2003 Best Practices Study

Analysis of Agencies with Revenues Between $2,500,000 and $5,000,000

EXPENSE ANALYSIS (as % of Net Revenues)

Average

+25% Profit

+25% Growth

Compensation Expense Total Payroll

57.3%

52.1%

54.0%

Benefits

8.5%

8.6%

8.5%

Total Compensation

65.8%

60.6%

62.5%

Selling Expenses

T & E/Conventions

1.1% 0.8% 1.3% 3.2% 3.7% 0.9% 0.6% 1.1% 0.8% 0.6% 1.2% 0.8% 0.7% 0.3% 0.4% 1.1% 0.4% 0.7% 1.0% 1.2% 0.3% 0.6% 2.4% 5.4%

1.0% 0.8% 1.2% 2.9% 3.7% 0.8% 0.6% 0.9% 0.6% 0.2% 0.9% 0.5% 0.5% 0.1% 0.4% 1.0% 0.2% 0.5% 0.8% 0.7% 0.3% 0.0% 1.2% 3.0%

0.8% 1.0% 1.4% 3.2% 3.7% 0.8% 0.7% 1.1% 0.5% 0.3% 1.1% 0.8% 0.8% 0.3% 0.2% 1.1% 0.3% 1.0% 0.8% 0.6% 0.2% 0.3% 0.0% 2.0%

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

13.3%

11.0%

12.5%

Administrative Expenses Amortization

Depreciation Officer Life

Interest

Other

Total Administrative

Total Expenses Pre-Tax Profit

87.8% 12.2%

77.6% 22.4%

80.1% 19.9%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% % 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)

1.8%

1.3%

1.3%

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

Page 58 2003 Best Practices Study