As we all know, money is one of the biggest concerns of running an association. Making money is hard but holding on to it can prove to be just as difficult. Over the years, we have seen how small decisions can be costly down the line, whereas others can turn an event from breaking even to being profitable.
When it comes to events and meetings, there are several ways to cut down costs to ensure a good margin. Shopping around to compare pricing and food and beverage minimums is highly recommended. It is surprising how much the price for the same room in a venue can fluctuate. For example, one venue we use charges more for a Tuesday or Wednesday night event than they do for an event hosted on a Monday night. Knowing this allows the you to make decisions on when to schedule meetings, choosing the cheaper option when possible. If your group likes to meet weekly, these savings can add up quickly!
Another common mistake is a vague contract. Always make sure to discuss and convey the full description and details of programs and incentives you create. A couple of years ago, an association decided to reimburse travel expenses for conference speakers but failed to outline the specific details of the offer. They received requests to reimburse first class flights and expensive hotels. Of course, this was not their intention, but they had to honor the requests, causing them to go over budget. Lesson learned - always remember to write the fine print! Since then, they have created standard invitation letters, outlining exactly which expenses will be reimbursed, and which will not be covered.
Last on the list for today – sponsorship packages. Often a lot of thought and research goes into the sponsorship program when it is first initiated, and then never really analyzed again. Over time, the offerings become stale or leak money when not reviewed and updated on a regular basis. Make sure the benefits offered at each level are fully utilized by the sponsors, especially if the benefit has a cost for the association tied to it. For example, if you provide 10 seats at each luncheon for gold sponsors, but only 60% of those seats are filled each time, the association is paying for meals that no one is eating! Sponsors may even invite guests from other companies to fill some of their designated seats, a revenue source you could be tapping into every month. It would be better to offer 6 seats that are sure to be occupied along with another benefit, such as website ad space, that does cost the association as much. Additionally, the number of sponsor seat allocations could be a large percentage of the total room capacity – if you have a substantial number of sponsors (which is a good thing in most cases – we like sponsors!); however, this would take up spots that could be filled with paying members or guests. Making small adjustments to the sponsorship packages based on their utilization for your specific market is worth the time it takes to do the analysis.
This list of these small tweaks could go on and on, but hopefully, these three items will help in your future decision-making. We will revisit this topic several more times as we journey through the world of association management. If you have any questions or concerns, please feel free to leave a comment below and we will get back to you!