Everyone knows that an event involves numerous expenses including paying for the food, the venue and entertainment. But unexpected event expenses can hit you like a brick wall and can severely affect your bottom line. Below are 7 event expenses that you might be forgetting.
1. Tax – tax can add up quickly, particularly when it’s being added to a large sum such as a catering bill for 100 people. Whenever you receive a quote from a vendor, there should be a tax line on their quote. Sometimes vendors will leave off the tax to make your total look smaller but then invoice you for that total PLUS tax. If you do not have a tax line on your quote, be sure to ask if tax is included, on top of the total or is not applicable. Businesses that make less than $30,000 annually in Ontario do not have to charge HST. It’s always best to ask about the tax before signing your contract so you can budget accurately.
2. Gratuity – gratuity is another big one and I have seen it calculated in numerous ways and different percentages. Typically, an automatic gratuity charge of 15-20% will be added on any food and beverage costs. Sometimes it is taken on the before tax amount and sometimes it is the percentage of the after tax amount. Be sure to specify with your venue or vendor exactly what percentage it will be and on what amount.
3. Vendor meals – In many vendor contracts who will be working at your event, there will be an item line requiring a vendor meal. Some caterers have simpler vendor meals which cost less than the regular meal whereas some require you to include your vendors in your guest count. Even if your vendor’s contract does not require a meal, anyone working 6+ hours at your event should really receive one. They will appreciate it and it will allow them to do a better job. Just make sure you treat them like other guests and ask if they have any allergies or dietary restrictions.
4. Food minimums – some venues have a minimum food spend for renting our their venue which means that you must spend at least x dollars on food and beverages. If you do not order enough food and beverages to meet the minimum you must pay the difference anyways. This is likely only going to be an issue if your guest count decreases and you no longer need to purchase as many meals. Be sure to keep open communication with your venue about your guest count and ask about a minimum food spend before booking.
5. SOCAN fees – a SOCAN licence is needed if you are going to be playing any music by an artist not in attendance at your event. So this will apply to any cover bands or DJs. Often the venue charges you a SOCAN fee so that you are licensed. But some untraditional event spaces that do not often host events may not, so you will have to obtain a SOCAN licence on your own. You can read more about the SOCAN licence and apply for a one here.
6. Overtime costs – you can plan everything to perfection, but sometimes events don’t go quite according to the plan. When events run longer than originally estimated your vendors may charge you an overtime cost. Ask your vendors how much this will cost before your event so you can plan ahead.
7. Using non-preferred vendors – some venues have preferred vendor lists or in-house vendors and will charge you a fee if you hire externally. Be sure to ask if you can hire external vendors and what the fee will be. Sometimes it is still cheaper or more beneficial to use a vendor you are familiar with, but sometimes these fees can be prohibitive.
When you develop your event budget, be sure to include a contingency line of 10-15% of your total budget. This amount is to deal with any additional unexpected event expenses. Typically when we plan an event we use a 13% contingency. Don’t want to deal with budgeting your own event? Let us help! All Wrapped Up Events offer full and partial event planning services to fit your needs. Check our our services here or contact us for a customized quote.