2002 Best Practices Study

Analysis of Agencies with Revenues Between $500,000 and $1,250,000

EXPENSE ANALYSIS (as % of Net Revenues)

Average

+25% Profit

+25% Growth

Compensation Expense Total Payroll

51.4%

50.7%

51.1%

Benefits

8.0%

6.7%

7.2%

Total Compensation

59.5%

57.4%

58.2%

Selling Expenses

T & E/Conventions

1.2% 1.4% 1.6% 4.3% 4.6% 1.7% 1.0% 1.4% 1.0% 0.7% 1.7% 0.8% 0.7% 0.1% 0.5% 1.8% 0.4% 1.7% 0.9% 1.5% 0.2% 1.7% 0.1% 4.3% 18.1% 86.1% 13.9%

0.9% 1.4% 1.0% 3.4% 2.5% 1.6% 0.8% 1.3% 0.6% 1.2% 1.6% 0.5% 0.5% 0.1% 0.4% 1.3% 0.4% 0.1%

0.5% 1.6% 2.0% 4.0% 4.7% 1.5% 0.9% 1.2% 0.8% 1.2% 1.7% 0.5% 0.3% 0.0% 0.1% 1.7% 0.6% 5.3%

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

12.9%

20.5%

Administrative Expenses Amortization

-4.0% 1.9% 0.4% 1.2% 0.2% -0.4% 73.3% 26.7%

-2.9% 1.6% 0.1% 0.3% 0.2% -0.7% 82.0% 18.0%

Depreciation Officer Life

Interest

Other

Total Administrative

Total Expenses Pre-Tax Profit

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

2.3%

1.5%

2.0%

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

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