The Cost of Doing Business
Society of Government Meeting Professionals
Education
Resources
Networking
A Gilmer Institute of Learning Presentation
www.sgmp.org
Goals of Today’s Workshop
• To demonstrate the factors that determine
how a government meeting is planned
• To explain the perspectives of both meeting
planners and suppliers
• To introduce you to resources offered by
SGMP
www.sgmp.org
In today’s environment the cost of an
event is influenced by many factors
•
•
•
•
•
•
•
Demand versus supply
Scope and size
Potential cost
Potential profit
Cut backs
Budget
Others?
www.sgmp.org
Most Government Meeting Planners…
• Have limited on the job training in meeting
and event planning.
• Wear many hats – planning events are usually
part of “additional duties as assigned.”
• Plan most events with a bottom line, breakeven objective.
www.sgmp.org
While Most Suppliers…
• Are “green” when it comes to the government
market.
• Do not know how to find a government
meeting planner.
• Receive limited training in event planning.
www.sgmp.org
Now let’s look at the cost of
doing business from both
the planner’s and supplier’s
perspective
Let’s start with the
planner’s side
www.sgmp.org
Planners need to know their financial
goals and limitations
Cover
costs
Make
money
www.sgmp.org
Planners should identify all costs and
potential revenues based on:
• Meeting history
• Estimates from printers, vendors
• Hotel sales kit samples (F&B, AV, meeting
room charges, taxes, gratuity)
• Know current per diems
• Sponsors, grant money, registration fees
www.sgmp.org
Planners should format their budgets
so they can be clearly understood
• Organize all expenses
under cost centers
• Show how registration
costs are determined
• Keep notes of how
potential costs are
calculated
www.sgmp.org
Planners should determine break-even
attendance
• Use meeting history if available
• Know your audience
• Determine any potential conflicts (holidays,
transportation)
• Be realistic
• Remember guarantee counts are paid for even
if they do not attend!
www.sgmp.org
Break-even forecasting
Fixed Cost – expenses not
dependent on attendance.
Examples:
Meeting Room Rental
A/V expenses
www.sgmp.org
Break-even forecasting
• Variable Costs – Varies by
number of attendees
Examples:
Food and Beverage
Parking
www.sgmp.org
Break-even forecasting
• Contribution Margin – The amount
each attendee “contributes” towards
fixed expenses
Contribution Margin = Registration Fee – Variable Costs
www.sgmp.org
Break-even forecasting
Break Even Attendance – What you need to
cover your costs
Total Fixed Costs
Contribution Margin
(Registration Fee – Variable Costs)
Break Even Attendance =
www.sgmp.org
Break-even forecasting
It wouldn’t be
any fun without
an example!
Your registration fee is $20. Your supplier charges you
$1,000 for room rental, $100 for audio visual, and you
pay $500 for a speaker. You are charged $10.00 per
person for food and beverage service.
How many attendees do you need to cover your costs?
www.sgmp.org
Break-even forecasting
Your registration fee is $20. Your supplier charges you $1,000
for room rental, $100 for audio visual, and you pay $500 for a
speaker. You are charged $10.00 per person for food and
beverage service.
How many attendees do you need to cover your costs?
Break Even Attendance = Total Fixed Cost / (Registration fee – Variable Costs)
Break Even Attendance = ($1000 + $100 + $500) / ($20 - $10)
Break even Attendance = $1600 / $10
Break Even Attendance = 160
www.sgmp.org
Planners should know the travel
policies
• Federal
• State
• County and
Municipal
www.sgmp.org
Let’s Talk RFP!
www.sgmp.org
What will the Supplier be looking for in
your RFP?
•
•
•
•
•
•
•
Number of Rooms
Rooms to Space Ratio
Date and Pattern
Catering Revenue
Potential Meeting Room Rental
Audio Visual Revenue
Other Revenue Centers
Why is all of this important to
Suppliers?
www.sgmp.org
Planners, you know what your meeting
should cost you, what will it cost the hotel?
82% of total costs come from:
•
•
•
•
•
•
Labor 31.6%
Food 19%
Benefits 8.2%
Cost of Sales 4.5%
Management fees 5%
Security 2%
• Admin
and Accounting 3%
• Laundry 2.6%
• HR and Engineering 1.5%
• China Glass Linen 3.6%
• Uniforms 1%
www.sgmp.org
Learn hotel profit margins
• Beverages 18%-21%
• Banquets 35%-38%
• Guest rooms 70% to 75%
www.sgmp.org
How can Planners be Suppliers’
partners in business?
• Give accurate information
• Be flexible with dates
• Work with Suppliers that understand your business (like SGMP
members!)
• Keep histories of your past events
• Don’t let the lowest price for your RFP be the deciding factor.
Remember value also should be considered in your decision
• Know the difference between your needs and your wants
• Be realistic when making your budget
www.sgmp.org
How can Suppliers be Planners’
partners in business?
• Understand the RFP process
• Know your hotel’s profit margins and how to evaluate the
business
• Be willing to work with per diem rates and menus
• Be able to offer value added incentives to help planners keep
costs down
• Be proactive and create government meeting package based
on planners budget
• Be flexible and offer more than one option on dates
• Be creative with per diem priced menus
www.sgmp.org
How can you maximize your business
skills & knowledge?
• Education
• Resources
• Networking
Your Keys to Professional Development
Through SGMP
www.sgmp.org
Education
• Consider earning your Certificate in Government
Meeting Planning (CGMP)
• Earn CEU’s for meeting management seminars and
workshops
• Participate in SGMP’s National Education Conference
• Attend monthly chapter meetings
www.sgmp.org
Government Connections
Naylor, LLC
Is Our Only Official
Advertising Partner
www.sgmp.org
Online Suppliers Guide
Naylor, LLC
Is Our Only Official
Advertising Partner
www.sgmp.org
SGMP Web Site
www.sgmp.org
Networking
• Attend chapter monthly meetings
• Attend NEC & EXPO
• Join professional meeting planning
organizations -- such as SGMP!
• VOLUNTEER!
www.sgmp.org
Shake hands… you are partners in
the cost of doing business.
www.sgmp.org
Thank you for attending today’s session. You
earned .125 continuing education units &
enhanced your skills! Please don’t forget to
complete the evaluation form before you
leave.
A Gilmer Institute of Learning Presentation
Created by Charles Sadler, CGMP, CHSP, CHSC
www.sgmp.org