Forecasting vs Scenario Planning for Events

If you offered event planners and accountants a superpower of their choice (excluding the really cool ones, obviously), you can almost guarantee that they would pick the power to tell the future.

In the events industry, having the foresight to plan for not only what is right in front of you, but multiple different outcomes and scenarios is essential in order to deliver a financially, logistically and experientially successful event. 

Being able to effectively forecast and scenario plan for future events is absolutely critical in the challenging event landscape today and with attendee behaviours changing and 20% of people are attending fewer festivals than in 2019, it is only becoming more important . However, it can be a complex process and knowing where to start, especially for independent events and festivals without a dedicated finance team, can be daunting and difficult to get right. 

Here we explore the differences between forecasting and scenario planning and  how you can use both to ensure your event is financially stable. 


What is Forecasting

Forecasting for events is the process of using historical data, coupled with industry trends in order to predict future data, typically revenue, costs and operating expenses. It is a mainstay in financial operations across pretty much every business in every industry and is critical to being able to make the right decisions when it comes to managing a budget and growing revenue. 

There are a few of different methods of forecasting that you can utilise to build a better picture of your events financial future, the main ones are: 


In a nutshell, the straight-line model of forecasting assumes that your events historic financial performance or growth will remain constant. The main downside is that, especially in the events industry, there are no guarantees that one year will look like the next and this method does not consider economic or industry trends, leaving you with a huge financial blindspot. 

Moving Average 

Similar to the straight-line model, in that it is based solely on historic performance, the moving average model is used to provide a forecast over a shorter specific time period, but again, it doesn’t go beyond historic data. 

Simple Linear Regression 

This model is more helpful in determining how different factors may impact your overall forecast, by taking a single independent variable into consideration. For example, if you were to sell more tickets than expected, how would this impact your event profit?

Multiple Linear Regression 

We’ll save you reading another paragraph – it’s the same as simple linear regression, but taking multiple variables into consideration.  For this reason, it is likely the most effective model for you to use in your event forecasting. 

The only downside? It’s complicated to try and execute this forecasting model manually, especially if you do not have in house accountancy experience, or are running your event finances from anything other than a dedicated event finance management software. 


What is Scenario Planning

Like forecasting, scenario planning is a key part of effectively managing your event budget and finances. It allows you to map possible outcomes based on multiple variables within your event plan and gain visibility of the impact these have on your budget and overall revenue. 

With larger events and festivals, scenario planning is even more important, because there are so many moving parts to consider. Some of these are more predictable and can be partially accounted for with accurate forecasting and historical data for example, fluctuations in revenue from ticket sales, different ticket tiers, costs associated with performers or more static costs around event infrastructure. However, some scenarios are more unpredictable for example, the impact of weather on your events or crowd behaviour/control.  

In a lot of cases, festivals and events are scenario planning to some extent, however they’re barely scratching the surface. The classic approach is to base your scenario planning exclusively on ticket sales – however this will leave you with limited visibility of the potential scenarios you may encounter throughout the planning process and put you in a position where you are forced to be reactive – potentially compromising the financial success of your event. The reality is that a top level focus on the bottom line will not set you up to be able to proactively plan how best to overcome challenges and capitalise on revenue opportunities in the lead up to your event. 

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The Roles of Forecasting and Scenario Planning in Event Budget Management 

For events and festivals – especially with so much uncertainty and strain in recent years, accurate forecasting and scenario planning is essential to delivering a successful and financially stable event. 

Forecasting is generally well considered among festival planners and accountants, however there is a tendency to view this as a static forecast, which is often not tracked effectively or synchronised with real-time data – leading to even the best forecast becoming inaccurate over the lifetime of an event, especially during turbulent times. 

Scenario planning, on the other hand, is less widely adopted, especially to the level that it needs to be in today’s challenging landscape for festivals and events. 

For many, scenario planning is synonymous with contingency budgets, and in some ways they share similar requirements and considerations, however your scenario planning strategy needs to go far beyond putting X amount of budget aside for undefined eventualities. In a lot of cases, contingency budgets are considered on a departmental level, which can lead to them being bloated and an ineffective way of managing your event budget. Once you have been running your event or festival for around five years, your contingency budget should be small and only there for true anomalies that you couldn’t have planned for, if you have developed your scenario planning strategy effectively, there should be no big surprises here. 

Effective scenario planning allows you to take the guesswork out of allocating contingency budgets – rather than putting aside budget for undefined circumstances, you are able to model any scenario that may occur, based on your existing budget and see how that circumstance will impact your event finances. 

For a comprehensive breakdown of how you should be utilising both forecasting and scenario planning in your event budget management strategy, check out our Ultimate Guide to Event Budget Management. 


Utilising Technology for Forecasting and Scenario Planning 

In order to build the best picture of your event  to ensure financial stability, you need to focus both on proper scenario planning and forecasting; making sure you are actively updating and monitoring these as part of your event planning processes. You can’t view creating scenario plans and forecasts as a box to tick once. 

This poses challenges to event planning teams as very quickly this can become a complex, time consuming task that really equates to a full-time job in the build up to your event/festival. Fortunately, there are a few options on how you can manage this: 

1. Hire a full time event accountant within your team

The most obvious solution to accessing support with your event budget management may be hiring a full time event accountant within your team. And it’s not a bad idea. They come with years of experience and can dive into the nitty gritty of your specific event. However, finding an event accountant that fits within your team, has experience running events just like yours and doesn’t come with a hefty price tag is a real challenge. 

2. Look for outsourced event accountancy support 

Maybe you don’t actually need a full-time accountant to help manage your event finances. If you simply need an extra pair of hands on deck for a set period of time, or for specific tasks, consider looking for outsource support. Eventwise offers an event accountancy service that gives you access to not only the tools you need, but also the experience and expertise to successfully manage your event finances. 

3. Introduce an event budget management software

In most cases this is the best option of the three. An effective event budget management software is the most cost effective option and holds many benefits to managing your event finances outside of forecasting and scenario planning as well – from integrating directly with your other tools, to reducing inaccuracies across the board and giving you unlimited access to the real time data you need to make better decisions about your event. 


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Two sides of the same event finance coin

While both forecasting and scenario planning are key components of predicting your events financial stability in short and long term, they can not be considered as one in the same. You need them equally and to make sure that you have the time, skills and tools in place to execute both effectively. Ultimately, the best way to ensure you are doing this is to utilise a dedicated event budget management software that gives you access to both forecasting and scenario planning tools. 

If you skip over either forecasting or scenario planning, it may well contribute to the downfall of your event financially, however if both are planned and executed seamlessly, you just gained a superpower. 


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