01 / FREE AGENCY TOOL
Build a delivery estimate before choosing a fee
List the work packages that produce the agreed outcome: discovery, production, quality review, client review and handoff. Assign hours to each and include the people needed to deliver them. A single optimistic total is difficult to defend when the scope changes. If uncertainty is concentrated in one stage, make that stage explicit and consider a paid discovery phase or a bounded assumption instead of silently spreading contingency across the quote.
02 / FREE AGENCY TOOL
Separate margin from markup
A margin target is a percentage of revenue. A markup is a percentage added to cost. If delivery costs $5,000, adding 30% produces a $6,500 fee and a margin of about 23.08%. To retain a 30% margin, the fee must be about $7,142.86. This distinction matters when the agency has a target contribution requirement: using markup language while planning for margin can leave less money available for overhead than expected.
03 / FREE AGENCY TOOL
Work through a concrete example
The prefilled example is a planning scenario, not a customer result. Estimated delivery hours: 80 hours; Hourly delivery cost: 50 $/hour; Other direct costs: $1,000; Target direct margin: 30 %. Change these values to match your situation, then calculate again. Save the CSV if you want a record to discuss with a colleague or compare with a later review.
Delivery cost = hours × cost per hour + expenses. Project fee = delivery cost ÷ (1 − target margin).
| Result | Example output |
|---|---|
| Suggested project fee | $7,142.86 |
| Planned direct profit | $2,142.86 |
| Estimated delivery cost | $5,000.00 |
| Target direct margin | 30% |
04 / FREE AGENCY TOOL
Choose costs that match the decision
Include the expected cost of delivery labor and project-specific expenses. Subcontractor fees, specialist licenses used only on this project and production costs can belong here. General office overhead belongs in the wider business model unless you deliberately allocate it into hourly cost. Pass-through amounts require particular care: decide whether they are part of revenue and cost or excluded from both, then apply that convention consistently to the calculation and contract.
05 / FREE AGENCY TOOL
Use the fee as a commercial checkpoint
A mathematically correct fee can still be a poor commercial proposal. Compare the estimate with the value of the outcome, competitive alternatives, client urgency and your available capacity. If the proposed fee exceeds the client’s budget, change scope, timing or delivery design explicitly. Reducing the price without changing the delivery assumptions reduces margin; it does not make the work cheaper to perform. Record the tradeoff rather than hiding it in the estimate.
06 / FREE AGENCY TOOL
Keep the approved scope attached to the estimate
The final proposal should state what is included, what the client must provide, review rounds, milestones and change handling. Save the calculator output with the estimate so the delivery owner understands the cost assumptions behind the sold fee. During the project, compare actual hours and remaining work with the original model. A new request can then be evaluated against a documented baseline instead of relying on memory.
THE PRACTICAL DETAILS
Questions, answered.
Why can’t I enter a 100% margin?
A positive-cost project cannot have a 100% margin at a finite fee. The calculator accepts targets below 100%.
Is tax added to the result?
No. The output is the project fee before any applicable tax. Quote and invoice tax separately where required.
Can I use a zero margin?
Yes. The calculated fee then equals the direct delivery cost entered, leaving no direct contribution for overhead or profit.
How do I include contingency?
Add a clearly identified allowance to expected hours or direct costs, or model a second higher-cost scenario. Do not count it twice.
Is this a quote I can send automatically?
No. It is a pricing estimate. Use your proposal workflow to define scope, terms, approval and the final commercial offer.