Profit Goals Calculator
Know your numbers. Understand your break-even, your minimum fee per client, and exactly what you need to bill to achieve your profit goals.
Cost to service
Complete this section to calculate a suggested minimum fee. The tool works out the minimum hourly rate you (and your team, if applicable) need to earn to hit your profit goal, then applies that rate, or your own base rate if it's higher, to the hours in your minimum engagement. Leave this section blank to use your break-even floor only.
Take your results with you
Download the PDF report with your numbers and commentary.
The thinking behind the numbers, and how to use this tool to make better business decisions.
About your minimum fee
Setting a minimum fee per client helps ensure that you only take on (and keep) clients who support your financial goals. It's the lowest revenue threshold in terms of client viability, in other words, the minimum revenue you need to generate from each client, every month. Anything less may stop you from achieving your profit and lifestyle goals.
This tool works out your minimum fee in two layers. Your break-even floor is your break-even revenue spread across your clients. A client paying less than this is costing you money to keep. The floor includes no profit and it falls as your client numbers grow, so treat it as a safety net only. Your cost to service minimum is the monthly hours for your minimum engagement, valued at the hourly rate your practice needs to earn to hit your profit goal. Your suggested minimum fee is the higher of the two.
To work out your cost to service, the tool divides the revenue needed to hit your profit goal by the billable hours available across your practice for the year (billable people ร billable hours per week ร working weeks). This gives your minimum hourly rate, the rate every billable hour needs to earn to cover billable staff, fixed costs and your profit goal. If you enter your base bookkeeping rate and it's higher, the tool uses your base rate instead. The tool then multiplies whichever rate applies by the monthly hours for your minimum engagement. Count everyone who does client work, including you, or the minimum hourly rate will come out too high. These rates value your time for the minimum fee and aren't a prompt to charge clients by the hour.
Set your own minimum fee at or above your suggested minimum fee, and expect it to sit below your target average revenue per client, as your larger clients bring the average up.
It's important to understand that your minimum fee isn't the figure you're going to charge your clients, it's the figure that you simply won't go below, ever. And if a client can't (or won't) meet your minimum fee, it's okay to let them go.
Minimum fees are not a 'one size fits all', everyone's will be different based on their business and personal situation and goals. And your minimum fee will change over time as your business, experience, team, clients, and goals evolve.
Once you've determined the fee that's right for you, it must be your non-negotiable. If a client comes along with only a few transactions or a small job, they still need to meet your minimum fee. If they engage you, that's awesome and they see your value. If they don't, let them go as they are too small for you.
How to use this tool
Pull figures from your actual P&L, not estimates. The accuracy of the outputs depends entirely on the accuracy of your inputs.
Your minimum fee isn't a one-time calculation. Revisit it at least every 6 months, and whenever your team, clients, or goals change.
Switch to Scenario Planning to reverse-engineer your goals. Model what changes, e.g. more clients, higher revenue per client, lower variable costs, will get you where you want to be.
Compare each client's current fee against your minimum fee and your target average revenue per client. Anyone below your minimum needs a conversation, a review, a price increase, a scope change, or a graceful exit.
Have the value conversation
Knowing your numbers is half the work. The other half is being able to confidently communicate your value to clients, especially when raising fees or holding the line on your minimum.
For the full framework on having value-led pricing conversations with clients, see the Value Conversations Workbook and Fixed Fee Pricing resources in The Bookkeeper's Academy member portal.
