NEWS & UPDATES

October 4, 2007 In Archives By Advent

Budgeting for Success

By John Roberson

Estab­lish­ing a real­is­tic trade-show bud­get does not have to be a mys­tery. In the space below, we’ll walk through some of the ways exhibitors cal­cu­late their bud­get. Deter­min­ing the invest­ment amount is an impor­tant ele­ment in the suc­cess of an over­all tradeshow plan.

Let’s start with the fol­low­ing chart which shows an indus­try aver­age for the var­i­ous com­po­nents of a yearly trade show budget:

With this bench­mark in mind, how does your company’s tradeshow pro­gram com­pare to these num­bers? Your trade show bud­get or expen­di­tures may be allo­cated dif­fer­ently depend­ing on your needs. For instance, I know lots of firms who spend much more on pro­mo­tions annu­ally than 8%, but since that aver­age is a small por­tion of the whole you can tell most firms do not.

So, how do you effec­tively man­age your trade-show bud­get?  One of the best places to start is with your his­tory. Know­ing what you spent last year is a good indi­ca­tion of what you may spend in the com­ing year. One sim­ple pro­ce­dure is to keep a show-by-show spread­sheet that “rolls up” into an annual bud­get sum­mary sheet. In other words, over­lay your cal­en­dar of expenses and your cal­en­dar of shows onto a grid to show monthly expenses.

Another thing to con­sider is where you want to see improve­ments. If you need them, you will have to bud­get for those. If your man­age­ment team is like many that I have worked with in the past, they do not take kindly to neg­a­tive sur­prises. They want to know in advance what the expenses will be, and you may have to fight hard to get the money to cover them.

To bud­get for the pur­chase of a dis­play, it may be help­ful to know the cur­rent trends. For exhibits 10x20 and greater, we see exhibitors spend­ing from $75 — $250 a square foot for a struc­ture. That may include graph­ics. So a 10x20 dis­play at an aver­age of $100 per square foot is $20,000 (200 sq ft x $100). You may see dif­fer­ent met­rics than these, but this holds true for island dis­plays or dis­plays larger than 20x20’s and larger (400+ sq ft).

Major mar­ket forces have shifted within the 10-foot dis­play arena and have caused a great deal of chaos in terms of what exhibitors spend to fill a 10x10 space. Some clients are able to fill a 10’ space for $1500 and $2,000, but these tend to cre­ate a thin or light pres­ence. We more often meet exhibitors who need their display(s) to have graph­ics and A/V or com­puter demonstrations. To com­mu­ni­cate the company’s mes­sage using this tech­nol­ogy, exhibitors need a more sophis­ti­cated back wall and a bud­get of $8,000 to $10,000 for a 10-foot space.

Cap­i­tal invest­ments, includ­ing a tradeshow exhibit, must be depre­ci­ated over the life of the asset. Only that spe­cific year’s expensed por­tion will hit the annual bud­get. For exam­ple, a $9,000 exhibit cap­i­tal­ized over three years is expensed within the booth and graph­ics cat­e­gory above at $3,000 annu­ally or $9,000 / 3 years.

If your bud­get is low, this is your first show or you are not sure what foot­print you want to main­tain, you may want to con­sider rent­ing. The aver­age cost of rent­ing an exhibit struc­ture is one-third of the pur­chase price. For exam­ple, a 20x20 exhibit that is $150/sq ft is $60,000 to pur­chase (20 x 20 = 2400 sq ft x $150) and $20,000 to rent. Buy­ing graph­ics can increase the rental cost to $40,000, but that is still a frac­tion of the pur­chase price. Other advan­tages of rent­ing are a fresh look every year and not hav­ing to find a place to store your display.

Our vision is to help exhibitors increase pro­duc­tiv­ity and effec­tive­ness through their trade-show, event and envi­ron­men­tal mar­ket­ing. If you want to dis­cuss your bud­get as a whole or just a spe­cific area, any of our account exec­u­tives would be happy to do so.

Authored By Advent

Advent partners with organizations to help them visually express differentiation.