This brief captures the 2024 Best Practices Study profile for the $1.25M–$2.5M tier — still the study's profitability peak two years on. Read against the 2022 profile to see what held. Every figure here is a segment benchmark; the companion 2024 BPS tier reference explains how the tiers compare, and the year's narrative is the 2024 context.
§ 01 · ProfitabilityProfitability & the Rule of 20.
The peak holds. A 30.9% Pro Forma EBITDA and a 26.9 Rule of 20 — the highest of any band in the 2024 study — on the lightest compensation load (48.6%). This is the band where a small producer bench meets a still-lean cost base.
| Metric | Average | Top quartile |
|---|---|---|
| Pro Forma EBITDA margin | 30.9% | 39.8% |
| Pre-tax profit | 24.4% | 35.5% |
| Rule of 20 score | 26.9 | 34.7 |
| Total Pro Forma compensation | 48.6% | — |
§ 02 · Revenue mixRevenue mix.
Commercial lines lead at 47.6% over personal at 38.3%, with a healthy contingent share — a more durable revenue base than the smallest tier.
| Line | % of revenue |
|---|---|
| Commercial lines | 47.6% |
| Personal lines | 38.3% |
| Contingent / bonus | 8.4% |
| Individual life & health | 2.7% |
| Group medical | 1.6% |
Revenue mix, at a glance.
Commercial-led, with a healthy contingent tail. Bar widths are exact percentages of revenue.
§ 03 · Growth & concentrationGrowth & account concentration.
Double-digit average organic growth (10.1%) and lower account concentration than the smallest tier — a diversified, growing book.
| Metric | Average | Top quartile |
|---|---|---|
| Net-revenue organic growth | 10.1% | 15.0% |
| Net-revenue total growth | 10.7% | 15.2% |
| Top-10 accounts (% of commissions) | 14.5% | — |
§ 04 · ProductivityProductivity per person.
About 11.7 staff, with the highest spread-per-employee of any band ($107,563) — the strongest per-person economics in the study.
| Metric | Average | Top quartile |
|---|---|---|
| Revenue per employee | $186,019 | $208,866 |
| Spread per employee | $107,563 | $106,973 |
| Total staff (average) | 11.7 | — |
§ 05 · Producer pipeline & stabilityThe pipeline read.
The caution sits here. Despite strong NUPP investment (2.8%), the five-year producer success rate is the lowest of any tier (29.1%) — a pipeline spending heavily but validating few. A solid 2.04 current ratio and a 49.1 producer age round out the profile.
| Metric | Average | Top quartile |
|---|---|---|
| Weighted-average producer age | 49.1 | — |
| 5-year producer success rate | 29.1% | 50.0% |
| NUPP (% of net revenue) | 2.8% | 4.0% |
| Current ratio | 2.04 | 2.50 |
| Tangible net worth (% of revenue) | 13.8% | 26.7% |
- The profitability peak holds. 30.9% Pro Forma EBITDA and a 26.9 Rule of 20 — still the study's highest.
- Double-digit organic growth. 10.1% average — a growing, commercial-led book.
- Best per-person economics. A $107,563 spread per employee — the highest of any band.
- Lightest cost base. A 48.6% compensation load.
- Lowest producer success rate. 29.1% over five years, despite a 2.8% NUPP investment — the cohort's pipeline caution.
- Diversified book. Top-10 accounts at 14.5% of commissions.
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 a premium profile: the highest Rule of 20 (26.9), the highest margin (30.9%), double-digit growth, and a diversified book. The one thing a buyer underwrites carefully is the 29.1% producer success rate — a sign the next generation of the book is expensive to build.
The largest single normalization in this band is owner compensation — the add-back to a 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 $1.25M–$2.5M band in the 2024 edition (calendar 2023 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.