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Agency Price Estimator

The Agency Price Estimator calculates a minimum selling price from estimated labor, external costs, allocated overhead, and a target profit margin. It is intended for project quotes and scoped engagements where the agency wants a repeatable cost-based starting point.

Enter planned labor hours, a fully loaded internal cost per hour, external project costs, and overhead allocation. Then choose the desired margin on the selling price. The result shows the estimated price, total cost, expected profit, and an equivalent selling rate per labor hour. Market value, risk, urgency, intellectual property, and client willingness to pay may justify a different final quote.

Pricing assumptions

hrs
USD
USD
USD
%
Result
—
Estimated selling price
Total estimated cost—
Expected profit—
Selling rate per hour—

1. Estimate labor hours
Include strategy, production, project management, revisions, and expected coordination time.

2. Enter loaded labor cost
Use internal hourly cost, not the client billing rate.

3. Add external and overhead costs
Include vendors, freelancers, travel, and a reasonable share of agency overhead.

4. Set a target margin
Enter the percentage of the final price intended to remain as profit.

5. Review and adjust the quote
Use the estimate as a floor or reference, then consider scope risk and market value.

Labor cost = Planned hours × Loaded labor cost per hour
Total cost = Labor cost + External costs + Allocated overhead
Selling price = Total cost ÷ (1 − Target margin)

The target margin is profit divided by selling price, not a markup on cost. The calculation assumes the entered scope and hours are realistic and that all pass-through costs are included.

What the result means

The estimated selling price is the amount needed to achieve the selected margin if actual cost matches the estimate.

Scope changes and overruns reduce the realized margin unless the price is adjusted.

Given: 180 hours at $65 loaded cost, $4,500 external cost, $3,000 overhead, and a 30% target margin.

Calculation: Labor cost = 180 × $65 = $11,700. Total cost = $11,700 + $4,500 + $3,000 = $19,200. Price = $19,200 ÷ 0.70 = $27,428.57.

Result: Expected profit is $8,228.57 and the equivalent selling rate is $152.38 per hour.

Why divide by one minus the margin?

Margin is measured against the final selling price. Dividing cost by one minus the target margin produces that relationship.

Should I include sales time?

Include it in overhead or project labor when the pricing policy is intended to recover acquisition effort.

How should contingency be handled?

Add contingency hours or costs before applying the target margin, especially for uncertain scopes.

Can the final price be lower than the estimate?

Yes, but the expected margin will be lower unless costs are also reduced.

How is this different from markup pricing?

Markup applies a percentage to cost; this estimator solves for a profit margin on the selling price.