Hosting a race is an arduous task with many moving parts. One of the fundamentals of creating a good race is a strict budget accounting for all expenses and possible revenues.
But how do you create a running event budget that will include everything? How much does it cost to put on a race? How do you calculate revenue and expenses for an event?
Keep reading to learn the answer to these burning questions and discover how to create a running race event budget.
Main Principles and Concepts for Building a Budget
Before you make your running race budget, be it a marathon or a humble 5K, you need to adopt a few principles and learn a few concepts. They will help you to create the most accurate budget for a successful race.
Honesty
Honesty with yourself is crucial when creating budgets for racing events, such as marathons, half marathons, 10Ks, and 5Ks. You might be tempted to make optimistic assumptions about the prices and revenues—a good mindset to start from—but you need to temper them a bit.
Err on the side of caution when you form your race budget. It is better to be pleasantly surprised than disappointed when asking for quotes from vendors.
Transparency
Your budget for a racing event needs to be complete and transparent: no little detail should be omitted, however small or seemingly unimportant.
A detailed and transparent budget will also help you secure a sponsor via your racing event proposal—a sponsor is more likely to finance your race if you seem trustworthy.
Revenue Streams
Understand what will bring you revenue. Your participants will want to get something for their race entry fees: swag, event services, staff, and other things to positively affect their experience.
Some of these costs may be offset by race sponsorships or donations. Whatever you plan, ensure that you understand your revenue streams.
Legal Structure
Your legal structure will impact your accounting, influencing your expenses, profit, and sponsorships. You must decide whether your event will be conducted under a non-profit, charity, or private company. Consult your accountant if you need more clarification about the best race option.
Challenges for Forming a Race Budget
Forming a race budget comes with a fair bit of challenges.
Uncertainty
Organizing a race, especially for the first time, comes with a fair bit of uncertainty. What is the average cost of organizing a race? How many people will come to your event? How much will the sponsors provide?
Novice organizers can be highly optimistic about their event. If you plan on hosting 1,000 people and only 200 show up, you are definitely going to lose a ton—not just in money but also in reputation. Naturally, being overly conservative is another surefire way to lose out on potential revenue.
For this reason, it is important to have realistic expectations. Gather data from previous similar events in the area, especially in their first year. Expect to have 10%–20% fewer people but be prepared to scale your race accordingly. You will most likely get to the same participation level or even higher.
You can conduct a scenario analysis of your event to help you predict the financial outcomes. There are two main methods for analyzing the budget:
- Min/max analysis. What are your most optimistic and most pessimistic predictions for the race? These should not be an “infinity versus zero” prediction—instead, take the most reasonable best- and worst-case scenarios. Will your best-case scenario be enough to cover your expenses and give you enough revenue to leave you satisfied? Will your worst-case scenario be completely devastating or leave you with a small revenue?
- Breakeven analysis. Figure out how many participants you need for your event to break even. It is best to recalculate this figure throughout your budgeting process. Reach that number, and from there, you can only profit.
Comparing Estimates with Actual Numbers
When drawing up your race budget, make two columns: one for estimated costs and revenues and the second for actual numbers.
Your estimated number is the best guess of item cost. When you get a quote from a vendor, you can then put in the actual numbers.
When you have all of your actual numbers, you can adjust your budget and add or delete some items accordingly. Moreover, this approach allows you to see if you missed any quotes, alleviating the stress of tracking this variable.
Sponsorship
Securing sponsorships is never easy—you need to find them and convince them that your event will be profitable and exciting for their target audiences. We said before that transparency in making a budget is crucial, partially because it will help you convince the sponsors.
Inexperienced organizers often overestimate the value sponsorships provide. There are many reasons for this, including poor transparency of these deals, difficulty benchmarking against similar events, and the naivety of inexperienced organizers.
Because sponsorships are so unpredictable, you should be cautious when adding them to your budget. Here are a few tricks to keep your budget close to reality:
- Probability adjustment. If the sponsor still needs to specify how much they will give you, adjust your expectations accordingly. We recommend adding the offered funds as a probability. If you expect your sponsor to provide you with $1,000 with a 10% success chance of securing the sponsor, add just $100 to the budget. As the negotiations progress and the probability rises, add more funds to your budget. This way, if the sponsor refuses the deal, you won’t be left with a gaping hole in your budget.
- Item price adjustment. If the sponsor offers to provide an item on your budget for free or at a massive discount, don’t simply delete the item from your list. Add a negative price adjustment to that item and consider it covered. This will allow you to be transparent and return to that item if the sponsorship collapses.
Taxes and Other Charges
There are only two things that are certain: death and taxes. And taxes often become the death of many hopes and dreams of successful races.
Always be on the lookout for hidden taxes or charges from vendors. Here are some questions you should ask your accountant and vendors:
- Is the number in the proposal final, or will you have to add VAT or some other taxes?
- Does my legal status affect my taxes?
- Are you buying supplies from overseas or selling race entries to overseas participants? Are they subject to duties or other additional fees?
- Do you need to pay sales tax or other taxes on registration fees or other revenues?
- Have you deduced the registration fees of race directories from your project’s registration fee revenue? (By the way, Runzy offers free sign-up for organizers, so that is one less problem for you to worry about!)
Volunteers
While volunteers are kinda-sorta free, they really aren’t. You will need money to: recruit (ads and manpower), train and deploy (venue hire and travel expenses), and keep happy (swag and catering). Always have those costs in mind and in the budget.
Actual Costs
Now that you know what to keep in mind, we can plan the race. How much does it cost to host a marathon or another running race? Read on and learn the actual numbers.
T-Shirts
The cost to produce the T-Shirts is $5–$9 per shirt.
Insurance
Insurance is a must. It will cover a lot of things, depending on your package. Prices usually range from $250 to $1,500.
Police Support & Permitting
The price of this will vary wildly. The common formula for calculating police support is per police car or per officer. We have seen short races that incurred up to $1,000 and races that were completely free because the local authorities supported them.
You will also need permits, which also vary. Depending on your location, it can be $35–$200. Again, local authorities may waive the fee if they are interested in the event.
Traffic Control Devices
Traffic cones cost $1.50–$2 per cone.
Port-O-Potties
Some venues will have bathrooms onsite, but if they do not, it will be $60–$90 per potty.
Timing
If you plan on timing your race, expect to pay a pretty penny. Race timing systems costs typically start from $500. Make sure to ask if the price includes bibs: if not, they will hit your budget for an additional $30+.
Race Certification
Racing course certification is important if you want your race to be competitive. Measuring the course on your own is free but not really: you will need special equipment. You can also hire a professional measurer who will do it for you. Expect to pay them $200–$1,000, depending on your race and the measurer.
You will then have to submit the race data to the USATF website, and the review fee is up to $30.
Marketing
Marketing also varies wildly depending on how big and impactful you want it to be. You can do it all yourself, which will cost you nothing, but a professional ad campaign typically starts at $300. You can go as high as you want with it; the sky is the limit.
Photographer/DJ
If you want music or race photos, plan to spend $200–$600 for a photographer and DJ.
Event Banners
Depending on the size, the banners usually range from $50 up to $600.
Medals and Trophies
Medals and trophies are not necessary for a running race but are a welcome addition. Depending on how many you plan to give out and their quality, expect to pay $2–$12 per medal. Trophies usually start at about $5 each and can go as high as you want (maybe you want a solid gold trophy for every participant—who are we to judge?).
Conclusion
As you can see, it is extremely difficult to estimate how much money you will need for a running race—mainly because you can go as humble as $2,000 or as grand as a million—the sky is the limit.
We hope our short guide helped you better understand the expenses of organizing a running race.