2002 Best Practices Study

Analysis of Agencies with Revenues Between $5,000,000 and $10,000,000

EXPENSE ANALYSIS (as % of Net Revenues)

Average

+25% Profit

+25% Growth

Compensation Expense Total Payroll

57.3%

46.6%

54.5%

Benefits

8.2%

6.7%

8.4%

Total Compensation

65.4%

53.3%

62.9%

Selling Expenses

T & E/Conventions

1.3% 0.9% 0.9% 3.2% 3.9% 1.0% 0.7% 1.2% 0.7% 0.4% 1.0% 1.2% 0.5% 0.3% 0.5% 1.0% 0.4% 0.8% 1.1% 2.0% 0.2% 0.9% 0.8% 5.1% 13.6% 87.3% 12.7%

1.5% 1.0% 0.9% 3.3% 3.4% 1.0% 0.7% 0.9% 0.6% 0.4% 0.8% 1.3% 0.5% 0.2% 0.5% 0.9% 0.3% 0.9% 1.5% 1.8% 0.1% 1.4% 0.7% 5.4% 12.3% 74.4% 25.6%

1.3% 0.5% 1.2% 3.0% 3.0% 1.0% 0.6% 1.2% 0.7% 0.5% 0.7% 0.7% 0.5% 0.1% 0.5% 0.7% 0.3% 0.9% 0.6% 1.8% 0.1% 0.6% 0.6% 3.8% 11.4% 81.1% 18.9%

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% 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)

2.0%

1.8%

1.8%

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

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