2003 Best Practices Study

Analysis of Agencies with Revenues Less Than $500,000

EXPENSE ANALYSIS (as % of Net Revenues)

Average

+25% Profit

+25% Growth

Compensation Expense Total Payroll

41.5%

28.3%

36.0%

Benefits

6.9%

5.0%

4.6%

Total Compensation

48.4%

33.3%

40.6%

Selling Expenses

T & E/Conventions

1.7% 2.0% 2.5% 6.2% 4.7% 2.1% 1.1% 2.0% 1.3% 1.3% 1.9% 0.9% 0.8% 0.1% 0.5% 2.7% 0.5% 0.6% 0.7% 2.3% 0.2% 1.2% 0.2% 4.4% 20.5% 79.5% 20.5%

1.0% 2.5% 1.6% 5.0% 3.6% 1.9% 0.9% 1.9% 1.0% 0.8% 1.1% 0.5% 0.2% 0.0% 0.1% 1.5% 0.1% 0.4% 2.0% 1.8% 0.2% 0.4% 0.5% 4.9% 14.0% 57.2% 42.8%

1.1% 2.4% 2.1% 5.6% 3.9% 1.9% 0.8% 2.3% 1.3% 2.3% 2.3% 1.1% 1.0% 0.1% 0.9% 1.8% 0.7% 0.4% 1.4% 2.2% 0.1% 0.2% 0.5% 4.5% 20.9% 71.5% 28.5%

Automobile

Advertising/Promotions

Total Selling

Operating Expenses Occupancy

Telephone

Postage

Supplies/Printing

Dues/Subscriptions/Contributions

Taxes/Licenses

Insurance

Professional Fees Equip Rental/Maint

Bad Debts

Outside Services Data Processing Education/Training

Miscellaneous

Total Operating

Administrative Expenses Amortization

Depreciation Officer Life

Interest

Other

Total Administrative

Total Expenses Pre-Tax Profit

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% % Net Revenue

Compensation

Selling

Operating

Adminstrative

Average +25% Profit

+25% Growth

Information Technology Expense (as % of Net Revenues)

Average

+25% Profit

+25% Growth

Total IT Expense for Fiscal Yr (1)

3.1%

2.0%

2.6%

(1) Includes hardware/software leasing, supplies, maintenance & maintenance contracts, training, data communications, website development/maintenance, computer depreciation, and software amortization

Page 14 2003 Best Practices Study