Free calculator for agency owners
How many client retainers does a marketing agency need to break even?
An agency's delivery team grows with clients, while leadership, tools and rent stay fixed. Break-even is the number of average retainers that covers the fixed side.
Break-even point
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client retainers a month to cover every cost
Profit at today's level
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per month, before owner pay
Cushion above break-even
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how many you could lose and still cover costs
The starting numbers are an example for a marketing agency. Replace them with yours.
The worked example
Each client retainer brings in $6,000 a month and costs $2,800 to serve. That leaves $3,200 toward fixed costs of $40,000 a month. Divide one by the other and you need 13 client retainers to break even. Every client retainer past that adds $3,200 to profit.
Ways to lower break-even in a marketing agency
- Raise retainer prices for clients who need the most senior time.
- Cut pass-through spend you front for clients. Bill platforms to their cards.
- Keep utilization high before adding headcount.
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