2024 Best Practices Study

AGENCIES WITH REVENUES OF:

AVERAGE

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

Pre-Tax Profit

25.3% 25.5% 26.8% 27.5%

23.3% 24.4% 26.9% 28.8%

24.2% 26.5% 27.1% 30.0%

20.4% 22.5% 23.8% 24.8%

20.1% 21.3% 23.5% 25.8%

14.0% 14.7% 19.9% 21.4%

Pro Forma Pre-Tax Profit

EBITDA

Pro Forma EBITDA 1

AGENCIES WITH REVENUES OF:

TOP QUARTILE

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

Pre-Tax Profit

35.3% 33.6% 36.3% 32.5%

32.0% 33.6% 34.6% 34.4%

34.5% 36.2% 35.9% 38.2%

31.0% 30.8% 31.6% 31.1%

25.7% 28.0% 30.8% 33.0%

21.6% 20.8% 26.2% 26.3%

Pro Forma Pre-Tax Profit

EBITDA

Pro Forma EBITDA 1

1 Pro Forma EBITDA excludes all administrative expenses (depreciation, amortization of intangibles, officer life, interest and other).

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

-11.4 23.4 46.1 31.5

3.8

-3.8 25.5 42.9 32.4

7.2

1.1

-1.2 21.7 45.6 27.0

Average

26.8 47.3 36.0

26.4 45.2 34.0

24.8 41.6 32.4

High

Top Quartile

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

36.0

34.0

32.4

32.4

31.5

27.0

26.9

26.8

26.4

25.5

25.3

24.8

24.5

24.3

23.4

22.4

22.3

21.7

< $1.25M

$1.25-$2.5M

$2.5-$5M

$5-$10M

$10-$25M

> $25M

2023 BPS Average 2024 BPS Average 2024 BPS Top Quartile

Cross Category Comparison

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