Sharing my Spreadsheet For Calculating Ticket Prices
One of the challenging things about running community events is how to manage the finances. If you’re hosting an event with an unknown number of guests, you will usually have a significant outlay to secure a venue, and then you have to hope and pray you sell enough tickets to break even. Charge too much, and you’ll discourage people from coming. Charge too little, and it could cost you a lot of money.
In this short article I’ll explain how I decide what ticket price to charge, and I’ll share my spreadsheet which helps me model the likely expenses and income.
To my mind there are two main approaches:
- Run it like a family gathering: everyone comes along and then splits the tab at the end, once all expenses are known.
- Run it like a business, charge a fixed ticket price with sufficient margin to cover the risk that attendance is low and you can’t cover your costs.
The “family approach” is fine for small events (<15 people), but it gets more complicated as the event grows in size, and chasing people up to actually complete their payment is a huge pain in the ass. So I prefer the “business” approach, it’s more straightforward to administer, but the challenge here is to set a price that is high enough to cover expenses but not so high that it makes the event unaffordable for participants.
Over the years I’ve developed a budgeting methodology that helps me choose the right ticket price. Here’s my appraoch:
- The first principle: make conservative estimates and enjoy a happy surprise at the end (e.g. assume that flights will be unexpectedly expensive, add a 10% contingency buffer, etc)
- make an accurate model of the main income & expense categories, understanding what are the main cost drivers (e.g. what happens if we increase our per-person-per-day food cost by $5?)
- distinguish categories of costs; food costs scale linearly with the number of guests, venue costs are mostly fixed regardless of the group size, and some are a weird hybrid of the two
- model a range of scenarios from low to high turnout and calculate the expected total costs for each scenario
- calculate the breakeven point for each scenario: how much would each participant have to pay to cover those costs
- calculate the total income for each scenario, assuming different ticket prices
- choose a final ticket price that is affordable to participants while making an acceptable maximum downside for you
Get The Spreadsheet
This is much easier to understand with a video explanation. You can get your copy of the spreadsheet here, and watch this 15 minute video with me and Ioan Mitrea explaining how the formulas work in detail.