Budget Process

Introduction

We’ve been getting a significant number of questions about what goes in to the “black box” of event planning. This letter is intended to answer your questions about our budget process and how we set ticket prices. 

Over six years, we have grown to eight times our original size and three times our original number of class and dance options. Since 2008, when the event started with just over 100 people in Houston and a top price of $180, the event has grown to over 800 people and a top price of $349. We’ve gone from 2.5 days and one room, to 3 full days, 3 evening dances, 3 late nights, and 3 rooms. Our extreme growth forces us into a different venue bracket usually reserved for mega-competitions and corporate events. Our desire to grow fusion, be more accessible to more people, and to give you more every year also requires us to raise the price. But, we first reduce our margin and take on more risk, before we ever raise the price. We put our attendees first at every step in the process.

 

Why do we ask the dance community to vote on their preference for FX’s location, venue, and ticket prices?

Starting in 2013, we have put our location and prices to a vote amongst the community.  This means we research and negotiate four or five separate deals with viable venues.  We try and negotiate venue costs (including catering if required by the venue, room booking guarantees, hotel room rates, and additional costs) into a preferred budget which does not have any impact on our preferred ticket pricing.  When a venue does not make our preferred ticket pricing possible, we adjust our ticket prices to make the venue financially viable.  After we’ve negotiated all the deals, we assemble and present the costs and benefits of each venue (including bottom and top tier prices) to the dance community so that they can vote on which combination of location, venue, hotel room rates, and FX AA ticket costs are the most desirable to them. 

Why do we do this?  In 2013 as we researched venues, it became clear to us that LVFX was a rare circumstance where we could find a hotel large enough to fit our attendees and allow us to bring in our own food and beverage.  The vast majority of properties do not, under any circumstances, allow outside food and beverage in their facilities due to liability and health code concerns.  Accordingly, we did not feel comfortable raising our prices to unless we gave the community a say in the matter and let them choose which combination of costs and value they were most comfortable with.  This ensures that each attendee knows the upper limits of our ticket prices and buys into the venue, location, and amenities.  It tells us very clearly what the dance community wants and supports our decision to take bigger risks because we know that the attendees have bought into our risk taking.

 

Where does my money go? 

The largest portion of money for the event goes to the following areas: securing high quality, all-in-one hotel venues, hiring world-class instructors from across the nation, and renting equipment such as dance flooring and sound systems.  After that, we pay for live music, permits, insurance, food (if not included in the venue cost), marketing, and computer coding.

 

How do you develop your budget? 

We always start with an achievable budget. We only promise what we are certain we can deliver. And we deliver everything that we promise – even if we lose money in the end. From venues to hotels to instructors to food, our goal is to provide the best value you can get for a truly unique, high quality experience. Everything is negotiated again and again to give all of our attendees the best possible event at the best possible value. Not one dime is wasted in this event. 

How do we do this? We develop the budget from two perspectives. We consider how much it will cost to throw an event that is even better than the year before. And, we consider how much can and will someone pay to attend? 

First, we figure out what location and venue we need to provide a great experience to hundreds of dancers. We create a rough budget based on projected numbers, comp tickets, and our location. We calculate how much can be collected based on projected numbers and reasonable price increases and comps (for organizers, volunteers, DJs, instructors, etc).  We then start negotiating with multiple properties in multiple cities to try and direct them into this budget.  As discussed above, if the property cannot fit into the ideal budget, we determine if the impact to ticket prices is minimal enough to justify presenting that property to the dance community for voting. 

Second, we create general budget categories and add in line items for our needs: Instructors, Food, Live Music, Equipment Rental, Licenses, Permits, Insurance, Security, Marketing, Registration, Miscellaneous, Computer coding.  We fill in and total up general numbers for the overall weekend budget, then apply that to individual days. Then we break that down by allocation per attendee. 

Third, we review budget and make adjustments according to what we think is a reasonable and acceptable ticket price. We also create a pricing formula that allows for discounts and tiered pricing and we determine how much money we are willing to lose on the front-end in order to give discounts. If we sell out, we add even more  to the event. 

We are committed to adding additional value as value becomes available. We ask most people who work with us to keep the initial required investment low and then enjoy the upside if we do better than our budget. This process considers our attendees, the value we provide to them, and the realities of the marketplace.

 

Will you release budget specifics? 

We will never share our specific budget or actual expenses. Why? Because it would ruin our ability to negotiate and more importantly, betray every person we hire and contract with.  Many people are very generous with their time and compensation because they believe in the event and like us. For us to publish their negotiated rates effectively destroys their charity by giving every other potential event the ability to say, “well, you took $X from Fusion, you should be fine with $Y from us.” To publish the budget puts them in a position of disadvantage when negotiating rates and payments. We work hard to negotiate for the best possible instructors, venues, food, and music for the event. We do our utmost best to keep costs low, while keeping the quality high.

 

Why are you so concerned about your budget? 

Budget development is incredibly important to us because we will only promise what we are certain we can deliver. It is also a conservative process where we promise what we can definitely give such that we will never cancel the event simply because of economics. We deliver everything that we promise, even if we lose in the end. We are essentially selling our reliability. If people cannot trust us to deliver on our promises, they will not come back.

Will you help me make an event budget?

Though we will not give you specific numbers on which to base your own budget, we are happy to help you develop a budget. We are committed to helping the Fusion (and social dance) movement around the country. When organizers of fledgling events come to us for specific help with budgeting and other logistics, we’re happy to provide advice.

 

Want to know more about our process and how we compensate our DJs? Please click here.