This brief captures the 2022 Best Practices Study profile for the $5M–$10M tier — a genuinely institutional operation with a multi-producer bench, a deep service organization, and a commercial-led book. Every figure here is a segment benchmark; the companion 2022 BPS tier reference explains how the tiers compare, and the year's strategic story is the 2022 context.
§ 01 · ProfitabilityProfitability & the Rule of 20.
A 27.0% Pro Forma EBITDA and a strong 26.5 Rule of 20 — the second-highest composite health score of any tier — even as the compensation load climbs to 57.9% with the larger service organization.
| Metric | Average | Top quartile |
|---|---|---|
| Pro Forma EBITDA margin | 27.0% | 37.7% |
| Pre-tax profit | 23.5% | 38.4% |
| Rule of 20 score | 26.5 | 38.8 |
| Total Pro Forma compensation | 57.9% | — |
§ 02 · Revenue mixRevenue mix.
Commercial lines lead clearly at 54.6%, personal lines recede to 21.7%, and group medical becomes a material line (8.1%) — the diversification that comes with scale.
| Line | % of revenue |
|---|---|
| Commercial lines | 54.6% |
| Personal lines | 21.7% |
| Contingent / bonus | 8.2% |
| Group medical | 8.1% |
| Individual life & health | 0.9% |
Revenue mix, at a glance.
Commercial-led, with group medical now a material line. Bar widths are exact percentages of revenue.
§ 03 · Growth & concentrationGrowth & account concentration.
Strong organic growth with the widest top-quartile in the smaller bands (26.4%), and the lowest account concentration so far (13.5%) — a diversified, scaling book.
| Metric | Average | Top quartile |
|---|---|---|
| Net-revenue organic growth | 8.6% | 26.4% |
| Net-revenue total growth | 8.7% | 25.8% |
| Top-10 accounts (% of commissions) | 13.5% | — |
§ 04 · ProductivityProductivity per person.
About 38.9 staff, with revenue-per-employee at $195,961 — the productivity dividend of scale, with a deep enough bench that no single producer is the agency.
| Metric | Average | Top quartile |
|---|---|---|
| Revenue per employee | $195,961 | $265,579 |
| Spread per employee | $84,432 | $129,988 |
| Total staff (average) | 38.9 | — |
§ 05 · Producer pipeline & stabilityThe pipeline read.
The strongest balance sheet of the bands (2.09 current ratio), but a softening producer success rate (54.2%) — at scale, more hires mean a lower validation rate. The 48.5 weighted-average producer age keeps perpetuation in view.
| Metric | Average | Top quartile |
|---|---|---|
| Weighted-average producer age | 48.5 | — |
| 5-year producer success rate | 54.2% | 92.9% |
| NUPP (% of net revenue) | 1.2% | 2.8% |
| Current ratio | 2.09 | 3.76 |
| Tangible net worth (% of revenue) | 11.3% | 29.1% |
- Commercial-led at scale. CL at 54.6%, with group medical now a material 8.1% line.
- Second-highest Rule of 20. A 26.5 composite score, behind only the profitability-peak tier.
- Strong, wide-dispersed growth. 8.6% average organic, with a 26.4% top quartile.
- Lowest concentration so far. Top-10 accounts at 13.5% of commissions — a diversified book.
- Strongest balance sheet. A 2.09 current ratio — the best of the bands.
- Producer depth, lower success rate. More hires at scale, validated at 54.2% over five years.
The benchmark is the baseline, not the price.
Best Practices benchmarks don't value an agency — they're the operating baseline a valuation is built on. This tier reads as an institutional-quality profile: a 26.5 Rule of 20, a commercial-led book, low concentration (13.5%), and a strong balance sheet. It is exactly the band where scale buyers compete hardest, because the book is large, diversified, and not single-producer-dependent.
The largest single normalization in this band is owner and executive compensation — the add-back to market-rate replacement is what turns reported profit into the Pro Forma EBITDA a buyer prices. The companion financial & transactional mechanics reference walks the full bridge.
What BPS measures. The Best Practices Study tracks the operating and financial results of top-performing agencies nominated and designated through the study, segmented by revenue tier. This brief reflects the $5M–$10M band in the 2022 edition (calendar 2021 results).
Percentages of net revenue. Expense, compensation, and revenue-mix lines are expressed as a percentage of net revenue unless a dollar figure is shown.
Average and top quartile. The average is the segment standard; the top quartile is the aspirational stretch the study reports alongside it.
Frequency. The study publishes annually. Milly Books refreshes this brief with each new edition.