2021 Best Practices Study

Cross Category Comparison

Detailed Data for All Revenue Categories

EBITDA

51.8%

48.1%

41.5%

37.2%

33.7%

29.5%

28.6%

26.4%

25.7%

23.7%

22.4%

17.9%

< $1.25M

$1.25M- $2.5M

$2.5M- $5.0M

$5.0M- $10.0M

$10.0M- $25.0M

> $25.0M

Average Top Quartile

Pro Forma EBITDA

53.9%

48.7%

41.9%

41.0%

34.0%

27.5%

30.7%

29.6%

28.1%

27.5%

23.7%

21.1%

< $1.25M

$1.25M- $2.5M

$2.5M- $5.0M

$5.0M- $10.0M

$10.0M- $25.0M

> $25.0M

Average Top Quartile

Note : 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

-0.2 21.8 44.1 37.9

4.9

-8.2 17.7 45.7 31.4

-0.6 18.6 43.5 32.8

-4.1 15.8 36.4 24.3

3.6

Average

20.2 43.6 32.6

16.0 33.2 23.9

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

37.9

32.8

32.6

31.4

24.3

23.9

23.9

22.6

22.2

21.8

20.4

20.2

18.6

18.4

18.2

17.7

16.0

15.8

< $1.25M

$1.25M-$2.5M $2.5M-$5.0M $5.0M-$10.0M $10.0M-$25.0M

> $25.0M

2020 BPS Average 2021 BPS Average 2021 BPS Top Quartile

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