Calculating the number of tickets you need sold to break even for a paid event is a helpful indicator of how much promotional push you need at a given point in time.
Meet Pea-casso, he’s an organiser of a monthly meetup for creatives and charges $30 for his event.
Here’s how he would calculate his break-even point:
Calculate fixed costs for the event
Fixed costs are defined by cost items that will remain consistent throughout the course of an event.
Pea-casso’s fixed costs for the meetup are as follows:
Venue rental $300
AV equipment $150
Speaker gifts $200
Calculate variable costs per attendee
Variable costs consists of cost items that vary or are dependent on the number of attendees registered for an event. This could include the amount of food you’ll cater, the number of shirts you’ll order, or the number of goodie bags you’ll prepare.
Pea-casso’s variable costs for the meetup are as follows:
Food and beverage $10 per person
Goodie bags $5 per person
Total $15 per person
Calculate each attendee’s contribution after accounting for variable costs
Contribution here is defined as how much each ticket sold will contribute to covering for an event’s fixed costs. It is calculated as such: Cost per ticket – Variable cost per attendee
Pea-casso charges $30 for his event, hence the contribution per attendee for the meetup is as follows:
Cost per ticket – Variable cost per attendee
= $30 – $15
Calculate the number of tickets that needs to be sold to break even
This is done by dividing an event’s fixed costs by each attendee’s contribution.
Fixed costs / Contribution per attendee
= $975 / $15
Pea-casso will need to sell 65 tickets for his meetup to break-even. As the event is currently at 20 ticket sales, he’ll need to look into ways to promote the sale of 45 more tickets. It could mean the need for more event publicity perhaps through social media, to provide more information to clearly demonstrate the value of attending the meetup, or looking for in-kind sponsors to either bring costs down or provide additional perks to attract attendees.
In sum, having the break-even number of tickets in mind and comparing it against current ticket sales can help to inform future promotional efforts.
Alternatively, if you have a pre-determined estimate on the number of attendees you’re expecting for your event, you could reverse-engineer the above calculations to calculate how much you’ll need to charge attendees for tickets to break-even. This can be done as follows:
Ticket charge = (Fixed costs / Number of tickets) + Variable cost per attendee
Learn to balance out your event’s budget with enough revenue to meet your costs. Knowing your break-even point in terms of number of tickets you’ll need to sell is but one way you can do this. Consider other sources of revenue beyond ticket sales (particularly if your event is free) and keep costs low through volunteers and in-kind sponsors so that you may keep your event at a reasonable price point and not fret over setting an unrealistic goal for ticket sales.
Learn more about how you can make more and save more for your indie event at Backstage Pass, a community event for organisers! Get limited early bird tickets here.
Top Image Credit: Diego Salcido