\u00a0<\/p>\n
Your inefficiencies are costing you. And you\u2019d be surprised by how much.<\/p>\n
We\u2019re going to help you identify the biggest blind spots that event production companies like yours have. But understanding the problem is only half the battle. So, we\u2019ll also show you how to fix them with a single tool, allowing you to capitalize on the right opportunities, maximize your dollars, and scale your business.<\/p>\n
\u00a0<\/p>\n
Table of Contents <\/span><\/h2>\nCategorizing Your Costs<\/strong><\/h4>\nOpportunity Costs<\/span><\/a><\/span>
Expenses<\/span><\/a><\/span>
Liability Costs<\/span><\/a><\/span> <\/p>\nHidden Opportunity Costs: Lost Revenue and Missed Billing Opportunities<\/h4>\n
Hidden cost #1: Lost revenue<\/span><\/a><\/span>
Hidden cost #2: Missed billing opportunities<\/span><\/a><\/span>Hidden Expenses: Costing You More Than You Realize\u00a0<\/h4>\n
Hidden cost #3: Rounding<\/span><\/a><\/span>
Hidden cost #4: Overtime\u00a0<\/span><\/a><\/span>
Hidden cost #5: Workers\u2019 compensation<\/a>\u00a0<\/span>
Hidden cost #6: Software applications\u00a0<\/span><\/a><\/span>
Hidden cost #7: Travel overages<\/a>\u00a0<\/span>
Hidden cost #8: Additional labor coordinators<\/span><\/a><\/span>
Hidden cost #9: Manual payroll and billing processes<\/span><\/a><\/span>
Hidden cost #10: Logistics costs and mishaps<\/span><\/a><\/span><\/p>\nHidden Liability Costs: The Risk of Non-Compliance and Failure to Centralize Your Talent Pool\u00a0<\/span><\/h4>\nHidden cost #11: Penalties for misclassifying<\/span><\/a><\/span>
Hidden cost #12: Penalties and wage claims for not correctly paying overtime<\/a> <\/span>
Hidden cost #13: Not maintaining ACA compliance\u00a0<\/span><\/a><\/span>
Hidden cost #14: Not complying with state and federal laws and tax filings<\/a>\u00a0<\/span>
Hidden cost #15: Not housing your talent pool in a centralized place<\/span><\/a><\/span><\/p>\n\u00a0<\/p>\n
One of the biggest shortfalls of the live events industry is how manual the processes are. You probably know someone who has a famous whiteboard where they keep track of their events, someone who still uses paper time sheets, or someone in the 40% of live event companies that still use spreadsheets to manage their projects.<\/a><\/span><\/p>\nWhen producing live events, time is money and (stating the obvious but necessary) money is money. Spending hours tracking down vendors, keeping up with multiple spreadsheets, or manually entering data is all time that could have been spent on other revenue-generating tasks. Missed billing opportunities, money spent on a multitude of tools when none seem to be quite what you need them to be, and exorbitant travel and logistics costs are all examples of opportunities to capture that money straight to your bottom line.<\/p>\n
With an all-in-one solution<\/a><\/span>, you can reduce that wasted time and money by automating manual processes and grunt work. This gives you more time to focus on strategically growing your business instead of constantly worrying about the workflow around your live events.<\/p>\nBecause of their ability to increase efficiency, all-in-one solutions also help you chip away at cost of goods sold, leading to a stronger bottom line and higher valuation. Implementing such a system should be at the top of the list for event company founders and owners \u2014 especially those looking to exit in the near future.<\/p>\n
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LASSO founder, Clay Sifford, on the compounding effects of hidden costs<\/em><\/p>\n In this article, we look at:\u00a0<\/h3>\n\n- The different types of costs associated with running an event production business, and<\/li>\n
- How an all-in-one platform can help you save both soft costs (time) and hard costs (good ol\u2019 cash)<\/li>\n<\/ol>\n
We can categorize all our costs down into three buckets: opportunity costs, expenses, and liability costs<\/span>.<\/span><\/p>\nCategorizing Your Costs<\/h2>\nOpportunity Costs<\/h3>\n
Opportunity costs are the potential benefits forgone in favor of other options. They\u2019re not always tangible and can often be difficult to quantify.<\/p>\n
\u21aa Example: <\/span>Your crewing, travel, and payroll processes all live in separate systems. You know it would be a smart move to consolidate them \u2014 find a solution that contained all of those tools in one. But it\u2019s not cheap, and your process is working well enough.<\/em><\/p>\nNow, let\u2019s say you receive an RFP for a project that fits squarely within your company\u2019s wheelhouse. You\u2019ve done other events like this one before, but this one\u2019s bigger and more complex in every way. Because you haven\u2019t invested in the tools and resources you needed to scale and support an event of this nature, you either have to turn down the business and lose the revenue or choose to take a major hit on your margin. Neither are ideal outcomes.<\/em><\/p>\nIt\u2019s critical to consider the value of the alternatives you\u2019re not choosing to make the best decision for your business and its growth.<\/p>\n
Expenses<\/h3>\n
Expenses include any money spent on goods or services used by the company.<\/p>\n
\u21aa Examples:<\/span> Labor, staff salaries, logistics, travel, equipment, rent, sales and marketing spend, etc.<\/em><\/span><\/p>\nIt\u2019s important to track all expenses so that you can make informed decisions about how best to allocate resources within your organization.<\/p>\n
Liability Costs<\/h3>\n
Liability costs relate to the areas of your business where you are exposed and at risk to pay penalties, fines, legal fees, etc.<\/p>\n
\u21aa <\/span>Examples:<\/span> <\/span>Your company works in a state that imposes penalties for missed meal breaks, your lack of safety initiatives exposes you to workers comp claims, or the dreaded misclassification audit imposes significant penalties for not paying your employees\u2019 taxes as their employer.<\/em><\/span><\/p>\nNow that we\u2019ve set the stage for your business\u2019s costs into these three buckets, let\u2019s start pulling back the curtain on what\u2019s really costing you.<\/span><\/p>\n\u00a0<\/p>\n
Hidden Opportunity Costs: Lost Revenue and Missed Billing Opportunities<\/span><\/h2>\nThe two main types of opportunity costs for event companies are lost revenue and missed billing opportunities.<\/p>\n
Lost revenue <\/span>\u2014 refers to potential business that was not obtained because an event company lacked the necessary resources to handle it.<\/p>\nMissed billing <\/span>\u2014 refers to the services rendered that weren\u2019t billed because they were overlooked, or not documented or tracked effectively making it hard to go back to the client. This could also include when crew members that don\u2019t show, making them unbillable.<\/p>\nHidden cost #1: Lost revenue<\/h3>\n
Many event companies can barely support the opportunities they have and are forced to say no to new business. Or, they take new business at smaller margins because they don\u2019t have the resources or tools to help them execute efficiently.<\/span><\/p>\nDoes this sound familiar?<\/span><\/p>\nResources are scarce and without good tools or talent, it\u2019s hard to execute and meet the demand. With the right tools and access to a solid talent pool, you can execute on more events without carrying the overhead to do so.<\/span><\/p>\nThink about how much business you have to turn down a year. How much does that cost you? In other words, how much more could you be making?<\/span><\/p>\nThe real-time data and insights delivered by an all-in-one platform can help you pinpoint and capitalize on these opportunities. By streamlining workforce management<\/a><\/span>, project management<\/a>,<\/span> and inventory management<\/a><\/span> under one tool, you can understand your true capacity for growth and make smarter decisions to increase that capacity.<\/span><\/p>\nYou might like: How to Build a Revenue Engine<\/a><\/span> <\/span><\/p>\nHidden cost #2: Missed billing opportunities<\/h3>\n
So often, changes to show flow, rehearsal needs, and gear requirements occur both before and during the show.<\/p>\n
Because of the rushed nature of events, and because we seek to please our clients above all else, change orders are often not captured and billed.<\/p>\n
Without an all-in-one tool to easily log the full cost of these ad hoc updates and upgrades on the fly, you either:<\/p>\n
\n- \n
\n- forget to document and bill the change order altogether, or<\/li>\n
- let it slide because the time and effort to document and bill the change order after the fact isn\u2019t worth the trouble.<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n
Are you eating small costs that add up to big costs? Now think about that year over year.<\/span><\/p>\nThere\u2019s another huge benefit that an all-in-one platform can help you leverage. Modern event management platforms have built-in solutions for project management and team collaboration<\/a><\/span> with your client. No more foregoing revenue because \u201cit\u2019s too late to go back to the client\u201d.<\/p>\nUpdates to the original scope of an event can be logged and flagged for follow up, ensuring it makes its way to the final project invoice.<\/span><\/p>\n![\"alt="](\"https:\/\/7458551.fs1.hubspotusercontent-na1.net\/hubfs\/7458551\/Optimized-shovelmoney.png\")
<\/p>\n
Hidden Expenses: Costing You More Than You Realize<\/h2>\n
Expenses are part of doing business. The tricky part is identifying the hidden expenses are that you can\u2019t see that compound, resulting in huge, unforeseen costs.<\/p>\n
This is especially true in the event industry where the sheer volume of labor, travel, and complex pay rules can easily obscure expenses you hadn\u2019t accounted for.<\/p>\n
For example, chances are high you\u2019re overpaying on your workers\u2019 comp. Often, crew don\u2019t work their full minimums, but unless you have reporting around that, you\u2019re most likely overpaying. And let\u2019s face it, workers comp in our industry isn\u2019t cheap.<\/p>\n
What hidden expenses do you have? Well, if you knew, they wouldn\u2019t be hidden, would they?<\/p>\n
So instead, we\u2019re going to shine the spotlight on them for you.<\/p>\n
Hidden cost #3: Rounding<\/h3>\n
Without automated time capture systems in place, many companies resort to rounding time. Employees may be paid for more hours than they\u2019ve actually worked, resulting in inaccurate wages and additional payroll costs.<\/p>\n
\u21aa Example, In-House Talent:<\/span> Let\u2019s consider a scenario where you have a five-day job and require 20 techs, each with an hourly rate of $40.<\/span><\/p>\nLet\u2019s say the job ends each day at 7:12 PM. If rounding, your employees will \u201cclock out\u201d at either 7:30 PM or 8:00 PM.<\/span><\/p>\nIf you round until 7:30 PM, you will pay an additional 18 minutes for each of the 20 employees for all five days, which amounts to $1,200 of time not actually worked.<\/span><\/p>\nNow let\u2019s say you round up to the next hour. So, if the job ended at 7:12 PM and you round up to 8:00 PM, then you will pay over $3,200 for time not actually worked.<\/span><\/p>\nThis doesn\u2019t even take into account what you owe for workers\u2019 comp on this rounded time \u2014 time you weren\u2019t actually exposed to any risk. <\/span>(Skip to Hidden cost #5: Workers\u2019 compensation for more.)<\/a><\/span><\/span><\/p>\n\u21aa <\/span>Example, Outsourced Talent:<\/span> Let\u2019s consider a scenario where you have a five-day job and require 20 techs. You are being charged $40 per hour for straight time.<\/em><\/p>\nLet\u2019s say the job ends each day at 7:12 PM. If rounding, the labor company will charge you until either 7:30 PM or (most often) 8:00 PM.<\/em><\/p>\nIf you are being charged until 7:30 PM, you will pay an additional 18 minutes for each of the 20 workers, which amounts to $1,200 for five days of work.<\/em><\/p>\nNow let\u2019s say the company rounds up to the next hour, which is a common practice. So, if the job ended at 7:12 PM and they round up to 8:00 PM, then you will pay over $3,200 for those five days of work.<\/em><\/p>\nReminder: <\/span>Both of these scenarios cover just one show. How many shows do you do each year?<\/p>\nAgain, when you outsource labor to an agency, rounding forces you pay for time that wasn\u2019t worked, and delivers no extra benefits to your company or event.<\/p>\n
Imagine if that didn\u2019t have to be the case. Just think of the money you could save on every worker for every event.<\/p>\n
Hidden cost #4: Overtime<\/h3>\n
Without a tool that can both schedule crew and track their time, you have no way of seeing who is approaching overtime. This makes it very difficult to:<\/p>\n
\n- \n
\n- Predict overtime expenses<\/em><\/strong><\/li>\n
- Manage overtime hours in the field with your client and your crew<\/em><\/strong><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n
Let\u2019s expand on our rounding scenario above and assume your hourly cost for overtime is $60 per hour.<\/p>\n
If those same 20 techs already worked more than 10 hours that day, and your labor company rounds to the half hour, you will pay an additional $1,800 for time that wasn\u2019t worked.<\/p>\n
And if your labor company rounds to the next hour, you will overpay by $4,800 for no extra work or benefit.<\/p>\n
It adds up fast!<\/p>\n
![\"updated](\"https:\/\/7458551.fs1.hubspotusercontent-na1.net\/hubfs\/7458551\/Imported_Blog_Media\/updated%20graph.001.png\")
\u00a0Is your crewing workflow bleeding your budget dry?<\/a><\/span><\/p>\n\u00a0<\/p>\n
Hidden cost #5: Workers\u2019 compensation<\/h3>\n
Workers\u2019 compensation insurance covers injuries to crew while on the job. It is calculated as a percentage of payroll. And it\u2019s done this way because payroll is an indicator of the crews\u2019 level of risk (i.e., hours on the job.)<\/p>\n
In the live events business, most positions have minimums. For example, crew might be asked to work a show where they are only needed for 3 hours, to make it worth driving in, that position might guarantee 5 hours of pay.<\/p>\n
Most companies pay workers comp on the entire 5 hours instead of the actual exposure, which is 3 hours. Reporting event hours worked vs. hours paid can make a big difference in calculating these actual costs that add up very quickly.<\/p>\n
\u270d\ufe0f Pro tip: <\/span>Make sure you\u2019re coded correctly. Incorrect coding is another massive area of overspending unnecessarily. (The code for most event crew in most states is 9154. Be sure you work with your agent to confirm and correct if necessary.)<\/p>\nHidden cost #6: Software applications<\/h3>\n
Event companies typically have a tool for every step in the workflow \u2014 and a cost to license each of them. Case in point: in a 2022 survey, we found that 25% of event companies use 4+ tools for project management<\/a><\/span> purposes alone.<\/p>\nTool consolidation \u2014 finding one piece of software that can be adopted by multiple departments for many functions \u2014 is not only an enormous opportunity for cost savings, but also a more effective way to distribute information company-wide. Said differently, a single source of truth can prevent costly confusion, receptive work, and delays.<\/p>\n
Hidden cost #7: Travel overages<\/h3>\n
Why travel a tech to an event when there are hundreds of perfectly good techs already living in that market? Of course, you may not know those hundreds, but there are easy ways to get connected to local event talent<\/a><\/span>. And if you do still need to travel your lead in, why pay top dollar on travel expenses?<\/p>\nThe best all-in-one event production tools offer the following three features to keep travel costs low<\/a><\/span>:<\/p>\n\n- The ability to see the true cost of travel before<\/em> you book that person.<\/strong> Often there are major variances. For example, it could be $500 less expensive to travel crew from Atlanta than Orlando.\n<\/li>\n
- Negotiated travel rates and booking, in-platform.<\/strong> Not only should you be able to pay group rates for your crew, you should be able to book and communicate trip details to your travelers in bulk<\/a><\/span>.<\/span>\n<\/li>\n
- A talent pool of local labor and top techs in all the major markets.<\/strong> It should be easy to find quality crew<\/a><\/span>, with competitive rates and top-notch skills, who are already in the city where you\u2019re having your event.<\/li>\n<\/ul>\n
Calculate how much you\u2019re overspending on crew travel<\/a><\/span>\u00a0<\/span><\/span><\/p>\nHidden cost #8: Additional labor coordinators<\/span><\/h3>\nMany times, event companies default to hiring more staff to offset the inefficiencies in their processes or their lack of automation. They think the only way to grow is to throw more people at the problem. But the overhead cost of this thinking is enormous.<\/p>\n
The right people plus the right software to automate manual, repetitive event tasks is a much more efficient approach. It also allows your team to be more operational and strategic rather than administrative and tactical. For instance, instead of constantly emailing and calling to schedule crew, your team can reallocate that time to recruiting, training, and engaging with your crew, which is far more valuable and yields a much higher return.<\/p>\n
You might like: How Dupree Security Saves $60k a Year in Labor Coordination<\/a><\/span><\/span><\/p>\nHidden cost #9: Manual payroll and billing processes<\/span><\/h3>\nDo you have a clunky, labor-intensive workflow to process payroll? Have you entertained the idea of hiring additional accountants or back office employees so you can invoice faster for cash flow?<\/p>\n
Typically, this is because you lack the following:<\/p>\n
\n- \n
\n- A tool that tracks hours worked in real time and integrates with payroll<\/li>\n
- A payroll partner that understands the events industry and all of its nuances<\/li>\n
- A way to automate the calculation of complicated pay rules<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n
If you can\u2019t track time fast, you can\u2019t invoice fast, which means you can\u2019t get paid fast, which negatively impacts cash flow.<\/p>\n
When evaluating all-in-one event production tools, look for one that enables the three points listed above to automate payroll, expedite invoicing, and increase cash flow.<\/p>\n
Related: 4 Signs It\u2019s Time to Update Your Event Payroll Software\u00a0<\/a><\/span><\/p>\nHidden cost #10: Logistics costs and mishaps<\/h3>\n
Late gear deliveries to an event site wastes precious minutes \u2014 minutes you are paying for your crew to stand around and wait. Imagine you have 30 crew members with nothing to do for two hours because the truck is late. 30 crew x 2 hours x $40\/hour = $2,400 \u2014 just for that one late truck. And it\u2019s safe to assume this happens throughout the year.<\/p>\n
Individual event companies also don\u2019t have the buying power to command competitive shipping rates. They\u2019re often at the mercy of big-name transportation companies that are unwilling to negotiate on a case-by-case basis.<\/p>\n
Event companies should be able to take advantage of competitive trucking rates, know the true cost of late deliveries, and have real-time insight into actual delivery times. This is something the top event production platforms enable. Tools with booking and negotiated transportation rates built-in are a huge plus and gives your team the peace and confidence they deserve in the field.<\/p>\n
\u00a0<\/p>\n
Hidden Liability Costs: The Risk of Non-Compliance and Failure to Centralize Your Talent Pool<\/span><\/h2>\nMinimizing the risks associated with your event company is paramount. There are two areas event company owners need to familiarize themselves with here: compliance and talent documentation.<\/span><\/p>\nHidden cost #11: Penalties for misclassifying<\/h3>\n
If audited for employee misclassification<\/a><\/span> (categorizing crew as independent contractors rather than employees), the fines are steep \u2014 enough to put your business under. Event company owners need to make sure they\u2019re following the correct protocols and regulations for hiring crew members, as well as ensuring everyone on staff is properly onboarded with the correct tax documents, licenses, and insurance.<\/p>\nIt\u2019s no longer OK to say, \u201cThat\u2019s how our industry does it,\u201d because it\u2019s not. Unlike a decade ago, most event companies are now issuing W-2s instead of 1099s.<\/p>\n
To be clear, just because someone has an LLC and carries their own insurance does not qualify them to be a 1099 in the eyes of state or federal laws.<\/p>\n
Hidden cost #12: Penalties and wage claims for not correctly paying overtime <\/span><\/h3>\n
Opportunity Costs<\/span><\/a><\/span> Hidden cost #1: Lost revenue<\/span><\/a><\/span> Hidden cost #3: Rounding<\/span><\/a><\/span> Hidden cost #11: Penalties for misclassifying<\/span><\/a><\/span> \u00a0<\/p>\n One of the biggest shortfalls of the live events industry is how manual the processes are. You probably know someone who has a famous whiteboard where they keep track of their events, someone who still uses paper time sheets, or someone in the 40% of live event companies that still use spreadsheets to manage their projects.<\/a><\/span><\/p>\n When producing live events, time is money and (stating the obvious but necessary) money is money. Spending hours tracking down vendors, keeping up with multiple spreadsheets, or manually entering data is all time that could have been spent on other revenue-generating tasks. Missed billing opportunities, money spent on a multitude of tools when none seem to be quite what you need them to be, and exorbitant travel and logistics costs are all examples of opportunities to capture that money straight to your bottom line.<\/p>\n With an all-in-one solution<\/a><\/span>, you can reduce that wasted time and money by automating manual processes and grunt work. This gives you more time to focus on strategically growing your business instead of constantly worrying about the workflow around your live events.<\/p>\n Because of their ability to increase efficiency, all-in-one solutions also help you chip away at cost of goods sold, leading to a stronger bottom line and higher valuation. Implementing such a system should be at the top of the list for event company founders and owners \u2014 especially those looking to exit in the near future.<\/p>\n {% video_player \u201cembed_player\u201d overrideable=False, type=\u2019hsvideo2\u2032, hide_playlist=True, viral_sharing=False, embed_button=False, autoplay=False, hidden_controls=False, loop=False, muted=False, full_width=False, width=\u20191920\u2032, height=\u20191080\u2032, player_id=\u2019116633563800\u2032, style=\u201d %}<\/p>\n LASSO founder, Clay Sifford, on the compounding effects of hidden costs<\/em><\/p>\n We can categorize all our costs down into three buckets: opportunity costs, expenses, and liability costs<\/span>.<\/span><\/p>\n Opportunity costs are the potential benefits forgone in favor of other options. They\u2019re not always tangible and can often be difficult to quantify.<\/p>\n \u21aa Example: <\/span>Your crewing, travel, and payroll processes all live in separate systems. You know it would be a smart move to consolidate them \u2014 find a solution that contained all of those tools in one. But it\u2019s not cheap, and your process is working well enough.<\/em><\/p>\n Now, let\u2019s say you receive an RFP for a project that fits squarely within your company\u2019s wheelhouse. You\u2019ve done other events like this one before, but this one\u2019s bigger and more complex in every way. Because you haven\u2019t invested in the tools and resources you needed to scale and support an event of this nature, you either have to turn down the business and lose the revenue or choose to take a major hit on your margin. Neither are ideal outcomes.<\/em><\/p>\n It\u2019s critical to consider the value of the alternatives you\u2019re not choosing to make the best decision for your business and its growth.<\/p>\n Expenses include any money spent on goods or services used by the company.<\/p>\n \u21aa Examples:<\/span> Labor, staff salaries, logistics, travel, equipment, rent, sales and marketing spend, etc.<\/em><\/span><\/p>\n It\u2019s important to track all expenses so that you can make informed decisions about how best to allocate resources within your organization.<\/p>\n Liability costs relate to the areas of your business where you are exposed and at risk to pay penalties, fines, legal fees, etc.<\/p>\n \u21aa <\/span>Examples:<\/span> <\/span>Your company works in a state that imposes penalties for missed meal breaks, your lack of safety initiatives exposes you to workers comp claims, or the dreaded misclassification audit imposes significant penalties for not paying your employees\u2019 taxes as their employer.<\/em><\/span><\/p>\n Now that we\u2019ve set the stage for your business\u2019s costs into these three buckets, let\u2019s start pulling back the curtain on what\u2019s really costing you.<\/span><\/p>\n \u00a0<\/p>\n The two main types of opportunity costs for event companies are lost revenue and missed billing opportunities.<\/p>\n Lost revenue <\/span>\u2014 refers to potential business that was not obtained because an event company lacked the necessary resources to handle it.<\/p>\n Missed billing <\/span>\u2014 refers to the services rendered that weren\u2019t billed because they were overlooked, or not documented or tracked effectively making it hard to go back to the client. This could also include when crew members that don\u2019t show, making them unbillable.<\/p>\n Many event companies can barely support the opportunities they have and are forced to say no to new business. Or, they take new business at smaller margins because they don\u2019t have the resources or tools to help them execute efficiently.<\/span><\/p>\n Does this sound familiar?<\/span><\/p>\n Resources are scarce and without good tools or talent, it\u2019s hard to execute and meet the demand. With the right tools and access to a solid talent pool, you can execute on more events without carrying the overhead to do so.<\/span><\/p>\n Think about how much business you have to turn down a year. How much does that cost you? In other words, how much more could you be making?<\/span><\/p>\n The real-time data and insights delivered by an all-in-one platform can help you pinpoint and capitalize on these opportunities. By streamlining workforce management<\/a><\/span>, project management<\/a>,<\/span> and inventory management<\/a><\/span> under one tool, you can understand your true capacity for growth and make smarter decisions to increase that capacity.<\/span><\/p>\n You might like: How to Build a Revenue Engine<\/a><\/span> <\/span><\/p>\n So often, changes to show flow, rehearsal needs, and gear requirements occur both before and during the show.<\/p>\n Because of the rushed nature of events, and because we seek to please our clients above all else, change orders are often not captured and billed.<\/p>\n Without an all-in-one tool to easily log the full cost of these ad hoc updates and upgrades on the fly, you either:<\/p>\n Are you eating small costs that add up to big costs? Now think about that year over year.<\/span><\/p>\n There\u2019s another huge benefit that an all-in-one platform can help you leverage. Modern event management platforms have built-in solutions for project management and team collaboration<\/a><\/span> with your client. No more foregoing revenue because \u201cit\u2019s too late to go back to the client\u201d.<\/p>\n Updates to the original scope of an event can be logged and flagged for follow up, ensuring it makes its way to the final project invoice.<\/span><\/p>\n Expenses are part of doing business. The tricky part is identifying the hidden expenses are that you can\u2019t see that compound, resulting in huge, unforeseen costs.<\/p>\n This is especially true in the event industry where the sheer volume of labor, travel, and complex pay rules can easily obscure expenses you hadn\u2019t accounted for.<\/p>\n For example, chances are high you\u2019re overpaying on your workers\u2019 comp. Often, crew don\u2019t work their full minimums, but unless you have reporting around that, you\u2019re most likely overpaying. And let\u2019s face it, workers comp in our industry isn\u2019t cheap.<\/p>\n What hidden expenses do you have? Well, if you knew, they wouldn\u2019t be hidden, would they?<\/p>\n So instead, we\u2019re going to shine the spotlight on them for you.<\/p>\n Without automated time capture systems in place, many companies resort to rounding time. Employees may be paid for more hours than they\u2019ve actually worked, resulting in inaccurate wages and additional payroll costs.<\/p>\n \u21aa Example, In-House Talent:<\/span> Let\u2019s consider a scenario where you have a five-day job and require 20 techs, each with an hourly rate of $40.<\/span><\/p>\n Let\u2019s say the job ends each day at 7:12 PM. If rounding, your employees will \u201cclock out\u201d at either 7:30 PM or 8:00 PM.<\/span><\/p>\n If you round until 7:30 PM, you will pay an additional 18 minutes for each of the 20 employees for all five days, which amounts to $1,200 of time not actually worked.<\/span><\/p>\n Now let\u2019s say you round up to the next hour. So, if the job ended at 7:12 PM and you round up to 8:00 PM, then you will pay over $3,200 for time not actually worked.<\/span><\/p>\n This doesn\u2019t even take into account what you owe for workers\u2019 comp on this rounded time \u2014 time you weren\u2019t actually exposed to any risk. <\/span>(Skip to Hidden cost #5: Workers\u2019 compensation for more.)<\/a><\/span><\/span><\/p>\n \u21aa <\/span>Example, Outsourced Talent:<\/span> Let\u2019s consider a scenario where you have a five-day job and require 20 techs. You are being charged $40 per hour for straight time.<\/em><\/p>\n Let\u2019s say the job ends each day at 7:12 PM. If rounding, the labor company will charge you until either 7:30 PM or (most often) 8:00 PM.<\/em><\/p>\n If you are being charged until 7:30 PM, you will pay an additional 18 minutes for each of the 20 workers, which amounts to $1,200 for five days of work.<\/em><\/p>\n Now let\u2019s say the company rounds up to the next hour, which is a common practice. So, if the job ended at 7:12 PM and they round up to 8:00 PM, then you will pay over $3,200 for those five days of work.<\/em><\/p>\n Reminder: <\/span>Both of these scenarios cover just one show. How many shows do you do each year?<\/p>\n Again, when you outsource labor to an agency, rounding forces you pay for time that wasn\u2019t worked, and delivers no extra benefits to your company or event.<\/p>\n Imagine if that didn\u2019t have to be the case. Just think of the money you could save on every worker for every event.<\/p>\n Without a tool that can both schedule crew and track their time, you have no way of seeing who is approaching overtime. This makes it very difficult to:<\/p>\n Let\u2019s expand on our rounding scenario above and assume your hourly cost for overtime is $60 per hour.<\/p>\n If those same 20 techs already worked more than 10 hours that day, and your labor company rounds to the half hour, you will pay an additional $1,800 for time that wasn\u2019t worked.<\/p>\n And if your labor company rounds to the next hour, you will overpay by $4,800 for no extra work or benefit.<\/p>\n It adds up fast!<\/p>\n \u00a0<\/p>\n Workers\u2019 compensation insurance covers injuries to crew while on the job. It is calculated as a percentage of payroll. And it\u2019s done this way because payroll is an indicator of the crews\u2019 level of risk (i.e., hours on the job.)<\/p>\n In the live events business, most positions have minimums. For example, crew might be asked to work a show where they are only needed for 3 hours, to make it worth driving in, that position might guarantee 5 hours of pay.<\/p>\n Most companies pay workers comp on the entire 5 hours instead of the actual exposure, which is 3 hours. Reporting event hours worked vs. hours paid can make a big difference in calculating these actual costs that add up very quickly.<\/p>\n \u270d\ufe0f Pro tip: <\/span>Make sure you\u2019re coded correctly. Incorrect coding is another massive area of overspending unnecessarily. (The code for most event crew in most states is 9154. Be sure you work with your agent to confirm and correct if necessary.)<\/p>\n Event companies typically have a tool for every step in the workflow \u2014 and a cost to license each of them. Case in point: in a 2022 survey, we found that 25% of event companies use 4+ tools for project management<\/a><\/span> purposes alone.<\/p>\n Tool consolidation \u2014 finding one piece of software that can be adopted by multiple departments for many functions \u2014 is not only an enormous opportunity for cost savings, but also a more effective way to distribute information company-wide. Said differently, a single source of truth can prevent costly confusion, receptive work, and delays.<\/p>\n Why travel a tech to an event when there are hundreds of perfectly good techs already living in that market? Of course, you may not know those hundreds, but there are easy ways to get connected to local event talent<\/a><\/span>. And if you do still need to travel your lead in, why pay top dollar on travel expenses?<\/p>\n The best all-in-one event production tools offer the following three features to keep travel costs low<\/a><\/span>:<\/p>\n Calculate how much you\u2019re overspending on crew travel<\/a><\/span>\u00a0<\/span><\/span><\/p>\n Many times, event companies default to hiring more staff to offset the inefficiencies in their processes or their lack of automation. They think the only way to grow is to throw more people at the problem. But the overhead cost of this thinking is enormous.<\/p>\n The right people plus the right software to automate manual, repetitive event tasks is a much more efficient approach. It also allows your team to be more operational and strategic rather than administrative and tactical. For instance, instead of constantly emailing and calling to schedule crew, your team can reallocate that time to recruiting, training, and engaging with your crew, which is far more valuable and yields a much higher return.<\/p>\n You might like: How Dupree Security Saves $60k a Year in Labor Coordination<\/a><\/span><\/span><\/p>\n Do you have a clunky, labor-intensive workflow to process payroll? Have you entertained the idea of hiring additional accountants or back office employees so you can invoice faster for cash flow?<\/p>\n Typically, this is because you lack the following:<\/p>\n If you can\u2019t track time fast, you can\u2019t invoice fast, which means you can\u2019t get paid fast, which negatively impacts cash flow.<\/p>\n When evaluating all-in-one event production tools, look for one that enables the three points listed above to automate payroll, expedite invoicing, and increase cash flow.<\/p>\n Related: 4 Signs It\u2019s Time to Update Your Event Payroll Software\u00a0<\/a><\/span><\/p>\n Late gear deliveries to an event site wastes precious minutes \u2014 minutes you are paying for your crew to stand around and wait. Imagine you have 30 crew members with nothing to do for two hours because the truck is late. 30 crew x 2 hours x $40\/hour = $2,400 \u2014 just for that one late truck. And it\u2019s safe to assume this happens throughout the year.<\/p>\n Individual event companies also don\u2019t have the buying power to command competitive shipping rates. They\u2019re often at the mercy of big-name transportation companies that are unwilling to negotiate on a case-by-case basis.<\/p>\n Event companies should be able to take advantage of competitive trucking rates, know the true cost of late deliveries, and have real-time insight into actual delivery times. This is something the top event production platforms enable. Tools with booking and negotiated transportation rates built-in are a huge plus and gives your team the peace and confidence they deserve in the field.<\/p>\n \u00a0<\/p>\n Minimizing the risks associated with your event company is paramount. There are two areas event company owners need to familiarize themselves with here: compliance and talent documentation.<\/span><\/p>\n If audited for employee misclassification<\/a><\/span> (categorizing crew as independent contractors rather than employees), the fines are steep \u2014 enough to put your business under. Event company owners need to make sure they\u2019re following the correct protocols and regulations for hiring crew members, as well as ensuring everyone on staff is properly onboarded with the correct tax documents, licenses, and insurance.<\/p>\n It\u2019s no longer OK to say, \u201cThat\u2019s how our industry does it,\u201d because it\u2019s not. Unlike a decade ago, most event companies are now issuing W-2s instead of 1099s.<\/p>\n To be clear, just because someone has an LLC and carries their own insurance does not qualify them to be a 1099 in the eyes of state or federal laws.<\/p>\n
Expenses<\/span><\/a><\/span>
Liability Costs<\/span><\/a><\/span> <\/p>\nHidden Opportunity Costs: Lost Revenue and Missed Billing Opportunities<\/h4>\n
Hidden cost #2: Missed billing opportunities<\/span><\/a><\/span>Hidden Expenses: Costing You More Than You Realize\u00a0<\/h4>\n
Hidden cost #4: Overtime\u00a0<\/span><\/a><\/span>
Hidden cost #5: Workers\u2019 compensation<\/a>\u00a0<\/span>
Hidden cost #6: Software applications\u00a0<\/span><\/a><\/span>
Hidden cost #7: Travel overages<\/a>\u00a0<\/span>
Hidden cost #8: Additional labor coordinators<\/span><\/a><\/span>
Hidden cost #9: Manual payroll and billing processes<\/span><\/a><\/span>
Hidden cost #10: Logistics costs and mishaps<\/span><\/a><\/span><\/p>\nHidden Liability Costs: The Risk of Non-Compliance and Failure to Centralize Your Talent Pool\u00a0<\/span><\/h4>\n
Hidden cost #12: Penalties and wage claims for not correctly paying overtime<\/a> <\/span>
Hidden cost #13: Not maintaining ACA compliance\u00a0<\/span><\/a><\/span>
Hidden cost #14: Not complying with state and federal laws and tax filings<\/a>\u00a0<\/span>
Hidden cost #15: Not housing your talent pool in a centralized place<\/span><\/a><\/span><\/p>\n In this article, we look at:\u00a0<\/h3>\n
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Categorizing Your Costs<\/h2>\n
Opportunity Costs<\/h3>\n
Expenses<\/h3>\n
Liability Costs<\/h3>\n
Hidden Opportunity Costs: Lost Revenue and Missed Billing Opportunities<\/span><\/h2>\n
Hidden cost #1: Lost revenue<\/h3>\n
Hidden cost #2: Missed billing opportunities<\/h3>\n
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<\/p>\nHidden Expenses: Costing You More Than You Realize<\/h2>\n
Hidden cost #3: Rounding<\/h3>\n
Hidden cost #4: Overtime<\/h3>\n
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\u00a0Is your crewing workflow bleeding your budget dry?<\/a><\/span><\/p>\nHidden cost #5: Workers\u2019 compensation<\/h3>\n
Hidden cost #6: Software applications<\/h3>\n
Hidden cost #7: Travel overages<\/h3>\n
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Hidden cost #8: Additional labor coordinators<\/span><\/h3>\n
Hidden cost #9: Manual payroll and billing processes<\/span><\/h3>\n
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Hidden cost #10: Logistics costs and mishaps<\/h3>\n
Hidden Liability Costs: The Risk of Non-Compliance and Failure to Centralize Your Talent Pool<\/span><\/h2>\n
Hidden cost #11: Penalties for misclassifying<\/h3>\n
Hidden cost #12: Penalties and wage claims for not correctly paying overtime <\/span><\/h3>\n