This calculator gives you a high-level view of your agency’s financial health.
And helps answer questions like:
- What happens if I raise our rates by $10/hour?
- How would hiring more staff affect profit?
- What if we improve billable utilization by 5%?
- Are our overheads eating too much into margin?
Just plug in your numbers and click “Calculate” to get instant insights.
You can also tweak the inputs to test different scenarios. Sometimes, even small adjustments—like a 5% increase in utilization or a $5/hour rate bump—can make a big difference to your bottom line.
Calculator fields explained
Here’s what each input means:
- Team Size (people): Enter the number of billable staff in your delivery team — such as designers, developers, consultants, or strategists. Exclude admin, leadership, or other non-billable roles.
- Availability (hours/month): This is the number of working hours each team member is available per month. For full-time employees, this is typically around 160 hours.
- Billable Utilization (%): The percentage of time your team spends on client work. For example, 70% of 160 hours = 112 billable hours per month. Most agencies aim for 70–80%.
- Average Net Rate ($/hr): The average hourly rate you bill your clients, after factoring in discounts, write-offs, or scope creep. If your team has different rates, enter a blended average.
- Avg Employee Cost ($/month): The fully loaded monthly cost of employing one person. This includes salary, taxes, benefits, equipment, and software.
- Overheads (%): These are your business costs beyond salaries. Things like rent, software, admin staff, or leadership team expenses. Enter this as a percentage of total salary cost.
What’s a good profit margin for agencies?
Understanding your profit margin is one thing. Knowing how it stacks up is another.
To get a clearer picture, we spoke with Marcel Petitpas, agency profitability expert and CEO of Parakeeto.
Here’s how your margin compares to typical industry ranges:
| Net profit margin % | What it means |
|---|---|
| 25%+ | Excellent. Efficient, scalable, and profitable — with room for reinvestment. |
| 15–25% | Healthy. You’re within the industry norm, but there may still be gains to unlock. |
| Below 15% | A red flag. Time to assess your pricing, delivery model, and overheads. |
X ways to increase your net margin %
[SME tips + Scoro focused content to go here]
