Care plan margins: the math behind a 70% gross margin
A care plan business lives or dies on the gap between what you charge and what delivery costs. Here is how to model it, and what breaks it.
Agencies tend to judge a care plan by its revenue. “We have 20 sites at $150, that’s $3,000 a month.” That number is nice to say but tells you nothing. What matters is what is left after the work is done.
Here is a simple model for care plan margin, two ways of running delivery, and the three things that quietly destroy the margin.
The model
Three inputs:
- S = number of sites on a plan
- P = average monthly price per site
- C = monthly cost of delivery
Monthly gross profit is S × P − C. Gross margin is that divided by S × P.
The whole game is making C grow slower than S × P.
Delivery option 1: in-house
If a team member handles care plan work, your cost is their time. Be honest about it. In our experience it averages 1.5 to 2.5 hours per site per month once you include updates, the occasional broken layout, content edits, and replying to the client.
At a fully loaded cost of $45 an hour, that is $70 to $110 per site per month. On a $150 plan you are making $40 to $80 a site. On a $99 plan you are roughly breaking even, and you are spending your most expensive attention on your least expensive product.
The hidden problem is not the hours. It is that the cost scales one-to-one with sites. Twenty more sites means forty more hours. There is no leverage.
Delivery option 2: a flat retainer
A white-label retainer replaces per-site cost with a flat monthly fee that covers every site you add, up to the plan’s daily capacity.
Take a mid-tier retainer at $1,499 a month and a $199 plan:
| Sites | Revenue | Retainer | Gross profit | Margin |
|---|---|---|---|---|
| 5 | $995 | $1,499 | −$504 | — |
| 8 | $1,592 | $1,499 | $93 | 6% |
| 15 | $2,985 | $1,499 | $1,486 | 50% |
| 25 | $4,975 | $1,499 | $3,476 | 70% |
| 30 | $5,970 | $1,499 | $4,471 | 75% |
Break-even is around eight sites. After that, every new site is almost pure margin until you hit the capacity ceiling and move up a tier. At 30 sites you move to the top tier, your cost steps up once, and the curve starts again from a higher base.
This is the shape you want: cost in steps, revenue in a straight line.
What breaks the margin
Underpricing. At $79 a plan, break-even on the same retainer is 19 sites. At $49 it is 31. The price you set is the single biggest lever, and most agencies set it too low. See How to price a WordPress care plan.
Scope creep without a tier change. A client on Essential who emails four times a week is a Professional client paying Essential prices. Review your task volume per site quarterly and move clients up. They will rarely object, because they are already getting the service.
You in the loop. If every ticket passes through your inbox for a rewrite before it goes to the client, you have reintroduced per-site labor. Either let delivery go out white-labeled directly, or accept that your margin includes your time.
Two numbers to watch
Revenue per site. If this is under $150, fix pricing before adding sites.
Sites per retainer tier. If you are consistently over 70% of your daily capacity, you are about to feel it in turnaround. Move up before clients notice.
The compounding part
What the table does not show is what happens over time. Care plan revenue does not reset. Every site you add in March is still paying in December. Agencies that add three plans a month have 36 at year end, and at $199 that is $86,000 a year in revenue that required no new pitch after the first conversation.
That is why the margin matters: it is the margin on a number that only goes up.