Include coordination, inspections, customer service, and expected rework when those costs are yours.
Try this with your own numbersFormula and worked example
Margin = (quote − subcontract charge − coordination cost) / quote × 100
| Input | Example |
|---|---|
| Customer quote | 3,000 |
| Subcontract charge | 2,000 |
| Internal coordination cost | 250 |
| Calculated result | 25 % |
Choose reliable inputs
Include software licences, delivery time, revisions and ongoing support when costing a project. For this software agency calculation, use project time logs, licence invoices and retainer scopes and a consistent definition of one project.
- Engineering: include the portion belonging to this project or reporting period, and record where the value came from.
- Review: include the portion belonging to this project or reporting period, and record where the value came from.
- Project management: include the portion belonging to this project or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Is the subcontract invoice my total delivery cost?
Include coordination, inspections, customer service, and expected rework when those costs are yours.
Only entered costs are counted; warranty and rework costs may require an allowance.
What if this input changes?
If customer quote rises by 10%, this example changes by 6.8182 %. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.