Choosing the benchmark is a thirty-second decision that determines whether the next thirty hours of analysis are valid. This is the routing logic — the deep methodology behind the two studies is the GPS-vs-BPS comparison.
§ 01 · By revenueThe first filter.
Size is the fastest router, because the two studies' tier systems cover different ranges.
| Revenue range | Primary | Why |
|---|---|---|
| Under $500K | GPS | Only GPS has a sub-$500K tier |
| $500K–$1.25M | GPS (+ BPS) | GPS more granular; BPS for profit targets |
| $1.25M–$3M | Both | Overlapping tiers — read both |
| $3M–$5M | BPS (+ GPS) | BPS has the $2.5M–$5M tier |
| Over $5M | BPS | GPS lumps all $3M+ together |
§ 02 · By analysis typeThe job in front of you.
What you're trying to learn routes as clearly as size. Sell-side prep, valuation, and EBITDA analysis go to BPS — its EBITDA, organic growth, and Rule of 20 are the figures an acquirer and lender expect. Operational efficiency, staffing optimization, and balance-sheet health go to GPS — its expense ratios, service-rep account loads, trust position, and working-capital days are where it's deepest. Buy-side diligence uses both: BPS for the valuation frame, GPS for the operational detail underneath it. Succession planning leans BPS for its weighted-average producer- and shareholder-age signals.
§ 03 · By characteristicsThe agency in front of you.
Two agencies of the same size can still route differently. A rural or single-line-focused agency leans GPS, which segments by metro size and business focus — segmentation BPS lacks. A high-growth agency (organic growth over ~10%) leans BPS, which separates organic from acquired growth. A PE-backed agency leans BPS for institutional-grade valuation metrics, while a family-succession situation uses both — GPS for operations, BPS for the valuation and timing read.
The benchmark you reach for first is a decision, not a default. Thirty seconds matching the ruler to the job protects every hour of analysis that follows it.
§ 04 · The anti-patternsFive ways to corrupt the read.
Five mismatches do most of the damage: comparing mismatched tiers (a GPS $2M–$3M agency held to a BPS $2.5M–$5M tier); treating pre-tax profit as EBITDA (they differ by 1–3 points); using GPS alone above $5M (its $3M+ tier is too broad to be meaningful); ignoring location and focus segments (a rural commercial agency isn't an urban personal-lines one); and mixing revenue bases (GPS commission-only against BPS net revenue). Avoid those five and the benchmark does its job. For an M&A target specifically, the screen runs BPS first (EBITDA, growth, Rule of 20), then GPS for operational diligence — the valuation that result feeds is the Book Valuation Engine, a deterministic range with named drivers.
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Terminology on this shelf
- Tier mismatch
- Comparing an agency to a peer tier that doesn't align across studies — the most common selection error.
- Rule of 20
- A BPS metric: organic growth rate plus EBITDA margin; ≥20 signals a premium valuation.
- Revenue basis
- Whether a metric counts commission-only (often GPS) or all net revenue (BPS) — they don't compare directly.
- Top quartile
- A BPS aspirational benchmark — the top 25% of agencies on a metric.