Agency margin calculator
Enter what you charge, the hours an account takes and what they cost. See your margin and the fee that would hit your target.
Your margin on a client is what you charge minus what it costs to serve them, and most of that cost is hours. Enter the monthly fee, the routine and strategy hours, your cost per team hour and any other costs, and the calculator shows the margin per account, the fee needed for the margin you want, and how many accounts your team can carry. Measure your hours over two weeks first, because guessed hours are the usual reason a margin looks better than it is. The pricing models guide compares ways to charge.
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Cofoundr takes over the routine checking, so the same team can look after more accounts.
How it works
- Hours per account = routine hours + strategy and client hours.
- Cost to serve = hours per account x cost per team hour. Margin = fee minus cost to serve.
- Accounts the team can carry = available hours / hours per account.
- The what-if reduces routine hours by the percentage you enter, and recomputes margin and capacity.
- Cost to serve also includes any other direct costs you enter. Fee needed for your target margin = cost to serve / (1 - target margin). Effective hourly rate = fee / hours per account.
How to use the result
The default numbers are placeholders based on the 4-account scenario behind Cofoundr's time calculator, about 23.5 routine hours per account a month. Replace them with your own, measured over two weeks, for a real answer.
Common questions
How do I work out my agency margin?
Take the monthly fee, subtract the cost of the hours the account takes (hours times your cost per hour) and any other direct costs, then divide what is left by the fee.
Where do my hours come from?
Track time per account for two weeks in three buckets: routine checking and diagnosing, reporting, and strategy and client contact.
Is a high margin always good?
Not if quality suffers. Protect strategy time for each client, since that is what retains them.
Does this include tools and other costs?
Yes, if you enter them. Put tools, freelancers and creative costs for the account in other direct costs. Leave it at 0 to count only the cost of team hours.
What is effective hourly rate?
The fee divided by the hours the account takes. If it is below your cost per team hour, the account loses money before any other cost.
Related
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Where the time goes for an agency running 4 Meta ad accounts
Scenario: 15 minutes of checking and 30 minutes of diagnosing per account per day over 22 working days, plus 2 reports per account at 3.5 hours each. Your numbers may differ.