This brief captures the 2025 GPS operating profile for the $2M–$3M revenue tier — the most operationally mature band, running ~20 staff with the lowest compensation ratio and the highest revenue per person in the study. It also posts the lowest growth, at 3%. Every figure here is a segment benchmark; the companion GPS tier reference explains how the tiers compare.
§ 01 · ProfitabilityProfitability & cost structure.
An 11.29% pre-tax margin on the lowest compensation ratio in the study (64.04%) — the efficiency dividend of scale. Owner compensation falls to 17.40% as ownership decouples from production.
| Metric | Benchmark |
|---|---|
| Pre-tax profit margin | 11.29% |
| Total expense ratio | 88.71% |
| Total compensation (% of revenue) | 64.04% |
| Executive / owner compensation | 17.40% |
| Sales (producer) compensation | 13.35% |
| Office (service) compensation | 23.77% |
| Total administrative expenses | 24.67% |
§ 02 · Revenue mixRevenue mix.
Commercial-lines-led at 45.89%, with a large personal-lines book (3,701 accounts) that anchors stability. Contingent income sits at a healthy 7.16%.
| Line | % of revenue |
|---|---|
| Commercial lines | 45.89% |
| Personal lines | 37.28% |
| Life | 2.68% |
| Health | 5.84% |
| Contingent / bonus | 7.16% |
| Fees | 0.87% |
| Other | 0.28% |
Revenue mix, at a glance.
Commercial-led with a deep personal-lines base. Bar widths are exact percentages of revenue.
§ 03 · Growth & retentionGrowth & retention.
The lowest growth of any tier at 3% — the maturity plateau. Retention, by contrast, is the strongest of the small-to-mid bands (90–93%), the trade a scaled book makes: stability over velocity.
| Metric | Benchmark |
|---|---|
| Annual revenue growth | 3% |
| Commercial-lines retention | 91% |
| Personal-lines retention | 90% |
| Life & health retention | 93% |
§ 04 · ProductivityProductivity per person.
The most productive small-to-mid tier: $134,980 revenue per employee across a 20.3-person team with 4.8 producers. That producer depth is what makes the book transferable.
| Metric | Benchmark |
|---|---|
| Revenue per employee | $134,980 |
| Commission per employee | $122,704 |
| Compensation per employee | $85,351 |
| Compensation spread | $49,629 |
| Total staff (average) | 20.3 |
| Producers (average) | 4.8 |
§ 05 · Balance sheetBalance-sheet & book quality.
A leaner, more conservative balance sheet than the small tiers — a 1.85 current ratio and 2.32 trust position — paired with the most efficient collections in the study at 11.7 days.
| Metric | Benchmark |
|---|---|
| Trust position ratio | 2.32 |
| Collection ratio | 0.25 |
| Current ratio | 1.85 |
| Days working capital | 51.2 |
| Average age of receivables | 11.7 days |
- Lowest growth in the study. 3% annual — the maturity plateau, and the headline diligence question.
- Most efficient cost base. 64.04% compensation ratio — the scale dividend.
- Highest productivity of the mid tiers. $134,980 revenue per employee.
- Lowest owner-comp share. 17.40% — ownership decoupling from production.
- Deep, sticky book. 3,701 personal-lines accounts and 90–93% retention.
- Leaner balance sheet. 1.85 current ratio with best-in-study 11.7-day collections.
Scale and stability — at the cost of growth.
GPS benchmarks don't value an agency — they're the operating baseline a valuation is built on. The $2M–$3M tier is a prime upper-mid-market target: a scaled, efficient, low-key-person book with 4.8 producers and 90–93% retention. The metrics that move a multiple here are producer depth, retention, and margin efficiency — and the one that caps it is the 3% growth. A buyer prices the stability and underwrites a plan to re-accelerate organic growth on a larger platform.
Owner compensation has fallen to 17.40%, so the normalization swing is smaller than in the smaller tiers, but still worth confirming. The companion financial & transactional mechanics reference walks the full bridge.
What GPS measures. The Growth & Performance Standards study tracks growth, profitability, and stability across reporting independent agencies, segmented by revenue tier. This brief reflects the $2M–$3M band.
Percentages of revenue. Expense, compensation, and revenue-mix lines are expressed as a percentage of total agency revenue unless a dollar figure is shown.
Benchmarks, not averages-of-extremes. Each figure is the segment's reported standard for the band — the typical agency, not a blend of outliers.
Frequency. The GPS study publishes annually. Milly Books refreshes this brief with each new edition.