How profitable is my agency really?
What does the Profitability calculator do, and who is it for?
See your real project margin after tool and admin costs.
For: Any agency owner
Margin leak finder
See what poor visibility costs your agency
Most agencies lose 15 to 40% of senior capacity to context-switching and unbilled hours. This calculator estimates the annual cost on public benchmarks (APA, Gloria Mark, HBR, Asana). No signup, no data collected.
+What is the calculation?
Switching tax. The American Psychological Association estimates frequent task-switching consumes up to 40% of productive time. We apply that to your senior bench at the rate you choose, over a 35-hour, 50-week year.
Unbilled hours. Industry estimates of uninvoiced billable hours typically sit between 10 and 20%; we use a conservative 12% across the whole team at the same blended rate.
The output is an order-of-magnitude estimate, not a precise audit. Use it to size the problem, not to size a P&L line.
estimated margin leak, per year
- Switching tax
- $350,000
- Unbilled hours
- $315,000
Benchmark sources: American Psychological Association (multitasking switch costs), Gloria Mark / UC Irvine (refocus time), Asana Anatomy of Work Index, Harvard Business Review (2022, app-toggle data).
How this is calculated
The estimate combines the two most-cited invisible costs in agency delivery. Switching tax applies a 40% productivity loss to your senior bench, the figure the American Psychological Association cites for heavy task-switching. Unbilled hours apply a conservative 12% of the whole team's time, the low end of what time-audit studies report.
Both are priced at the blended hourly cost you choose, over a 35-hour, 50-week year. The output is an order-of-magnitude figure to size the problem, not a precise audit line.
Sources
- Multitasking: Switching costsAmerican Psychological AssociationFrequent task-switching can consume up to 40% of productive time.
- The Cost of Interrupted WorkGloria Mark, University of California, IrvineIt takes an average of 23 minutes to refocus after an interruption.
- Anatomy of Work IndexAsanaKnowledge workers lose a large share of the week to duplicated and coordination work.
- 2026 Professional Services Maturity BenchmarkSPI Research (Service Performance Insight)509 firms, 160+ KPIs. Healthy billable utilisation 70%+, project margin 35%+, revenue leakage under 5%.
Frequently asked
What is a good profit margin for an agency?+
Most healthy agencies target a net margin of 20 to 30% and a gross delivery margin above 50%. SPI Research puts a strong project margin at 35% or more.
Why does poor visibility cost money?+
If you cannot see margin as work happens, overruns and unbilled hours only surface at month-end, after the loss is already booked. Live visibility lets you act while a project can still be corrected.
What is the switching tax?+
It is the productivity lost to constant context-switching between tools and projects. The American Psychological Association estimates frequent switching can consume up to 40% of productive time.
Is this the same as my accountant's profit figure?+
No. This is a directional estimate of two specific leaks, not a P&L. Use it to size the opportunity, then confirm the real numbers in your books.
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