A lot of my clients hold live events as part of their business model.
Usually, they sell tickets to the event – where they deliver amazing training, camaraderie and insight well worth the price of admission. And usually, at some point during the 2-3 days, they also present event participants with an option to continue working together in a deeper, longer-term relationship.
This model makes live events both an end in themselves, plus a means to more sales.
In my role as my clients’ ‘Profit Optimizer’, we do a careful post-mortem on each live event. We want to know whether the event was a success.
Wow. Loaded question.
There’s Measure #1 of Live Event Success – did you cover your costs? I mean, did your ticket sales match or exceed the hard costs you had to pay out to hold the event?
Seems obvious, but it’s not always super-straight-forward. You may have had a range of ticket prices – tiered VIP pricing that included extra perks like lunches, drinks or welcome gifts. You may have had early bird pricing to motivate sales.
Sometimes you’ll have revenue from event sponsors. That counts too.
So… you have a certain amount of revenue “in your pocket” on Day 1 of the event. Now you have to look at the costs of holding that event.
The obvious ones are out-of-pocket expenses like conference room costs, any included snacks, food & drinks, AV equipment & event staff wages & gratuities.
But what about your own travel, room & meals, as well as the cost of any team members you’re bringing? Yup. I include those as hard costs too.
Let’s not forget your PRE-event hard costs. Ad spend? Marketing services? Event content development?
If tickets + sponsorship MORE than covered your out-of-pocket expenses then AWESOME.
If not, don’t worry yet. Because there’s also…
Measure #2 of Live Event Success – did you generate revenue from the event itself?
I don’t count “promising connections” or “strategy sessions booked” as event revenue. I’m talking about Sales Closed. Those sales can be in the tens, even hundreds of thousands. Did you make an offer into a long-term mastermind program? Or even 1:1 consulting? How about hard product sales? What real dollars arrived as a result of your event?
Don’t forget any commission you can claim from your Sponsors’ Sales too. That’s something you will have worked out ahead of time with your guests/sponsors. (On the flip side, if you have Affiliates helping you promote your event, you may owe them commission.)
Okay, so your event cost you $8K all told, but you booked $75K in future business.
Now we ask: How profitable is that future business? From a pure profit perspective, what direct costs are associated with delivering that future business? If tickets + sponsorship revenue does NOT cover all your event costs, then I will typically allocate the leftover expenses to the future revenue.
For instance, event costs are $8K, with only $5K received in tickets and sponsorship. That $3K loss, I’m okay with putting against the $75K future revenue you closed during the event. AND I’d keep in mind that the next time you run an event it’s worthwhile trying to find ways to lower the $8K cost and/or increase the $5K revenue so the event can stand on its own.
So then it comes to Measure #3 — What was the event’s toll on YOU?
This is when the money hat comes off, and the compassionate human hat goes on. Because the bottom line is, ‘success’ contains a personal component. I know business owners who are completely exhausted by hosting live events and need at least a year to recover; and I know business owners who can’t get enough of them.
I just wrapped up my own 2-day live event in San Diego. As the CEO of my business, it’s my turn to assess whether the event was a success.
Truth be told, the event alone did not stand on its own as a profitable endeavor (measure #1).
I sold fewer tickets than I’d hoped; however, my direct expenses came in lower than originally estimated so I came out ‘less behind’ considering there were fewer butts in seats. I didn’t include the cost of canine care, though, only because I had the wrong checkbook with me when writing the check — it should have been counted and will be next time.
When it comes to measure #2, I was happy to see that my long term offer at the event was very well received and I signed more than half of the attendees to longer term work. Exciting? Of course! Yes, because the event resulted in revenue… but even more so because it means what I shared at the event inspired a new group of business owners to take charge of their business financials. That’s a new cohort of small-business owners who will sleep better at night, and grow, hire and share more wealth in their communities; and I can’t wait to work with them!
Now: measure #3. I find the lead-up to live events exhausting, and I always wonder why I’m doing this again… until I’m in the middle of a room full of dedicated business owners, laughing, learning and leading them to take charge of their numbers. Then I remember, oh yeah — this is why. And that, for me, adds up to event success.
If you’re planning an event and want some help assessing profitability – or just want to talk revenue, expenses and finding more profit in your business, I’d love to hear from you! Book a complimentary Keep More Money Strategy Call here.