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2007 Best Practices Study | Appendix
2007 Best Practices Study
Appendix
Insurance
Carriers
Technology
Service
Staff Info
Producer
Info
Employee
Overview
Financial
Stability
Revenues/
Expenses
Executive
Perspectives
Profile
42. Telephone – Local & long distance, cellular telephone, and fax expenses.
(Excludes leased telephone equipment;
included under Office Equipment)
43. Postage – Postage, Express mail, FedEx, UPS, courier services
(Excludes postage meter lease/maintenance;
included under Office Equipment)
44. Supplies / Printing – Office supplies, paper, copying/printing, coffee/soft drinks/break room expenses
45. Dues / Subscriptions/ Contributions – Professional dues/membership fees, periodical & information services
subscriptions, contributions
46. Taxes / Licenses – Miscellaneous local & franchise taxes, sales tax, other property taxes, license fees.
(Excludes
property taxes entered under Occupancy, payroll taxes, & state/federal income taxes)
47. Insurance – All property & casualty insurance including employee auto insurance, and any payments for E&O
claims /settlements
48. Professional Fees – Expenses for CPAs, lawyers, consultants and other outside advisors
(Excludes directors’ fee
included in Administrative-Other)
49. Bad Debts – Any bad debts written off, claims paid
(Excludes E&O claims/settlements)
50. Outside Services – MVRs, bank fees, employment fees, moving expenses and all other outside service expense
51. Education / Training – Registration fees, materials, in-house training programs, etc.
(Excludes training on how to
use your agency management system or other agency technology)
52. Miscellaneous – Other miscellaneous operating expenses not included elsewhere
53. Total Operating – The sum of items 35, 38, 41-52
Administrative
54. Amortization of Intangibles – Acquired expirations, covenants, non-competes, etc.
55. Officer Life – Premium paid by agency, agency is beneficiary
56. Interest – All interest expense incurred
57. Other — Director’s fees, overhead allocations to parent companies, deferred compensation, and any other
miscellaneous administrative expenses
58. Total Administrative – The sum of items 54-57
59. Total Expenses – The sum of 26, 32, 53, & 58
PROFITABILITY
60. Pretax Profit / Loss — Net revenues minus total expenses.
61. EBITDA – (Earnings Before Interest, Taxes, Depreciation, and Amortization) The agency’s profit before interest,
taxes, depreciation and amortization expenses are included. The sum of items 29, 34, 37, 40, 54, 56, and 60.
62. Pro Forma Pretax Profit –The agency’s profit if all “discretionary” expenditures made for the benefit of the
owners, based solely on ownership, were removed and all extraordinary / non-reoccurring expenses or revenues
were normalized.
63. Operating Pre-Tax Profit - Pretax profit minus contingents, bonus and investment income.
64. Pro Forma EBITDA – See items 61 (EBITDA) and 63 (Pro Forma Pretax Profit).
65. “Rule of 20” Score – a new valuation metric developed by Reagan Consulting that is the sum of the agency’s pro
forma EBITDA margin times 50% plus the organic revenue growth rate.