Running head: BUILDING A BALANCED BUDGET

Building a Balanced Budget

Tanya Pattullo
MacEwan University
November 14, 2014
AGAD 225 - Assignment #3
Instructor: Gail Barrington-Moss

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I have decided to build a balanced budget for a Ukrainian Dance Competition Festival for
this assignment. This will be a 3 day event (Friday, Saturday and Sunday) in May of 2015.
Nickels et al. (2010) describe the term budget as a financial plan that sets forth managements
expectations, and, on the basis of those expectations, allocates the use of specific resources
throughout the firm (p. 515). With this definition in mind, I can understand the need for an arts
and culture organization to have carefully planned budgets. There is a large responsibility when
developing a budget. Waddell et al. (2007) refer to a common mistake made by organizations to
cut the advertising budget. This can have a devastating impact on a show, often resulting in lower
tickets sales. It is suggested that negotiation to lower the fees of the artist, or venue would be a
better solution (p. 189). Byrnes (2009) explains how an arts organization can get trapped by
trying to adjust their projected revenue to match their expenses to obtain a balanced budget (p.
288). This can be a dangerous practice and can lead to financial disaster. Planning and organizing
is essential to planning events, or in this case a dance festival. The time that it takes for such
planning cannot be underestimated.
The artists for this festival would be the entrants of the festival who would register in
advance. They would provide entertainment during the festival as well as a showcase of winners
at the end of the festival. These participants will be the main source of revenue for the festival.
Offering professional workshops for the dancers will encourage dance organizations to attend
and will offer a secondary source of revenue. These workshops can be held in the venues
ancillary space thus able to run concurrently with the festival on the main stage. Fees would be
collected from the participants, tickets would be sold to attending audiences and we would seek
out corporate sponsorship for the 3 day event.

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EARNED REVENUE
1. Festival entry fees: collected from dance organizations that register to participate in the
festival
2. Workshop registration: additional workshops hosted during the weekend will attract
groups
3. Box office sales: ticket sales from the competition and from the final showcase concert
4. Program advertising sales: printed programs will have space available for advertisers
5. Souvenir sales: T-shirts, key chains, posters and other swag will be available for sale to
participants and audience members
6. Concession sales: food and beverage options will be available during the event
7. 50/50 raffle: tickets sold throughout the weekend
8. Lobby booth rentals: vendors who sell dance wear, or accessories will pay to have a
booth set up in the lobby of the theatre for the weekend
CONTRIBUTED REVENUE
1. Corporate sponsorship: opportunities for corporate and government sponsorship will be
available with logo recognition on all advertising and promotional material
2. Individual donations: dance enthusiasts and supporters of cultural events will be a great
source of income for our festival
3. In-kind goods & services: local businesses that can offer in-kind goods or services in
exchange for sponsorship opportunities will help keep costs down
4. Grants and subsidies: we will apply for all available grants and subsidies - early
application will be necessary
FIXED EXPENSES
1.
2.
3.
4.
5.
6.

Facility rental fees: this will be the price set by the facility
Adjudicator fees: contracted price for 3-4 adjudicators
Instructor fees: for our workshop attendees
Staff wages: box office, administrative and technical staff
Licenses & insurance: necessary expenses that have set prices
Financial obligations: bank fees and interest charges

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VARIABLE EXPENSES
1. Advertising: this will be a key component, working on media sponsorship will help offset
the cost of advertising
2. Marketing: having a marketing plan early in the planning stages will provide a template
to follow as the months go by
3. Promotion: good media relations and social media strategies will be essential to get the
word out about our festival
4. Hospitality: it will be important to be budget conscious and book accommodations early
to secure good rates
5. Awards: planning ahead and having early registration will help develop the awards
system and secure early pricing discounts
6. Concession & Bar: the revenue from the concession and bar will be hard to estimate
making sure that there is suitable product will be important
7. Administration: it will be very important not to underestimate the administrative duties
and the staff that it will take to produce and organize the festival
I think the most attention should be given to advertising and marketing. It would be easy to
go over budget when booking advertising space and building required signage for the event. It is
also important not to cut from the advertising and marketing portion of the budget if things are
over budget. It is one area that will have to remain constant if possible. Another area that will
have to be monitored closely is the Concession and Bar inventory. There will have to be adequate
inventory, but not so much that there is left over inventory at the end of the event. Hospitality
including decor and front of house operations can quickly use up the budget, so will have to be
watched closely.
A challenge that I encountered when preparing the budget was trying to think of everything
that would be included in hosting a 3 day competition festival. I didnt want to forget something
important in the budget. I can see that when an organization is coming up with a budget, it is

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important to look at it with the entire staff so that there are constantly fresh eyes on it,
brainstorming ideas and thinking of all aspects of putting the festival. Coming up with different
ways other than just the entrance fees to earn revenue was another challenge I faced. The
business of putting on a festival cannot be over-shadowed by the desire to host such an event. I
think arts organizations, particularly those run by volunteers are not realistic when planning their
event and as a result, end up without a balanced budget. Theyre excitement in hosting the event
and trying to make it a success can get in the way of realistic decision making. I also feel that in
real world situations, it is hard to count on grants and subsidies. The amount can change from
year to year, so to depend on them, and plan the budget around them could prove dangerous. I
find the process of developing a budget a very interesting and complex process. It is vital for an
arts organization to closely monitor budgets and come up with new and creative ways to generate
revenue for the programming or for the venue.

References

MacEwan University. (2012). AGAD 225: Performing arts management course pack.
Nickels, W.G., McHugh, J.M., McHugh, S.M., Cossa, R, Sproule, B (2010). Understanding
Canadian business. (7th ed.). Whitby, ON: McGraw-Hill Ryerson.
Waddell, R.D., Barnet, R., Berry, J. (2007). The business of concert promotion and touring.
Toronto, ON: Random House Canada.
Byrnes, W.J. (2009). Management and the arts. (4th ed). Burlington, MA: Focal Press.