Price Before You Plan
This project adapts the Capital Asset Pricing Model (CAPM) into an agency pricing risk framework. Our interactive decision cards work like an agency pricing calculator for scoring portfolio and project risk before a deal is accepted.
The intended meaning of "Price before you plan" is narrower than it sounds. Price before delivery planning is committed, not before you've done enough technical assessment to judge complexity, client concerns, and whether implementation or discovery is the thing to sell.
The hybrid layer should be read as heuristic pricing governance, not as a statistically correct asset-pricing engine. In practice it works as a presales pricing tool: set the hurdle, compare the quoted margin, and make a clearer call.
Smaller agency? Start with the Small Agency Version if you want the pricing questions one at a time first, then move into the full Decision Cards when you need the broader model.
Two Good Starting Points
Enterprise and global agencies will usually see the cleanest fit in the pure approach, where systematic risk is treated at the portfolio level, and engagement risk is handled separately through contingency, structure, and governance.
Small and mid-sized agencies will usually get more immediate value from the hybrid approach, because a single difficult client, scope failure, or delivery crunch can land like a portfolio-level event.
What This Model Is Borrowing from Finance
CAPM comes from finance, where it is used to answer a simple question: what level of return is worth a given level of risk? In investing, it helps set required return and hurdle rates, the minimum return an investment should clear before it is worth doing, and it can also inform the discount rate used to value future cash flows. In agency work, the same logic helps you separate market-wide risk from deal-specific risk, set a minimum acceptable margin, and decide whether a project is worth taking on at all.
If you want a simple finance-side explainer before diving deeper, this CAPM overview from McCracken Alliance is a useful primer.
Three Layers of Use
- Layer 1 scores portfolio-wide systematic conditions that shape the pricing environment across the whole book of business.
- Layer 2 scores deal-level uncertainty, then compares the proposed deal margin against a required hurdle rate.
- The B Corp card adds impact-oriented governance factors so mission-aligned or harmful work is treated explicitly, not hand-waved.
Start Short, Then Go Deeper
Short Overview
The fastest way to understand the thesis: price the work before you plan it, meaning before delivery planning is committed, and compare the real deal margin against the hurdle.
Open the TL;DRWalkthrough
One realistic agency deal, scored from first-pass defaults through to a go/no-go verdict.
Open the WalkthroughDecision Guide
A compact guide for running the model in practice with baselines, scoring, proposed margin, and decision thresholds.
Open the Decision GuideDecision Cards
The live tool. Use it after the TL;DR, walkthrough, or guide when you want to score an actual deal.
Open the Decision CardsCalibration Notes
The implementation detail page: current thresholds, midpoint choices, and sanity-test scenarios.
Read the Calibration NotesDiscovery First
A companion essay on why discovery may be the thing to price before implementation, not a side topic after pricing.
Read why discovery comes firstTheory and Background
The longer theory text with the full argument, assumptions, worked examples, caveats, and B Corp extension.
TheorySmall Agency Version
A simpler guided path for smaller agencies that want the pricing questions one at a time before or instead of using the full Decision Cards.
Open the Small Agency VersionGovernance, Not Precision
The numbers matter, but the governance effect matters more.
The short overview is the right first read for most people. The longer theory text is there for determined readers who want the deeper argument, its assumptions, the math, some cool line charts, and a little economics history. There's also a section exploring how CAPM can be adapted for B Corp agencies using concepts from B Lab Standards and the B Impact Assessment (BIA). Keep in mind this is all very experimental — it's just in Beta release. 😁
Where the Model Is Most Vulnerable
The pure approach stays closer to financial CAPM. The hybrid approach does not. In the hybrid cards, β (Beta) is a scored managerial judgment rather than a measured relationship to the wider market. That makes the model useful for governance, but it also means the numbers come from chosen settings, not natural laws.
The current design is intentionally conservative: it uses midpoint-anchored scoring, additive factor sums, and one-decimal outputs to keep the tool usable in presales. That also means it can understate compounding tail risk, overstate visual precision, and rely on analogies like Agency Rf (your baseline margin from lower-risk recurring work) that are helpful but not literal. The theory text makes those trade-offs explicit.