Agency pricing: the maths behind a quote that made no sense
Traditional agencies price using a formula of salary and overhead costs multiplied by roughly two to two and a half, then divided by billable hours, which is why quotes for small businesses can run into tens of thousands of pounds a month. A lean, founder-led studio without that overhead structure can price the same work differently.
Ask a traditional agency for a quote on something fairly simple, and there's a decent chance the number that comes back makes you wonder if they misheard the brief.
They didn't. That's just how the maths works out. Most agencies price using a formula: roughly, salary costs plus overheads, multiplied by somewhere between two and two and a half, divided by the hours they can actually bill you for. Even the ones genuinely trying to be reasonable end up needing a big multiplier just to cover their own overheads.
The numbers, plainly: a small operator going through an agency is typically looking at retainers from around £500 to £2,000 a month at the accessible end, up to £15,000 to £50,000-plus a month at the other, while enterprise clients pay £15,000 to well over £100,000 a month for the same kind of relationship a small business needs at a fraction of the scale.
That's not "we do things a bit differently." That's a pricing model built around a client who was never you.
Here's the unglamorous reason a founder-led studio can quote something that doesn't need three zeroes shaving off it before it makes sense: no big office overhead to cover, no account management layer sitting between you and the person doing the work, no multiplier stacked on top of another multiplier. You're not getting a worse version of an agency. You're getting a structure that was actually built for a business your size, not scaled down from one that wasn't.
That doesn't mean everything's cheap. Good work still costs real money. But there's a difference between "this costs what it costs" and "this costs what it costs because you were never the client the pricing model was designed for."
If a previous quote left you wondering whether the number matched the work, that's worth a second opinion, no obligation attached. Get in touch.
Sources
- Agency retainer minimums, the (salary + overhead) × multiplier ÷ billable hours pricing formula, and the small-business-versus-enterprise price gap: Swydo, Agency Pricing in 2026
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