I wanted to to publish this blog post for a while now, but time's been running fast and now it's already three months since Ruby on Ice 2018 took place. This isn't a recap – if you want to get a few impressions, just scroll through the #rubyonice2018 tweets.
This post should give you a quick recap of our conference budget planning for Ruby on Ice 2018 and should help you as a conference organiser to put your own budget in perspective and give some transparency to you as a conference attendee. Note that this might not apply to large business conferences, but it worked for us as a community-conference.
And before I dive in, a big thank you to Dajana, Bodo and Florian who helped us immensely in the run up to the conference by giving insight & feedback. <3
Retrospective
We started planning for Ruby on Ice roughly one year ago - March / April 2017 with a core team of three people. We had the backing of the Berlin-based Non-Profit Ruby Berlin e.V. that enabled us to have a legal entity for running the conference, selling tickets + sponsorships.
A huge part of our planning time went into a huge Google Docs budget sheet. We adapted it from @fannivuniconnu's version back from the eurucamp days and this was our guideline for all decisions.
Our goal was to organise a community-run conference in the south of Germany against the backdrop of the Alps – inviting Rubyists from all over the world but especially appealing to people from southern Germany, Austria and Switzerland who didn't want to travel to Berlin all the time.
Ticket sales vs. Sponsoring
This was the first big head scratcher. Ruby Berlin e.V. is a Non-Profit (in German: » ein Gemeinnütziger Verein«). Sounds good, no? So at least we don't have to be profitable. Well. But we also should not operate at a 100% loss, as we want to keep the Verein healthy.
I was involved in a lot of community-run conferences and was used to ticket prices somewhere between 60-100€ for a two day event. Now – since I moved to Munich, I already expected it to be a bit more pricy, but the longer we shuffled around numbers the more we realised that we would have to raise the ticket prices to organise a conference with a balanced budget.
Speaking of balance – most conferences rely on two revenue streams: Ticket sales and Sponsoring deals. The first trap we probably stepped into was assuming that we could smoothly fill all the missing budget parts with sponsoring money.
Well. We couldn't.
On sponsoring »money«
It's easy to think of Sponsoring »money« as a regular part of your budget or as some kind of benevolent donations. Except they're not. You sell part of your stage and attention to a sponsor and you get paid for goods and services. Even though we're a Non-profit we have to pay taxes for those payments.
A good baseline we adapted from grooming our budget with Florian was:
Try to cover the base line of your cost (food, venue) with regular ticket sales and use the sponsoring money to afford nice things on top of that.
In the end we still evened out at a rough 50:50 ratio:
Really helpful visualisation of what a 50:50 distribution looks like
We priced the sponsoring packages pretty high (2.000€, 5.000€, 7.500€ and one free style) but in the end we where happy the way we calculated them. Setting the prices lower might have attracted a few more sponsors but would have also increased the workload we had in managing the sponsoring agreements. Our sponsoring packages came with free 2 / 3 tickets for the sponsoring companies. This also adds up to the fixed budget part I'm getting to in the next section.
What helped us in the end: We set up pretty pessimistic forecasts for sponsoring packages and always calculated with a 20% buffer so we could afford to negotiate with sponsors. So the number we calculated our budget with was always a bit more pessimistic:
Screenshot of our Google Docs sheet showing the 20% security margin formula
That being said: We managed to get really amazing companies to support our conference and were pretty happy to have them aboard. (And: No – this compliment is not part of a sponsoring deal).
Something we weren't prepared for: Some sponsors will make a netting for their investment in you. Means, they calculate their sponsoring cost per attendee. This is especially hard to reason with if you are a smaller conference. This is totally reasonable from a business perspective, but be prepared to sell your conference well.
Ticket sale timeline
To kickstart ticket sales we started with an early bird price of 220€ and
progressed to a regular ticket price of 330€ (incl. taxes). We opened up our
ticket sale in October 2017 with our early bird sale and sold our last ticket on
Friday evening when the conference had already started:
Screenshot of our Tito ticket sale timeline
The first few hours of opening the ticket sale felt great. Look at those engagement numbers! The second bump at the beginning of November was the end of our early bird sale. And this brings us to our next ticket pricing lesson: Try to not lose money on early bird tickets. This may sound like a give away but it's actually really tough to spot if you do not keep track of one important data point: cost per attendee. We nearly missed that point and in hindsight we should have raised the early bird price and lowered the regular ticket price.
Also: No matter how long you run the early bird sale: Most people will probably buy their ticket in the eleventh hour.
Cost distribution
As I mentioned earlier: Keep track of your cost per attendee number. And here's why: Running a conference means that you will have both flexible and fixed budget items. Flexible items are things that will scale nice with the number of attendees. Our outdoor sledding activity is a good example for one of those if nobody wants to go, then we don't have to pay anything items. So – what are fixed costs? Well, have a look at those three big hunks of cake:
The Venue is a perfect example for a fixed cost item. No matter if we sell 100 tickets or no ticket at all: The venue will cost us the same. Catering and Logistics + Speaker / Staff travel & accommodation are mixed items with a huge fixed part.
We wanted to take care of the Hotel accommodation for both our speakers as well as our helpers. The same rule will apply here: No matter if we sell 100 tickets or no ticket at all. We wanted to offer diversity grants and got support from the amazing Diversity Tickets initiative of the Travis foundation. The only "downside" to this (and you probably saw this already coming): Offering diversity tickets adds to your fixed budget. We tried to re-finance them via Supporter Tickets with a 50% or 100% added charge but we didn't make a good job in advertising / selling those tickets.
Our fixed budget part was a close call, but we need to improve on that in the next year. Underestimating that part can actually ruin your budget completely:
If you underestimate your fixed budget
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you need to sell a boat load of tickets to get out of the red
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you rely on sponsoring money to backfill that gap
If you underestimate the cost per attendee
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best case: You even out and stay at 0 revenue even you sell thousands of tickets
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worst case: You lose money by selling tickets. Yes, this is a thing.
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same as above: You rely on sponsoring money
Takeaways
To sum up our budget-learnings:
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Keep an eye on cost per attendee
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Double check your Early Bird calculation
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Monitor your fixed budget items
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Make diversity tickets part of your budget planning
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Be prepared to negotiate with sponsors
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Send out regular newsletters. Repetition is key. Repetition is key