
With the right software, you can transform your updated concert budget template into a perfect settlement document. Your software can automatically incorporate ticket sales, unplanned expenses, and offer terms into the settlement.
Since you used your software to keep track of all your expenses throughout the planning process, you can have your settlement prepared with the click of a button. And since a computer is taking care of the math, you don’t have to worry about moving decimal points and accurate addition.
Additionally, your platform can help you track both your internal and external settlements, so you can demonstrate event ROI and keep planning killer concerts. You get a clear picture of the event that’s easy to share with others, and everyone goes home happy.
Prism offers a specialized system designed for live music event professionals like you. Our software is built around ditching spreadsheets for an easier way to create (and stick to) concert budget settlements that lead to simple settlements. To revolutionize your event planning system, get started with Prism today.