2.1 Creating and keeping control of a budget

Contents:

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1. Managing a Project

1.1 Setting up and Planning

1.2 Running the Project

1.2.2 Event Preparation

1.2.2 The Big Day!

1.3 Completing the Project

2. Finance, Budgeting and Fundraising

2.1 Creating and keeping control of a budget

2.2 Fundraising

3. Marketing and PR

3.1 Approaching Press

3.2  Measuring Success

As mentioned in Section 1, you will need to create a budget right at the beginning of the project, before contacting any promoters. Budgets are ever evolving, so you will start with some assumed figures, which you will replace with actual figures during the course of the project. Although many figures will be assumed, there will be some fixed points. For example, as the Composer/Producer of the Newt Project you have agreed a minimum fee for which the performers are willing to perform, so that figure is non-negotiable.

From a practical point of view, the easiest way to put figures together is to create an Excel spreadsheet. With Excel you will be able to use ready-made tables, which, once you know how to insert simple formulas, will do the adding up for you. A budget is made up of two main parts: the income and the expenditure.

Income – Traditionally, you first list income within a budget, so put down all amounts that will be paid to you. This would include estimated fees from venues, projected box office income, grants applied for, and amounts to be raised from sponsorship. To estimate the fee you might receive from the promoter, put yourself in the promoter’s shoes. If they have a hall with 120 seats and the top ticket price is likely to be £15, the maximum income from ticket sales is £1,800. However, this sum does not take into account other costs to the venue like stewards, provision of technical equipment and overheads. With any estimated income take a conservative approach, as it will be better to end up with more rather than less income than you budgeted for. If, like the Composer/Producer from the Newt Project, you are taking box office income for a concert, check with the venue if they are deducting any amounts for card processing, administration or provision of stewards or security. Also, remember that many venues have a policy of offering a percentage of concessionary tickets (for pensioners, full-time students and young people under the age of 16), so not all tickets will be sold at full price and that you will want to put some aside as complimentary tickets for special guests.

It can be useful to include ‘in kind’ contributions in your budget. ‘In kind’ contributions are any materials or services provided to you free of charge or at a reduced rate. Looking at the Newt Project, you, as Composer/Producer, would have budgeted an amount for accommodation for three nights and five people (four musicians and the producer). However, the university, which is hosting the second concert of the tour, has offered to put everybody up in student accommodation, which means you no longer need to cover those costs. Additionally, the festival, promoting the first concert of the tour, has offered a large room as rehearsal venue for two days in advance of the concert, thereby eliminating the costs of you having to hire a hall for the rehearsals. Lastly, the third concert of the tour is at a wildlife centre, which often hires out their hall at a commercial rate, but which is waiving the rate for your project, offering it to you for free instead. Any ‘in kind’ amounts should be shown in budgets as part of a grant application, as they not only demonstrate cost savings but also a belief in the project from third parties. However, do make sure that whatever you list as ‘in kind’ income is also listed as a cost in the expenditure section, otherwise your budget will no longer balance.

Expenditure – Once you’ve drawn up all income amounts, start on the expenditure. It might be useful to list costs in blocks, with a heading for each block (rehearsal and concert fees, travel, accommodation, tech hire costs, marketing, etc). You will have established some costs during the Setting Up and Planning phase, but many you will have to estimate for the first budget draft. The more research you can put into the estimated amounts, the better, as this will make the risk of discovering a shortfall at a later stage much smaller. For the Newt Project, while all four musicians live in Nottingham, the live electronic person is based in Plymouth, so with concerts taking place in London, the Lake District, and Nottingham you could already research train costs and come up with a fairly accurate amount.

Although many promoters will include your event in their marketing, it is still worth putting in an extra amount for marketing of the tour/project as a whole. For the Newt Project, you could have a tour flyer designed, which features details of all three concerts and could therefore be used by all the venues. Depending on the venues’ requirements, you could have printed as well as electronic versions of the flyer, which would incur printing costs in addition to a possible design fee.

As Producer you are carrying out important work – without you the project would neither have come to life nor would it be run as smoothly – and it is important that you acknowledge the importance of your work by paying yourself. As a rule of thumb, the fee for the producer should be roughly 15% of the overall budget.

As a final item in your budget, you need to include a contingency, which could be roughly 5% of the budget. The contingency allows you a little breathing space should things not go to plan and your project incur extra cost. This could cover a whole range of scenarios, for example, the oboist for the Newt Project breaks her index finger two days before the first concert and the oboist stepping in lives in Newcastle, so new and longer train journeys need to be booked at short notice.

As a general point, always check if costs are including or excluding VAT, otherwise you might end up with unexpected extra outgoings. For example, a printing company might quote you £250 for the printing of your flyers but not mention that this figure is exclusive of VAT and send you a total bill for £300 (£250 + 20% VAT). Also, if you are working with an already very successful performer it is possible that they are VAT registered, which means the invoice they will send you for their concert fee will have VAT on top.

Generally when budgeting and planning ahead, it’s worth being aware that any project is under three interdependent constraints: money, time, and quality. For example, if the ensemble you choose is willing to give performances without getting paid for them, you might save on cost, but the quality of the project is likely to suffer as the performers might spend only the minimum amount of time engaging with and rehearsing the programme. Or if you are pressed for time and rush out a press release to generic e-mail addresses your income through box office might be diminished, as few people will have heard about your project.

Budgets are never static, they change and evolve during the course of the project, but it is up to the Producer to manage the changes and, in particular, to control the risk that comes with fluctuating costs. Your income is likely to stay the same, so if your expenditure increases you will either have to spend less on something else or use your contingency. Keeping an eye on costs is especially important when somebody else makes payments, which are to come out of your budget. For example, as Producer of the Newt Project you have asked the musicians to book their own travel and have planned to reimburse them later. Your budget contains fares, which were researched 6 months before the concert dates, whereas the musicians only booked the tickets 3 weeks in advance, by which time, ticket prices have gone up by 50%, leaving you with a substantial shortfall. Therefore, it is vital either to agree on travel cost limits at the outset of the project or for the producer to make the booking him/herself.

Once you’ve listed your income and expenditure, you need to deduct total expenditure from the total income, which leaves you with the difference. The difference shows whether you are working with a surplus or a deficit and this is the figure you need to watch most closely throughout the project. As money in the arts is tight, your initial budget might well show a deficit, which means, to get your project off the ground, you will have to raise extra money.

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