Does your event suffer from being overly generous?
Right now, our local area is under a severe wind watch for the next 12+ hours. The forecast is calling for wind gusts up to 75 Mph / 120 Kph. Forecasters are predicting widespread power outages and property damage due to high winds. If you listen to the local media, there is plenty of discussion about being prepared. "Are you ready when the power goes out?"
The same cautionary approach above needs to be applied to any event. "Are you ready for when things don't go as expected?" It could be anything. Hopefully, it never happens. But if something bad happens, are you prepared?
Years ago, a not for profit organizer was forced to sell their event because they couldn't pay their debts.
The previous event before their last event, the organizers generated over two hundred and fifty thousand dollars USD of profit. Their mindset was, "we're a not for profit organization, and we can't have a lot of money in our bank account." So, they gave ALL their profit away to local charities. They were praised by other organizations for "being so generous!" As a result, this left the event organizers with no cash reserve in the bank!
Unfortunately, the next time their event occurred bad weather and a lack of ticket sales put them in $50,000 USD of debt. The demise of a great "not for profit" event was the direct result of being too generous! The event organizers consider it their single biggest regret.
What's worse is that the local charities the event previously donated to never lifted a finger to help their donor. To be clear, the event organizers didn't expect other organizations to help pay their debts. Yet it's tremendously disheartening to hear, "oh, we're sorry that happened." (But thanks for all the money!)
As my departed father once said, "it's important not to confuse your tax status with your business responsibility to pay bills." If you can't pay your bills, it doesn't matter if you're a charity. Because you can't be charitable when you're broke!
Do you have a healthy cash reserve for your event? Most events do not. Make sure you have a healthy cash reserve ... even if your event is for profit or not!
Image: A bolt holding up the side of the Acropolis in Athens
Want to get more event planning and promotion advice? Check out the articles below:
- Event Marketing from the Magazine Rack
- An Extremely Dangerous Event Planning Mistake
- Event Marketing Research - Know Your Target Market!
- Knowing Your Event Patron
- Event Planning: The Customer Avatar and Your Event
- Get Great Ideas from an Event Marketing Field Trip
- Where to Advertise Your Event
- Modeling Other Event Marketing and Promotions
- Event Marketing: Ask Your Patrons What They Want
- Your Event Promotion and Marketing Strategy - Start Point