This brief captures the 2024 Best Practices Study profile for the $5M–$10M tier — an institutional operation with a deep service organization and a commercial-led book. Read against the 2022 profile to see the balance sheet strengthen. 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 25.2% Pro Forma EBITDA on a 59.1% compensation load, with a strong 25.3 Rule of 20 — carried by durable growth even as the larger service organization weighs on margin.
| Metric | Average | Top quartile |
|---|---|---|
| Pro Forma EBITDA margin | 25.2% | 31.0% |
| Pre-tax profit | 19.7% | 27.4% |
| Rule of 20 score | 25.3 | 31.8 |
| Total Pro Forma compensation | 59.1% | — |
§ 02 · Revenue mixRevenue mix.
Commercial lines lead clearly at 55.4%, personal recede to 21.6%, and group medical is a material 8.1% — the diversified book of a full-service agency.
| Line | % of revenue |
|---|---|
| Commercial lines | 55.4% |
| Personal lines | 21.6% |
| Group medical | 8.1% |
| Contingent / bonus | 7.8% |
| All other group | 2.3% |
Revenue mix, at a glance.
Commercial-led, with a material benefits practice. Bar widths are exact percentages of revenue.
§ 03 · Growth & concentrationGrowth & account concentration.
Strong organic growth (9.1%) with a wide top-quartile (19.0%), and low account concentration (14.4%) — a diversified book scaling well.
| Metric | Average | Top quartile |
|---|---|---|
| Net-revenue organic growth | 9.1% | 19.0% |
| Net-revenue total growth | 9.4% | 20.1% |
| Top-10 accounts (% of commissions) | 14.4% | — |
§ 04 · ProductivityProductivity per person.
About 36.8 staff, with revenue-per-employee at $207,698 — high productivity from a deep, specialized organization, and the youngest producer bench of the larger bands.
| Metric | Average | Top quartile |
|---|---|---|
| Revenue per employee | $207,698 | $225,234 |
| Spread per employee | $87,789 | $98,581 |
| Total staff (average) | 36.8 | — |
§ 05 · Producer pipeline & stabilityThe pipeline read.
The standout is the balance sheet — tangible net worth doubled to 22.8% of revenue (from 11.3% in 2022), the strongest of any band, on a healthy 2.14 current ratio. The producer success rate of 50.2% reflects scale hiring, with the youngest producer age of the larger tiers (48.1).
| Metric | Average | Top quartile |
|---|---|---|
| Weighted-average producer age | 48.1 | — |
| 5-year producer success rate | 50.2% | 75.0% |
| NUPP (% of net revenue) | 1.6% | 1.8% |
| Current ratio | 2.14 | 2.80 |
| Tangible net worth (% of revenue) | 22.8% | 34.4% |
- Strongest balance sheet. Tangible net worth at 22.8% of revenue — double the 2022 reading and the highest of any band.
- High Rule of 20. A 25.3 composite score on durable growth.
- Commercial-led, benefits-inclusive. CL at 55.4% with a material group-medical line.
- Wide-dispersed growth. 9.1% average organic, a 19.0% top quartile.
- Youngest larger-tier bench. A 48.1 weighted-average producer age.
- Low concentration. Top-10 accounts at 14.4% 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 an institutional-quality, well-capitalized profile: a 25.3 Rule of 20, a doubling of tangible net worth, low concentration, and a younger producer bench. It is 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 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.