Price and manage delivery risks — Events & live production

By the end of this lesson, you will be able to calculate a price, test its return and address a delivery risk.

Common to all countries

Build the cost before choosing the price

Start with quantities, paid time, third-party costs and delivery assumptions. Include mobilisation, supervision, compliance, warranty or support, overhead and the end of the contract where relevant. Separate fixed costs from costs that vary with usage. Forecast volumes are not minimum orders unless the contract makes that commitment.

In this exercise, target margin means profit divided by selling price. A 20% margin therefore requires price = cost ÷ 0.80. Adding 20% to cost is a markup and produces a lower margin. Taxes, discounting and financing are excluded from these teaching sums; add the applicable items to a real bid. Test one credible adverse scenario and decide who controls its cause and how the contract allocates it.

Worked example — Deliver a two-day public festival

This is a fictional teaching case. Quantities, prices and contractual conditions below are assumptions for the exercise, not legal requirements or market benchmarks.

Adverse weather may require a reserve indoor arrangement or cancellation. Cost the selected contingency and read which party bears supplier cancellation charges. A general promise to “adapt to weather” leaves both price and authority unclear.

Item	Cost (currency units)
Production and technical suppliers	32,000
Staff and visitor services	16,000
Permissions, rights and overhead	8,000
Total	56,000

Total cost is 56,000. To retain 20% of the selling price as profit, price is 56,000 ÷ 0.80 = 70,000. If “Reserve weather arrangement” adds 7,000 to cost without a price increase, profit becomes 7,000, or 10% of price. Preserving 20% would require 78,750, only where the procurement permits that price. A cost increase does not automatically entitle the supplier to a contract price increase.

Country specific — what to verify

Identify local event permissions, venue and fire requirements, employment rules, music rights and relevant security licensing. HSE guidance is a useful planning reference for Great Britain; it is not the approval process for every country or a substitute for competent event-safety assessment.

Alcohol permissions, employment and insurance rules. Use the destination-country module and the actual tender pack. The sources below are references with their own scope; they do not form a single worldwide regime. For the general method, revisit the foundations.

Put it into practice

Calculate the price for 20% of selling price as profit, then add 7,000 to cost. Calculate profit at the unchanged price and write one risk-control action.

Model answer

Total cost is 56,000. To retain 20% of the selling price as profit, price is 56,000 ÷ 0.80 = 70,000. If “Reserve weather arrangement” adds 7,000 to cost without a price increase, profit becomes 7,000, or 10% of price. Preserving 20% would require 78,750, only where the procurement permits that price. A cost increase does not automatically entitle the supplier to a contract price increase. Adverse weather may require a reserve indoor arrangement or cancellation. Cost the selected contingency and read which party bears supplier cancellation charges. A general promise to “adapt to weather” leaves both price and authority unclear.

Keep this worksheet in your working file. The quiz below checks the lesson’s decisions; passing it is neither a professional qualification nor a guarantee of an award.