This brief captures the 2024 Best Practices Study profile for the $2.5M–$5M tier — the band that posted the sharpest growth recovery from 2022. Read against the 2022 profile to see the turn. 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.
A 27.2% Pro Forma EBITDA on a 55.3% compensation load, with a Rule of 20 of 24.5 — solid profitability carried higher by the year's strong growth.
| Metric | Average | Top quartile |
|---|---|---|
| Pro Forma EBITDA margin | 27.2% | 36.9% |
| Pre-tax profit | 23.4% | 33.2% |
| Rule of 20 score | 24.5 | 29.3 |
| Total Pro Forma compensation | 55.3% | — |
§ 02 · Revenue mixRevenue mix.
Commercial lines hold just past half the book (50.3%) as personal recedes to 28.3% — the durable, advisor-mediated end of the market, with a rich contingent line.
| Line | % of revenue |
|---|---|
| Commercial lines | 50.3% |
| Personal lines | 28.3% |
| Contingent / bonus | 9.3% |
| Group medical | 4.5% |
| Individual life & health | 2.0% |
Revenue mix, at a glance.
Commercial past half, with a rich contingent line. Bar widths are exact percentages of revenue.
§ 03 · Growth & concentrationGrowth & account concentration.
The rebound: average organic growth jumped to 10.3% — from 5.9% two years earlier, the band's strongest recovery — on a diversified book with mid-range concentration.
| Metric | Average | Top quartile |
|---|---|---|
| Net-revenue organic growth | 10.3% | 16.8% |
| Net-revenue total growth | 10.9% | 16.9% |
| Top-10 accounts (% of commissions) | 14.6% | — |
§ 04 · ProductivityProductivity per person.
About 19.9 staff, with revenue-per-employee at $195,217 — the scale dividend continuing.
| Metric | Average | Top quartile |
|---|---|---|
| Revenue per employee | $195,217 | $221,248 |
| Spread per employee | $92,153 | $98,875 |
| Total staff (average) | 19.9 | — |
§ 05 · Producer pipeline & stabilityThe pipeline read.
The strongest producer success rate of the 2024 study (56.7%) and a deepening balance sheet — tangible net worth rose to 16.6% of revenue, well above 2022. A 50.4 producer age keeps perpetuation on the agenda.
| Metric | Average | Top quartile |
|---|---|---|
| Weighted-average producer age | 50.4 | — |
| 5-year producer success rate | 56.7% | 100% |
| NUPP (% of net revenue) | 2.0% | 2.9% |
| Current ratio | 2.06 | 3.00 |
| Tangible net worth (% of revenue) | 16.6% | 23.0% |
- Strongest growth rebound. Organic growth jumped to 10.3% from 5.9% two years earlier.
- Highest producer success rate. 56.7% over five years — the best of any 2024 tier.
- Commercial past half. CL at 50.3%, with a rich 9.3% contingent line.
- Deepening balance sheet. Tangible net worth rose to 16.6% of revenue.
- Solid profitability. A 27.2% Pro Forma EBITDA on a 55.3% compensation load.
- Diversified book. Top-10 accounts at 14.6% 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 is one of the cleanest profiles in the 2024 study: double-digit growth (10.3%), the highest producer success rate (56.7%), a commercial-led book, and a deep balance sheet. An agency at or above these reads as a premium book; the gap below is where pricing separates.
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 $2.5M–$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.