Your inefficiencies are costing you. And you’d be surprised by how much.
We’re going to help you identify the biggest blind spots event companies like yours have. But understanding the problem is only half the battle. So, we’ll 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.
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.
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 opportunities to capture that money straight to your bottom line.
With an all-in-one solution, 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.
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—especially those looking to exit in the near future.
In this article, we look at:
- The different types of costs associated with running an event company
- How an all-in-one platform can help you save both soft costs (time) and hard costs (good ol’ cash)
We can sort all our costs into three buckets: opportunity costs, expenses, and liability costs.
Categorizing Your Costs
Opportunity Costs
Opportunity costs are the potential benefits forgone in favor of other options. They’re not always tangible and can often be difficult to quantify.
Now, let’s say you receive an RFP for a project that fits squarely within your company’s wheelhouse. You’ve done other events like this one before, but this one’s bigger and more complex in every way. Because you haven’t invested in the tools and resources you need to scale and support an event of this nature, you either have to turn down the business and lose the revenue or take a major hit on your margin. Neither is an ideal outcome.
It’s critical to consider the value of the alternatives you’re not choosing so you can make the best decision for your business and its growth.
Expenses
Expenses include any money spent on goods or services used by the company.
It’s important to track all expenses so you can make informed decisions about how best to allocate resources within your organization.
Liability Costs
Liability costs relate to the areas of your business where you’re exposed and at risk of paying penalties, fines, legal fees, etc.
Now that we’ve sorted your business’s costs into these three buckets, let’s start pulling back the curtain on what’s really costing you.
Hidden Opportunity Costs: Lost Revenue & Missed Billing Opportunities
The two main types of opportunity costs for event companies are lost revenue and missed billing opportunities.
Lost revenue refers to potential business that wasn’t obtained because an event company lacked the resources to handle it.
Missed billing refers to services rendered that weren’t billed because they were overlooked, or weren’t documented or tracked well enough to go back to the client. It also includes crew no-shows, which you can’t bill for.
Hidden Cost #1: Lost Revenue
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’t have the resources or tools to execute efficiently.
Does this sound familiar?
Resources are scarce, and without good tools or talent, it’s hard to execute and meet the demand. With the right tools and access to a solid talent pool, you can execute more events without carrying the overhead to do so.
Think about how much business you turn down a year. How much does that cost you? In other words, how much more could you be making?
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, project management, and inventory management under one tool, you can understand your true capacity for growth and make smarter decisions to increase it.
Hidden Cost #2: Missed Billing Opportunities
So often, changes to show flow, rehearsal needs, and gear requirements happen both before and during the show.
Because of the rushed nature of events, and because we want to please our clients above all else, change orders often aren’t captured and billed.
Without an all-in-one tool to log the full cost of these ad hoc updates and upgrades on the fly, you either:
- Forget to document and bill the change order altogether, or
- Let it slide because the time and effort to document and bill the change order after the fact isn’t worth the trouble.
Are you eating small costs that add up to big costs? Now think about that year over year.
There’s another huge benefit an all-in-one platform gives you. Modern event management platforms have built-in tools for project management and team collaboration with your client. No more forgoing revenue because “it’s too late to go back to the client.”
Updates to the original scope of an event can be logged and flagged for follow-up, making sure they land on the final project invoice.
Hidden Expenses: Costing You More Than You Realize
Expenses are part of doing business. The tricky part is identifying the hidden expenses you can’t see—the ones that compound into huge, unforeseen costs.
This is especially true in the events industry, where the sheer volume of labor, travel, and complex pay rules can easily obscure expenses you hadn’t accounted for.
For example, chances are high you’re overpaying on workers’ comp. Crew often don’t work their full minimums, but unless you have reporting around that, you’re most likely overpaying. And let’s face it, workers’ comp in our industry isn’t cheap.
What hidden expenses do you have? Well, if you knew, they wouldn’t be hidden, would they? So instead, we’re going to shine the spotlight on them for you.
Hidden Cost #3: Rounding
Without automated time capture in place, many companies resort to rounding time. Employees may be paid for more hours than they actually worked, resulting in inaccurate wages and additional payroll costs.
The job ends each day at 7:12 PM. If you’re rounding, your employees will “clock out” at either 7:30 PM or 8 PM.
If you round to 7:30 PM, you’ll pay an additional 18 minutes for each of the 20 employees for all five days. That’s $1,200 for time not actually worked.
If you round up to the next hour—8 PM—you’ll pay $3,200 for time not actually worked.
And that doesn’t even account for what you owe in workers’ comp on this rounded time—time you weren’t actually exposed to any risk. Skip to Hidden Cost #5: Workers’ Compensation
The job ends each day at 7:12 PM. If the labor company rounds, it’ll charge you until either 7:30 PM or (most often) 8 PM.
If you’re charged until 7:30 PM, you’ll pay an additional 18 minutes for each of the 20 workers. That’s $1,200 for five days of work.
If the company rounds up to the next hour (a common practice), you’ll pay $3,200 for those five days of work.
Reminder: Both of these scenarios cover just one show. How many shows do you do each year?
When you outsource labor to an agency, rounding forces you to pay for time that wasn’t worked and delivers no extra benefit to your company or event.
Imagine if that didn’t have to be the case. Think of the money you could save on every worker for every event.
Hidden Cost #4: Overtime
Without a tool that can both schedule crew and track their time, you have no way of seeing who’s approaching overtime. That makes it very difficult to:
- Predict overtime expenses
- Manage overtime hours in the field with your client and your crew
Let’s expand on the rounding scenario above and assume your hourly cost for overtime is $60.
If those same 20 techs already worked more than 10 hours that day, and your labor company rounds to the half hour, you’ll pay an additional $1,800 for time that wasn’t worked.
If your labor company rounds to the next hour, you’ll overpay by $4,800 for no extra work or benefit.
It adds up fast.
Is Your Crewing Workflow Bleeding Your Budget Dry?
Hidden Cost #5: Workers’ Compensation
Workers’ compensation insurance covers injuries to crew on the job. It’s calculated as a percentage of payroll, because payroll is an indicator of the crew’s level of risk (i.e., hours on the job).
In the live events business, most positions have minimums. For example, crew might be needed for only 3 hours on a show, but to make it worth the drive, that position guarantees 5 hours of pay.
Most companies pay workers’ comp on the full 5 hours instead of the actual exposure, which is 3 hours. Reporting hours worked vs. hours paid can make a big difference in calculating these costs, which add up very quickly.
✍️ Pro tip: Make sure you’re coded correctly. Incorrect coding is another massive area of unnecessary overspending. (The code for most event crew in most states is 9154. Work with your agent to confirm and correct it if necessary.)
Hidden Cost #6: Software Applications
Event companies typically have a tool for every step in the workflow—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 alone.
Tool consolidation—finding one piece of software that multiple departments can adopt for many functions—isn’t only an enormous opportunity for cost savings. It’s also a more effective way to distribute information company-wide. A single source of truth prevents costly confusion, repetitive work, and delays.
Hidden Cost #7: Travel Overages
Why travel a tech to an event when there are hundreds of perfectly good techs already living in that market? You may not know those hundreds, but there are easy ways to get connected to local event talent. And if you still need to travel your lead in, why pay top dollar for it?
The best all-in-one event production tools offer three features to keep travel costs low:
- The ability to see the true cost of travel before you book that person. There are often major variances. For example, it could be $500 cheaper to travel crew from Atlanta than from Orlando.
- Negotiated travel rates and booking, in-platform. You should be able to pay group rates for your crew and book and communicate trip details to your travelers in bulk.
- A talent pool of local labor and top techs in all the major markets. It should be easy to find quality crew with competitive rates and top-notch skills who are already in the city where you’re having your event.
Calculate How Much You’re Overspending on Crew Travel
Hidden Cost #8: Additional Labor Coordinators
Event companies often default to hiring more staff to offset inefficient processes or a lack of automation. They think the only way to grow is to throw more people at the problem. But the overhead cost of that thinking is enormous.
The right people plus the right software to automate manual, repetitive event tasks is a much more efficient approach. It also lets your team be operational and strategic rather than administrative and tactical. Instead of constantly emailing and calling to schedule crew, your team can put that time toward recruiting, training, and engaging your crew, which is far more valuable and yields a much higher return.
Hidden Cost #9: Manual Payroll & Billing Processes
Do you have a clunky, labor-intensive workflow to process payroll? Have you considered hiring more accountants or back-office staff so you can invoice faster for cash flow?
Typically, that’s because you lack:
- A tool that tracks hours worked in real time and integrates with payroll
- A payroll partner that understands the events industry and all its nuances
- A way to automate the calculation of complicated pay rules
If you can’t track time fast, you can’t invoice fast. If you can’t invoice fast, you can’t get paid fast—and your cash flow takes the hit.
When evaluating all-in-one event production tools, look for one that delivers all three to automate payroll, expedite invoicing, and increase cash flow.
Hidden Cost #10: Logistics Costs & Mishaps
Late gear deliveries to an event site waste precious minutes—minutes you’re paying your crew to stand around and wait. Imagine 30 crew members with nothing to do for two hours because the truck is late. 30 crew × 2 hours × $40/hour = $2,400, just for that one late truck. And it’s safe to assume this happens throughout the year.
Individual event companies also don’t have the buying power to command competitive shipping rates. They’re often at the mercy of big-name transportation companies that are unwilling to negotiate case by case.
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. The top event production platforms make this possible. Tools with built-in booking and negotiated transportation rates are a huge plus and give your team the peace of mind and confidence they deserve in the field.
Hidden Liability Costs: The Risk of Non-Compliance & Failure to Centralize Your Talent Pool
Minimizing risk is paramount for your event company. There are two areas owners need to know well here: compliance and talent documentation.
Hidden Cost #11: Penalties for Misclassifying
If you’re audited for employee misclassification (categorizing crew as independent contractors rather than employees), the fines are steep—enough to put your business under. Event company owners need to follow the correct protocols and regulations for hiring crew and make sure everyone on staff is properly onboarded with the correct tax documents, licenses, and insurance.
It’s no longer OK to say, “That’s how our industry does it,” because it’s not. Unlike a decade ago, most event companies now issue W-2s instead of 1099s.
To be clear, just because someone has an LLC and carries their own insurance doesn’t qualify them as a 1099 in the eyes of state or federal law.
Hidden Cost #12: Penalties & Wage Claims for Not Correctly Paying Overtime
If your company is issuing 1099s instead of W-2s, there’s much more room for error when it comes to overtime. That’s because 1099 contractors aren’t subject to the time-and-a-half or double-time pay associated with overtime. W-2 employees, on the other hand, come with much stricter overtime requirements that must be met for everyone eligible.
Hidden Cost #13: Not Maintaining ACA Compliance
Under the Affordable Care Act (ACA), employees are entitled to benefits when they work an average of 30+ hours a week for a single company. Many event companies use the same people over and over but don’t provide benefits for those freelancers, which puts them at risk of fines and penalties.
It’s important to consider how ACA regulations affect your business, along with any applicable overtime rules, to avoid costly mistakes. An all-in-one tool built specifically for the events industry can help you manage your exposure to these costs, putting you in the driver’s seat instead of getting surprised by unplanned expenses.
Taking this step can save you time and money in the long run by protecting you and your company from expensive fines—and it gives your employees a better work experience, too.
Hidden Cost #14: Not Complying With State & Federal Laws and Tax Filings
Many event companies have employees in multiple states, which means filing taxes in each of those states, both quarterly and annually. It also multiplies the number of state regulations on sick leave and overtime you have to comply with.
In California, for example, an employee earns one hour of sick leave for every 30 hours worked. Who in your company is tracking this? Enforcing it? Now multiply that complexity by every state you operate in.
Failing to know and follow these state laws and regulations can result in penalties and fines, as well as a difficult work environment for your crew. Streamlining your scheduling and payroll with software that calculates and automates these rules is like an insurance policy—an investment that protects the future of your company.
There are also Employer of Record (EOR) solutions that outsource that liability for a fraction of the cost. It’s a smart option when you know which crew you want on an event but want to outsource payroll to a third party. That third party essentially becomes the crew member’s employer, marking up their rate to cover taxes, workers’ comp, etc.
Hidden Cost #15: Not Housing Your Talent Pool in a Centralized Place
Where do you keep all your crew’s contact information? How do you keep track of who does what, who can run what equipment, their market, their rates, etc.? Often, event companies house this in a spreadsheet that could be corrupted or deleted at any time. Or worse, in the contacts app on your labor coordinator’s phone.
What would you do if they walked out the door tomorrow?
As an owner, you need to protect the talent pool your company has built. Your talent is what sets you apart. But you can’t be confident your roster is safe if it’s not housed in a centralized place everyone who needs it can access.
Storing your crew information in a centralized, all-in-one platform for event production doesn’t just eliminate the risk of loss. It also speeds up scheduling and confirmations. The best tools let you schedule and confirm your roster in bulk.
An All-in-One Event Production Platform: The New Competitive Advantage
For event company owners, modern software made specifically for the events industry is an investment you can’t afford not to make—especially with demand for events at an all-time high and the supply of top event talent at an all-time low.
At the very least, it shines a light on these hidden costs. Being aware of them and their impact on your business is the hardest part. At best, it helps you get proactive about avoiding them. That means you can be more competitive than ever, lapping the companies that struggle with multiple, disconnected tools and leapfrogging the ones that stubbornly stick to manual processes.
Find the Money Hiding in Your Workflow
LASSO is where event companies work. One system to align crew, gear, finances, run of show, and everything in between—from load-in to load-out.
