If you think that transportation and lodging for an annual meeting comprise the bulk of your meeting budget, consider how Robert C. Brenner, MSEE, MSSM, author of a series of business buyer’s guides, looks at cost. By figuring out the cost-benefit analysis formula to determine the actual costs for every meeting plan, Brenner comes up with total cost in real terms. With that in hand, you can see where the bulk of your meeting costs really are.
First, estimate the salary cost for each person who attends and enter the total into your computer spreadsheet. Now add the cost of fringe benefits: vacation pay, sick leave, dental and vision care, group health plans, retirement/pension plans, etc. (Don’t forget the hidden costs like payroll taxes and FICA.) One rule of thumb assumes that your business has required deductions and fringe benefits that add about 38 percent to each person’s hourly rate to form the total cost per employee. Multiply the salary costs per hour by this percentage increase.
Next, address overhead costs. This includes time spent discussing strategy, writing and designing the presentation, support contributed by others, creating visuals, and adjusting work schedules and “invisible” expenses incurred by attendees (e.g., interruptions away from another project). Two hours of prep time for a one-hour meeting, in Brenner’s experience, yields a planning overhead of 200 percent. If every person attending the meeting takes two hours to prepare, multiply the hourly pay and benefits figure by two to determine the preparation cost. If only one person must prepare, allot a major percentage for this person and a minor portion (say 5 percent) for the others.
Third, consider the overhead issues related directly to meeting: transportation, equipment used, food and beverages, paper, transparencies and other materials used at the meeting. One vehicle driven 30 miles, one hour of travel, five cups of coffee, 25 sheets of inkjet printer paper and six overhead transparencies add up!
To estimate the financial benefit, assign a value to each goal discussed. If the meeting is to promote sales, did you indeed realize increased sales? How much must you increase sales to make the meeting worthwhile? A sale of $325 after a meeting that cost $424.08 is hardly worth the effort – unless you also gained add-on sales that let you amortize the meeting costs over more sales events.