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Client Lifetime Value Calculator

LTV:CAC below 1× means you're paying to acquire clients who don't pay back. Enter your numbers to see the health rating, payback period, referral bonus, and a retention sensitivity table.

Corp Tax Rate21%(federal flat rate)

SE Threshold$400(net earnings floor)

FICA Cap 2024$168,600(SS wage base)

Client economics

Avg Monthly Revenue / Client

What a typical client pays you per month

Gross Margin

Revenue minus direct costs (subcontractors, tools, etc.)

Avg Client Retention

How many months a typical client stays

Customer Acquisition Cost (CAC)

Marketing, outreach, sales time to land one client

Referral Rate

% of clients who refer at least one new client

Avg Referrals per Referrer

How many referrals a referring client typically sends

Gross LTV$20KLifetime gross profit

Net LTV$19KAfter acquisition cost

LTV:CAC24.4xTarget: 3× or higher

Payback Period0.5 moMonths to recover CAC

Excellent24.4x LTV:CAC

LTV:CAC above 5x — strong unit economics. Each new client generates well over 5× their acquisition cost. Scale confidently.

Lifetime revenue breakdown per client

Total Revenue

$30K

Direct Costs

$11K

Gross Profit (LTV)

$20K

Referral Bonus

$2K

Referral-adjusted LTV: $21K(20% referral rate × 1 avg referrals)

How retention affects LTV

Scenario	Retention	Gross LTV	Net LTV	LTV:CAC
−50% retention	6.0 mo	$10K	$9K	12.2x
−25% retention	9.0 mo	$15K	$14K	18.3x
Current	12.0 mo	$20K	$19K	24.4x
+25% retention	15.0 mo	$24K	$24K	30.5x
+50% retention	18.0 mo	$29K	$28K	36.6x

Monthly Gross Profit per Client

Monthly Profit = Avg Monthly Revenue × Gross Margin %

$3K × 65%

= $2K

Gross margin strips out direct service costs — subcontractors, tools, time. It's the profit that survives before overhead.

Gross LTV

LTV = Monthly Profit × Avg Retention (months)

$2K × 12 months

= $20K

This is the total profit a single client generates over their lifetime — before subtracting what it cost to acquire them.

Net LTV (after CAC)

Net LTV = Gross LTV − Customer Acquisition Cost

$20K − $800

= $19K

LTV:CAC Ratio

Ratio = LTV ÷ CAC

$20K ÷ $800

= 24.4x — target: 3×+

Below 3× means you're spending too much to acquire clients relative to what they return. Below 1× is unsustainable.

Referral-Adjusted LTV

Bonus = LTV × referral_rate × avg_referrals × 0.5

$20K × 20% × 1 × 50%

= +$2K → $21K adjusted LTV

Referrals multiply your LTV. 50% discount accounts for the fact that referred clients may have shorter average retention.

Key insight

LTV:CAC is the most important number in any service business. At 3×, you're sustainable. At 5×+, you can afford to invest in growth. Below 1×, every new client costs you money.

Use this result in →

Break-Even Calculator →Profit Margin →Rate Negotiation →

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