Overview TL;DR Walkthrough Decision Guide Calibration Notes Discovery First Theory Decision Cards Small Agency Version

Agency Pricing Risk Calculator | CAPM for Agencies

Two-layer risk assessment with scoring and calculators, plus a B Corp impact overlay.

What is CAPM? CAPM is a finance model for matching return to risk. Here it's adapted to help agencies separate portfolio risk from deal risk, set minimum margins, and make clearer go/no-go decisions.

Where to start: Enterprise and international agencies can often start more naturally with the pure portfolio-level approach, because their risk exposure tracks macro conditions more directly. Small and mid-sized agencies will usually start with the hybrid model, where engagement-specific risk is folded into pricing governance.

Smaller-agency option: if you want a simpler guided version first, open the Small Agency Version. It walks through the questions one at a time and ends with the same kind of hurdle, chart, and recommendation.

These decision cards use CAPM as pricing governance, not as a statistically exact pricing engine. For a fuller plain-language explanation, start with the overview. If you want one concrete example first, open the walkthrough.

Reading order: Most people should start with the Overview → TL;DR → Walkthrough → Decision Guide → and end up here at the Decision Cards. If you want to dig deeper into the math, see the Calibration Notes and the Theory. If you want a simpler guided alternative to the Decision Cards, use the Small Agency Version.

Known limits: this is a decision tool, not an exact pricing model. The scores and thresholds are judgment-based, so treat the outputs as guidance, not science.

Start here
Enterprise / Global Agency Begin with Layer 1 for the portfolio-level view, then continue to Layer 2 for the current deal. Small or Mid-Sized Agency Begin with Layer 2 for the practical go/no-go workflow, then refine it with Layer 1 when needed. B Corp / Mission-Driven Agency Work through Layer 1 and Layer 2 first, then use Layer 3 for the impact-adjusted decision.
Workflow: Use retrospective mode for completed projects when you want to compare the original hurdle with the actual outcome.
Jump to card below: Layer 1 Layer 2 Layer 3 Complete any full layer to enable export.
Layer 1

Systematic Risk Calibration

Quarterly / on market shift

Who: Leadership, finance, and senior technical staff.
When: Periodically — quarterly, or when market conditions shift materially.
Best fit: Most natural for enterprise and international agencies using the pure approach, but still useful for any agency that wants a disciplined portfolio view.
Output: Current risk premium and systematic adjustment factor that sets the environment for all engagement-level scoring.

How this card feeds the others
Layer 1 → Layer 2 → Layer 3

Set the current environment here first when you want a portfolio view. Its adjustment factor feeds Layer 2 and carries forward into Layer 3.

PESTLE lens: PESTLE stands for political, economic, social, technological, legal, and environmental factors. These six factors compress macro PESTLE questions into agency-usable scoring prompts. Political and legal shifts mostly sit in regulatory exposure, technological change shows up in platform stability and rate pressure, and concentration remains the small-agency proxy for systematic exposure.

Systematic Risk Scoring
Factor 1 2 3 4 5
Platform Stability
Licensing, governance, ecosystem health
Stable
Mixed
Crisis
Talent Market
Availability and cost of delivery skills
Ample
Tight
Acute
Economic Conditions
Client budget health across your market
Growing
Flat
Contracting
Regulatory Exposure
Compliance mandates affecting deliverables
Calm
Adapting
Major
Revenue Concentration
Client, channel, or vertical dependency
Diverse
Moderate
>30%
Rate Pressure
Market-wide compression on rate card
Rising
Flat
Compressing
Systematic Adjustment Factor
Composite Score: — / 30 → Adjustment Factor: —
Composite
?
The total Layer 1 score across all six systematic-risk factors. It sets the current portfolio environment before any specific deal is evaluated.
 — of 30
Adjustment Factor
?
The Layer 1 score mapped into a pricing multiplier. In the current calibration, 6 maps to 0.85, 18 maps to 1.00, and 30 maps to 1.15.
 — score all factors
Portfolio / Pure approach: Use this factor (—) as your portfolio-wide β in the CAPM formula.
Engagement / Hybrid approach: Use this factor (—) to weight each engagement's beta in Layer Two.
Layer 2

Engagement Risk Scoring

Per engagement / presales

Who: Solutions team, project managers, senior developers, account managers.
When: During presales or discovery for each engagement.
Best fit: Usually the practical starting point for small and mid-sized agencies, where one difficult deal can still be a portfolio-level event.
What: Combine systematic and engagement-specific risk for heuristic pricing governance.
Output: Engagement risk index (pure) or blended β (hybrid), feeding the CAPM minimum margin and a comparison against the proposed deal margin.

Card dependency
Layer 1 factor in → Layer 2 hurdle out → Layer 3 overlay

This is the main deal-level decision card. Small and mid-sized agencies can start here with defaults; Layer 1 sharpens the hurdle, and Layer 3 only matters after the financial hurdle is clear.

Original Presales Baseline
The Layer 2 scores and commercial inputs below remain visible as reference. In retrospective mode they stay frozen unless you explicitly unlock them and refresh the snapshot.
Engagement Risk Scoring
Factor 1 2 3 4 5
Client Track Record
Relationship history and reliability
Long-term
Repeat
New, vetted
Unvetted
Red flags
Scope Clarity
How well-defined are requirements
Detailed
Outlined
Partial
Vague
Undefined
Technical Complexity
Stack familiarity and unknowns
Standard
Minor
Some new
R&D
Experimental
Internal Capacity
Team bandwidth and availability
Dedicated
Comfortable
Tight
Stretched
Over
Contract Type
Risk allocation in contract structure
T&M
Capped
Hybrid
Fixed+pad
Fixed tight
Political Complexity
Stakeholder alignment and authority
Single
Small
Committee
Multi-org
Adversarial
Timeline Pressure
Deadline flexibility and driver
Flexible
Reasonable
Firm
Aggressive
Immovable
CAPM Decision Calculator
%
%
$
$
Hybrid: E(R) = Rf + (Engagement β × L1 Factor) × (Rm − Rf). Compare the proposed margin to E(R).
Engagement Score
?
The total Layer 2 score across the seven deal-level risk factors. In the hybrid model it becomes the starting point for engagement beta.
 — of 35
Engagement β
?
The Layer 2 score normalized into a deal-level beta coefficient by dividing the engagement score by 21.
 — score / 21
Blended β
?
The engagement beta weighted by the current Layer 1 adjustment factor. This is the beta used in the hybrid hurdle calculation.
 — × L1 factor
Required Margin E(R)
?
The minimum acceptable margin implied by the current CAPM inputs and scores. The deal should clear this hurdle to justify the risk.
 — required return
Proposed Margin
?
The margin implied by the current deal price and estimated delivery cost. This is the number being tested against the CAPM hurdle.
 — enter price and cost
Margin Gap
?
The difference between the proposed margin and the required margin. Positive means the deal clears the hurdle; negative means it falls short.
 — proposed - required
Price Floor
?
The minimum quoted deal price needed to reach the current required margin, given the estimated delivery cost. It is a percentage-margin floor only, not proof that the deal has enough absolute gross profit dollars to be worth doing.
 — margin floor only
Display note: live values use 0.1% steps so small changes stay visible. Treat them as directional thresholds for pricing governance, not as exact forecasts.
The Line
CAPM line chart Shows the minimum acceptable margin line and the current engagement's position against it.
Score all Layer 2 factors and enter the Layer 1 factor to plot the engagement against the hurdle.
How to read it: the line is the minimum acceptable margin at each level of risk. If your deal plots above that hurdle, the economics clear. If it falls below the line, reprice, reduce risk, sell discovery, or decline the work.
Pure approach: Use the engagement score (— of 35) as a risk index to size per-project contingency. The implied portfolio-wide minimum margin is —: E(R) = Rf + L1 Factor × (Rm − Rf), and the proposed deal margin should still be checked against that hurdle.
Hybrid approach: Blended β = (Engagement Score / 21) × L1 Factor. This feeds directly into the CAPM formula for a per-engagement minimum margin.
Governance note: This hybrid calculator is a heuristic decision tool, not a statistically correct pricing engine. Its main value is internal alignment, presales discipline, and postmortem calibration.
B Corp

Impact-Adjusted CAPM

Stakeholder governance overlay

For B Corp and mission-driven agencies. This card extends Layers 1 and 2 with B Lab-aligned impact dimensions — portfolio mission fit, customer stewardship, environmental readiness, stakeholder governance, human rights, and mission drift — then computes an impact-adjusted minimum margin. Scores from the standard cards flow in automatically.

Card dependency
Layer 1 + Layer 2 → Layer 3 overlay

Use this only after the standard financial hurdle is clear enough to discuss. Layer 3 adjusts Layers 1 and 2 for mission alignment or harm; it does not replace them.

B Corp Systematic Risk (extends Layer 1)
Factor 1 2 3 4 5
Client Portfolio Alignment
Mission fit across the client base
Aligned
Mixed
Misaligned
Customer Stewardship Readiness
Privacy, security, quality, and feedback systems
Embedded
Partial
Weak
Environmental Stewardship Readiness
Environmental stewardship policies and client screening
Embedded
Partial
Weak
Stakeholder Governance Readiness
Stakeholder-governance policies, accountability, and oversight
Embedded
Partial
Weak
Human Rights Due Diligence
B Lab Human Rights standards
Mature
Partial
Major gaps
Purpose Drift Pressure
Pressure against public purpose
Aligned
Strained
Survival
B Corp Engagement Factors (extends Layer 2)
Factor 1 2 3 4 5
Mission Alignment
Does this engagement advance your purpose?
Core
Aligned
Neutral
Tension
Contradicts
Human Rights Risk
Potential harm in client work or value chain
Low
Managed
Neutral
Elevated
Severe
Environmental Impact & Circularity
Environmental footprint of the deliverable
Regenerative
Light
Neutral
Heavy
Extractive
Responsible Marketing & Transparency
Truthful claims and impact communications
Clear
Sound
Neutral
Aggressive
Misleading
Impact-Adjusted CAPM Calculator
%
B Corp: E(R*) = E(R) + Impact Adjustment — score all factors to calculate
Portfolio Impact Score
?
The total score from the B Corp portfolio factors. It widens or narrows the range of possible discounts and premiums.
 — of 30
Engagement Impact Score
?
The total score from the B Corp engagement factors. It drives the mission discount or harm premium for the specific deal.
 — of 20
Impact Adjustment
?
The net adjustment applied to the standard hurdle after combining the B Corp portfolio and engagement scores.
 — % points
E(R*) Min. Margin
?
The final B Corp hurdle rate after applying the impact adjustment to the standard financial hurdle.
 — impact-adjusted
Display note: these values also use 0.1% steps so mission-driven adjustments remain visible. Read them as governance guidance, not as exact science.
Impact Shift
B Corp impact-adjusted chart Shows the shift from the standard CAPM hurdle to the B Corp impact-adjusted hurdle for the current engagement.
Score the B Corp factors to show how the impact adjustment shifts the hurdle from E(R) to E(R*).
How the impact adjustment works: B Corp engagement scores below the midpoint (mission-aligned, low-harm, transparent work) produce a negative adjustment — a "mission discount" that lowers the financial margin threshold. Scores above the midpoint (mission tension, elevated human-rights or environmental risk, misleading claims) produce a positive adjustment — a "harm premium" that raises the hurdle rate. The B Corp portfolio score widens or narrows that effect around a neutral midpoint instead of amplifying it by default. In the current calibration, each engagement point away from the midpoint is worth about one margin point before the portfolio modifier is applied. Use the manual override to set a conscious, documented impact adjustment for board-level decisions.
Download Printable Decision Cards
Standard Cards (PDF) Layer 1 Only Layer 2 Only B Corp Only

Scores are interactive in the browser. PDFs are printable reference cards.