Free calculator for web agency owners
How many projects does a web design agency need to break even?
A web agency's team and tools cost the same every month. Each project brings revenue and some contractor and tool cost. Break-even is the number of average projects a month that covers the fixed side.
Break-even point
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projects 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 web design agency. Replace them with yours.
The worked example
Each project brings in $14,000 and costs $4,500 to serve. That leaves $9,500 toward fixed costs of $26,000 a month. Divide one by the other and you need 3 projects a month to break even. Every project past that adds $9,500 to profit.
Ways to lower break-even in a web design agency
- Sell a care plan with every launch, so recurring revenue covers part of the fixed costs.
- Bill scope changes as they happen.
- Raise prices on the project types that always run over.
Get this worked out on your own numbers
Kestrel CFO sends agency owners a written review and a 12-month forecast every month. No calls. $990 a month.