Book of business

Definition

The recurring clients or contracts a firm serves, priced as one asset.

Why It Matters

It is what you are really buying in an agency, a practice or a route: not equipment, but a list of people who keep paying. Price follows how sticky that list is, so ask for retention by year and by client, ask how many of the relationships sit with one departing person, and ask what happens to the book the day that person leaves. A book concentrated in a handful of accounts, or held together by the owner's own name, is worth materially less than the same revenue spread across hundreds of them.

In numbers: An agency renewing 92% of its book each year is worth far more than one renewing 78%, because the second gives up about a fifth of its revenue every twelve months and has to replace it to stand still.