2025 Best Practices Study Summary

PRO FORMA EXPENSES (expressed as a percentage of pro forma net revenues)

AGENCIES WITH REVENUES OF:

<$1.25M $1.25-2.5M $2.5-5M $5-10M $10-25M $25-100M >$100M

Compensation

Payroll Employees

35.0%

38.4%

43.7%

45.6%

48.9%

52.3%

51.9%

"Non-employees" (1099 Prods/outsourced)

1.5%

4.1%

0.6%

3.2%

2.8%

2.3%

2.9%

Total Payroll Benefits Payroll Taxes

36.5%

42.5%

44.3%

48.8%

51.7%

54.5%

54.8%

3.6% 1.0% 2.1% 0.3% 7.0% 0.7% 0.7% 2.1% 3.5% 4.2% 1.1% 3.8% 0.7% 0.2% 0.7% 0.9% 0.6% 1.7% 1.1% 0.1% 0.2% 0.3% 0.2% 1.0% 1.0% 0.3% 1.4% 0.1% 3.9% 66.9% 27.9% 28.2% 16.0% 43.5%

3.1% 1.2% 3.0% 0.2% 7.5% 0.6% 0.6% 1.3% 2.5% 4.2% 0.2% 3.3% 0.6% 0.1% 0.4% 1.1% 0.4% 1.3% 1.2% 0.0% 0.3% 0.4% 0.5% 0.6% 1.6% 0.2% 1.4% 0.8% 4.6% 71.1% 28.9% 29.7% 14.0% 50.0%

3.2% 2.0% 3.2% -0.3% 8.0% 0.8% 0.5% 1.2% 2.6% 3.3% 0.3% 3.1% 0.4% 0.1% 0.6% 0.8% 0.3% 1.3% 0.9% 0.1% 0.3% 0.4% 0.5% 0.7% 1.6% 0.2% 0.7% 0.2% 3.3% 70.8% 29.2% 29.6% 12.5% 52.3%

3.1% 1.8% 3.2% 0.4% 8.5% 0.9% 0.4% 1.0% 2.3% 3.5% 0.3% 2.8% 0.4% 0.1% 0.5% 0.8% 0.3% 1.1% 0.7% 0.1% 0.6% 0.2% 0.3% 0.4% 1.5% 0.2% 0.7% 0.3% 3.1% 74.5% 25.5% 28.1% 11.8% 57.3%

3.2% 1.5% 3.1% 0.2% 8.0% 1.0% 0.4% 0.8% 2.2% 3.0% 0.2% 3.1% 0.3% 0.1% 0.3% 0.7% 0.4% 1.0% 0.9% 0.1% 1.2% 0.3% 0.4% 0.6% 1.5% 0.1% 1.2% 1.0% 4.4% 78.3% 21.7% 24.9% 12.0% 59.8%

3.1% 1.8% 3.7% 0.3% 8.8% 1.4% 0.4% 1.0% 2.8% 2.9% 0.2% 3.0% 0.3% 0.1% 0.2% 0.5% 0.3% 1.0% 0.9% 0.1% 1.4% 0.3% 0.5% 0.6% 2.0% 0.1% 1.0% 0.4% 4.0% 81.7% 18.3% 22.3% 11.6% 63.4%

2.8% 1.3% 3.3% 0.2% 7.7% 1.8% 0.3% 1.1% 3.2% 2.8% 0.2% 2.9% 0.3% 0.1% 0.2% 0.5% 0.2% 0.9% 1.2% 0.1% 0.8% 0.3% 0.5% 1.0% 2.3% 0.0% 8.5% 1.8%

Retirement Insurance

Other

Total Benefits

Total Compensation

62.5%

Selling Travel and Ent./Conventions

Automobile Expense Advertising/Promotions

Total Selling

Operating Occupancy Expenses 1

Office Equipment Expenses

IT Expenses Telephone

Postage

Supplies/Printing

Dues/Subscriptions/Contributions

Taxes/Licenses

Insurance

Professional Fees

Bad Debts

Outside Services Education/Training

Miscellaneous Total Operating Administrative Depreciation

11.1%

Amortization of Intangibles

Officer Life

Interest

Other

Total Administrative

13.6% 90.5%

TOTAL EXPENSES (PRO FORMA)

PRO FORMA PRE-TAX PROFIT/LOSS

9.5%

PRO FORMA EBITDA 2

23.1%

1 For firms that own their building and reported a much lower than peer expense load, we have normalized their occupancy expense. 2 Pro Forma EBITDA reflects normalized income and expenses after discretionary owner expenses are eliminated; excludes all administrative expenses.

Cross Category Comparison

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