2002 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

42.1%

24.8%

37.5%

Benefits

6.7%

5.4%

5.4%

Total Compensation

48.8%

30.2%

42.9%

Selling Expenses

T & E/Conventions

1.5% 2.5% 2.6% 6.6% 5.0% 2.0% 1.1% 1.8% 1.1% 1.5% 1.9% 0.8% 0.9% 0.3% 0.4% 2.0% 0.4% 0.5% 1.2% 1.4% 0.2% 1.6% 0.4% 4.9% 19.7% 80.0% 20.0%

1.2% 2.1% 2.4% 5.7% 2.9% 1.9% 1.0% 2.0% 0.7% 0.6% 1.9% 0.5% 0.6% 0.4% 0.0% 2.8% 0.6% 0.3% 1.6% 0.4% 0.2% 0.6% 0.5% 3.2% 16.0% 55.1% 44.9%

1.6% 3.9% 2.8% 8.3% 5.1% 1.8% 1.1% 1.3% 1.0% 0.6% 2.0% 1.3% 2.2% 0.1% 0.5% 0.8% 0.5% 0.1% 2.2% 0.7% 0.5% 1.4% 0.1% 4.9% 18.3% 74.4% 25.6%

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

10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% % Net Revenue

0.0% 5.0%

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)

3.0%

4.1%

1.5%

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

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