Special Event Break-Even Analysis

Photo Credit: Jeshu John

Break-even analysis is used to determine at what point you are able to cover all expenses and begin to make a profit. This is crucial in business as well as special event planning.

It is important to consider all costs in the equation. To get started identify the costs and contribution margin.

Fixed Costs: Expenses that do not change no matter how much business you have or items you produce. Examples: Rent, utilities, license fees, salary, leases, etc.

Variable Costs: Expenses that depend on the company’s production volume or business level. Costs rise as production increases. Examples: cost of materials, freight, commissions, credit card fees, hourly labor, etc.

Contribution Margin = Price – Variable Cost

Break-even for Quantity = Fixed Costs / Contribution Margin

Or

Break-even for Quantity = Fixed Costs / Price – Variable Cost

Here is an example:

Let’s say we are putting on a concert. We know our fixed costs are $15,000. We plan on selling tickets for $20 each. The variable costs are $5 per ticket.

Break-even = $15,000 / ($20-$5)
= 1,000

This means 1,000 tickets would have to be sold to break-even.

It is extremely hard to break-even on a first year event. Most event producers will give an event anywhere from 3-5 years to determine if it will be profitable and should continue. I watch break-even points obsessively when I produce special events. It is the best way to make sure you recoup expenses and manage costs closely.

Break-even analysis also helps predict if an event will be successful or not. Let’s say in the example above that the venue only allows you to sell 700 tickets. Based on the break-even analysis you know with the $20 ticket price there is no possible way to break-even on ticket sales and this concert is going to lose money. You need to charge more for tickets, cut costs, or accept the concert won’t make money. At least you know all your options because you took the time to investigate the break-even analysis.

Want to reduce your break-even point? Check out this post on AccountingCoach.com.

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Twenty Under 40 Awards

Photo Credit: Caleb Wilson/Special to the RGJ, RGJ.com

The Reno Tahoe Young Professionals Network and the Reno Gazette-Journal presented the 9th Annual Twenty Under 40 Awards at a reception on Wednesday, November 4, 2015. I was one of the young professionals honored at the event held in the Tuscany Ballroom at the Peppermill Resort Hotel. According to the Reno Gazette-Journal the award “honors young professionals in Reno-Tahoe who are stretching the boundaries of achievement in their professional lives, personal achievements and by giving back to the community.”

Each year nominations are solicited from the community for the awards. This year there were 155 young professionals nominated. The nominees are analyzed and then scored based on professional achievement and community involvement. This year the results were very interesting because the top 20 winners were 75% female and there were a large amount of accounting professionals represented in the winner’s circle. This impressed me because it means there are a lot of young professional women making a difference in industry and community, oh and they are finally letting accountants out of the office.

It is an honor to be a Twenty Under 40 Award winner. I am blown away by the caliber of nominations and I can’t believe I was one of the top twenty. It is nice to see there are so many passionate and hardworking young professionals in our community making Reno/Sparks a better place. Their dedication is contagious and it is giving momentum to culture shifts in the work place. On a personal note, it feels amazing to be recognized for my community service and my professional development. This has been one of my best years professionally and this is the icing on the cake.

I’m grateful that I’ve had so many people support me and encourage me to be a part of the community and to take on leadership roles. My parents have been the best role models! They have encouraged me along every step of the way. I have been blessed to have strong family leaders. My grandparents and parents always lead by example and have taught me the gift of hard work and dedication. They encouraged me to work hard, be entrepreneurial and have passion for whatever cause I dedicate my time. They instilled values and life lessons that have helped me be successful as a young professional.

Team Nugget! #NuggLife

I’ve also been blessed to have outstanding bosses and work on great teams. Throughout my career I’ve had coworkers that have been more like family than just coworkers. They have encouraged me along the way. I was lucky my parents, boyfriend, and coworkers were at the awards ceremony to help me celebrate being a Twenty Under 40 Award winner. I felt incredibly honored to have my Dad as my escort and Joss Stone’s song “Free Me” as my power anthem as I walked to the stage. Seeing my family and friends sitting at table number one meant the world to me. I would have never received the award if it wasn’t for their support and encouragement.

I look forward to attending the Twenty Under 40 awards next year as a member of the class of 2015.

For more information about the Reno Tahoe Young Professionals Network please visit http://renotahoeypn.com/