Calculate your agency profit margin

Your agency margins

Example inputs, pre-filled so you can see how it works. They are not typical agency figures: replace every number with your own.

On $10,000 of monthly revenue and $7,100 of costs, your gross margin is 55% and your net margin is 29%, a profit of $2,900 a month. To reach a 40% net margin on these costs you would need $11,833.33 a month, $1,833.33 more (18.3% on today's revenue).

• Gross profit: $10,000 − $4,500 delivery = $5,500, which is 55% of revenue
• Total costs: $4,500 + $600 + $2,000 = $7,100
• Net profit: $10,000 − $7,100 = $2,900, a net margin of 29%
• Markup on cost: 40.8% (profit ÷ costs)
• Revenue needed: $7,100 ÷ (1 − 40%) = $11,833.33
• Per client (5): $2,000 of revenue and $580 of profit a month

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Revenue: $10,000 Delivery cost: $4,500 Gross profit: $5,500 (55%) Total costs: $7,100 Net profit: $2,900 (29%) Revenue needed for 40% net margin: $11,833.33

Margin is profit as a share of revenue; markup is profit as a share of cost, so the two differ. The result only counts what you enter: add your own pay, tax and unpaid hours, or the profit shown is too high. This is arithmetic on your numbers, not a standard for any kind of agency.