01 / FREE AGENCY TOOL
Start with the economics of one month
Enter the retainer revenue and direct expenses for the same month. The calculator reserves the target margin first, then divides the remaining labor budget by an average hourly delivery cost. This creates an economic ceiling, not a promise that every hour should be sold or scheduled. A retainer may also need capacity held for unpredictable requests, management attention or a response-time commitment that has value even when the client submits less work.
02 / FREE AGENCY TOOL
Account for the actual team mix
A blended cost rate works when the delivery mix is reasonably stable. A month dominated by senior strategy or specialist production can cost more than a month of routine execution, even at the same hour total. If roles vary materially, model separate service packages or use a weighted average from the proposed staffing plan. Keep contractor charges and paid tools in either labor or direct expenses, without placing the same cost in both.
03 / FREE AGENCY TOOL
Work through a concrete example
The prefilled example is a planning scenario, not a customer result. Monthly retainer fee: $5,000; Average hourly delivery cost: 50 $/hour; Monthly direct expenses: $0; Target direct margin: 40 %. 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 budget = monthly fee × (1 − margin). Affordable hours = (delivery budget − direct expenses) ÷ hourly cost.
| Result | Example output |
|---|---|
| Affordable delivery hours | 60 |
| Total direct cost budget | $3,000.00 |
| Labor budget after expenses | $3,000.00 |
| Target direct profit | $2,000.00 |
04 / FREE AGENCY TOOL
Turn affordable hours into a service agreement
The client does not need to buy a spreadsheet of hours for the agency to have an internal capacity budget. Define outcomes, deliverables, review rounds, responsibilities and turnaround expectations. Explain how new requests are prioritized and what requires additional approval. A capped allowance can be explicit, but outcome-based retainers also benefit from internal limits. Unlimited wording paired with a fixed fee creates an open-ended obligation that this calculation cannot make safe.
05 / FREE AGENCY TOOL
Review usage without rewarding inefficiency
Compare actual delivery cost with the retainer budget, then examine what caused any variance. More hours may mean valuable extra work, avoidable rework or an inefficient process. Fewer hours may mean a repeatable service improved, or that the client is disengaged and not receiving the intended outcome. Pair the financial review with deliverable quality, agreed results and the health of the relationship before changing the package or staffing.
06 / FREE AGENCY TOOL
Plan how unused and excess work behaves
Decide whether unused capacity expires, rolls forward within a cap or has no contractual hour entitlement at all. Unbounded rollover creates future delivery obligations that can overwhelm later months. When a client exceeds the agreed scope, use a documented change request, a separate project or a revised package. Save the monthly model with the review notes so that renewals reflect observed delivery rather than the original sales estimate alone.
THE PRACTICAL DETAILS
Questions, answered.
Is the output a client-facing hour allowance?
Only if that is how you choose to structure the agreement. It is primarily an internal economic planning limit.
What happens if expenses exceed the budget?
The tool shows zero affordable delivery hours and a warning. The target margin is not achievable with those inputs.
Does it include unused-hour rollover?
No. Model any carried obligation in the delivery plan and contract; rollover can materially change future capacity.
Should I use the hourly selling rate?
No. Enter hourly delivery cost. Using the selling rate would mix revenue pricing with the cost budget.
Can I review several retainers together?
Calculate each agreement first so one healthy account does not hide an unprofitable one, then combine staffing needs in a capacity plan.