2016 BPS Study

Cross Category Comparison Detailed Data for All Revenue Categories

RULE OF 20

AGENCIES WITH REVENUES OF:

<$1.25M $1.25‐$2.5M $2.5‐$5M $5‐$10M $10‐$25M >$25M

The Rule of 20: Low

4.7

2.6

‐17.4 21.9 32.4 43.4

1.7

5.5

‐15.1 17.4 26.2 43.1

Average

20.0 30.2 34.8

19.6 28.8 40.1

20.3 33.3 45.1

20.0 31.6 53.7

Top Quartile

High

The Rule of 20 measures an agency's shareholder returns. It is calculated by adding 50% of an agency's Pro Forma EBITDA margin  to its organic commission and fee growth rate.  An outcome of 20 or higher means an agency is likely generating, through profit  distributions and / or share price appreciation, a shareholder return of approximately 15% ‐ 17%, a typical agency / brokerage  return under normal market conditions.

Rule of 20

33.3 

32.4 

31.6 

30.2 

28.8 

26.2 

21.9

20.3

20.0

20.0

19.6

17.4

< $1.25M $1.25M‐$2.5M $2.5M‐$5.0M $5.0M‐$10.0M $10.0M‐$25.0M > $25.0M

Average Top Quartile

63