The world is emerging from the pandemic and fair season will soon be in full swing. Now’s the time to take steps to maximize your revenue and keep costs down. But how do you do this? Ungerboeck works with some of the biggest fairgrounds in the country, and we know the challenges of balancing a budget. Here are 11 financial factors you should understand when hosting a fairgrounds event.
How to Be Mindful of Your Fairground Revenue
Knowing where your earnings are coming from and where your money is going can help you run a profitable event. You can do this by tracking actuals, weighing the practicality of mission-driven events, and capitalizing on concessions commissions.
1. Tracking actuals. Ensure all revenue is being captured by tracking actuals. This is important because of how many unplanned changes happen over the course of an event or fair. For some organizations, this is a big change in business process, but the outcome and increase in revenue can be substantial.
2. Weigh the mission value. Revenue isn’t a top priority for mission-driven events. These can include 4-H, board meetings, and local agricultural exhibitions. But mission-driven events can still be costly and potentially take up space that a larger, more profitable event could better utilize by charging for concessions and parking. On the flip side, there’s something to be said for hosting these types of events and being a good community and industry partner. While there’s room for different types of events, make sure you carefully evaluate and balance what’s planned into your calendar.
3. Concessions commissions. From funnel cakes to fried Oreos, food is one of the greatest things about a fair. It’s also one of the most lucrative. Tracking the commissions on your concessions can give insight into the highest-grossing vendors, then you can drill down even further to the specific sale items as there’s often a clear 80/20 winner. When you know what’s popular, you can better plan your vendor layout and make note of who to spotlight in your advertising.
Ungerboeck’s Events Order Management can help track your revenue by taking the tediousness of pricing and payments out of your hands. It handles the details of reporting by capturing all of your charges so you know exactly where your revenue is coming from and where your expenses are going. Sit back and watch the revenue grow in real time.
Increasing Event Profitability at Your Fairgrounds
Organizing a profitable fairground event is just as much about what you don’t do. In other words, be mindful about your costs and conservative about where your budget goes. Eliminating potential revenue reducers, carefully managing your inventory, adding value to sponsorships, and uncovering new revenue streams can all increase your profitability.
4. Eliminate revenue reducers. Look at where your money is going and see what you can do to stem the tide. Subcontractor needs, for example, can be a big budget drain if you’re not getting a fair price. Always shop around for quotes before hiring a subcontractor. Building a relationship with one you like can yield better rates in the future. Staff overtime is another area you can work to eliminate. And finally, a dedicated army of trusted volunteers can save you a lot, plus help cultivate a valuable sense of community.
5. Inventory management. Maintaining equipment inventory helps you avoid overstocking which ties up cash flow. Good inventory management can prevent unnecessary investments in equipment or other resources you have no use for.
6. Add value to sponsorships. To attract more sponsors, think of ways to make it worth their while. This can include promotion on your social media channels, offering the use of the fairgrounds for sponsor functions, and placing branded signage in prominent areas throughout the event. Understand the value of your audience, both onsite and online. Promoting business-building opportunities by facilitating working relationships between your co-sponsors is also a great way to add value.
7. New revenue streams. Look for out-of-the-box opportunities that go beyond the obvious money makers like concessions and sponsorships. Open your grounds up to new types of events that involve group sales, like field trips or church bazaars. Priority parking and RV camping reservations are also good ways to boost revenue. Leveraging your website can encourage more online group bookings and provide better customer service. Make sure all information is easily accessible and provide easy-to-find contact information in case people have questions or need assistance.
Identifying Hidden Expenses with Fairgrounds Management
Hidden expenses are unforeseen costs. Any event planner can tell you that dealing with the unpleasant surprises of hidden expenses as they come up are a part of the job. Some common hidden costs for fairgrounds operators include supplies, assets, maintenance, and equipment depreciation.
8. Supplies. Supplies are the services and equipment you need to run an event. Think tables, chairs, booths, and audio-visual equipment. Although things like tables and chairs are obvious, your event could also require other not-so-obvious necessities. For example, have you thought about stocking your restrooms? What supplies will you need? Put together a list so you can think through exactly what you’ll require. Then find a wholesale company that can provide the supplies you need in bulk for a lower price.
9. Assets. Assets are the heavy equipment. This means the grounds, rides, buildings (permanent and temporary), and other structures that are owned or rented by the fairgrounds or exposition center. To boost attendance and drive repeat business, it’s important to keep your event fresh by rotating in new rides and retiring old ones, providing beautiful surroundings, and featuring state-of-the-art buildings. Since you’ll likely be working with third-party companies for most of your assets, ask them about new things they’re developing to get ideas to make your event stand out. Start planning well ahead of time – ideally, immediately after the current years’ event ends – so you can figure the new asset expenses in your budget.
10. Maintenance. Sometimes things break. Breakdowns are guaranteed to happen, but what’s not guaranteed is what will break, how often, and how much money it will take to repair. You’ll need to set aside part of your budget specifically for maintenance, but how do you know how much? A market analysis conducted by the Lincoln County Fairgrounds suggests an annual range of $170,000 (low use) to $380,000 (high use). These numbers account for maintenance related to all operating expenditures, including labor costs, regular maintenance, insurance, advertising, and contingency.
11. Fairground equipment depreciation. Depreciation measures how much a piece of equipment drops in value every year. Calculating depreciation can help you make smarter maintenance decisions, particularly for older equipment. To maximize your costs, you’ll need to track it on each piece of equipment.
Constantly looking for hidden expenses and finding solutions to head off each one is time consuming and can be exhausting for fairground professionals and organizers. Ungerboeck software provides the tools you need to simplify the process. From proposal requests to tracking expenses, our unified fairground platform can capture expenses that aren’t always tangible, so you’ll have fewer surprises. Plus, you’ll benefit from the convenience of tracking your finances in the same software you use to manage your events.
As with any event planning business, it’s crucial to understand your monetary streams. Being mindful of your revenue, finding ways to boost event profitability, and identifying hidden costs are key pieces to the puzzle. With these 11 tips and Ungerboeck’s fairgrounds-focused solutions, you can boost your bottom line by hosting a fair that’s both fun and profitable.
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