When is it time to hire a BDM?

When is it time to hire a BDM?

When you own a small Property Management company, or are even starting off completely on your own, it’s necessary for you to wear many hats.  For most Property Management business owners, the hat worn most often, and for the longest period of time, is that of a Business Development Manager.  Company owners are quick to pass off handling maintenance requests, answering leasing questions, and the benign day to day Property Management duties.  However, there comes a point when every Property Management business owner needs to ask themselves – “Should I hire someone to handle Business Development also?”

To answer that question (which we will do later on) there are several factors to consider, but first I want to point out why most Property Management Company Owners claim they can’t hire a BDM.

1. My current revenue doesn’t justify the salary of a BDM.
2. I don’t have time to hire or train them.
3. Anyone I would hire could not do as good of a job as me.
4. I don’t have the sales processes or marketing in place to ensure the new BDM would be able to bring in 5 additional accounts per month. 
5. Our operations are not ready to take on any more accounts than we are already taking on.

Why you are wrong (reference the points above):

1. For your typical company and market, a BDM would need to add an additional 5 new accounts per month.  For example, if the business currently brings in 10 new accounts per month, the new hire would need to bring in 15 new accounts monthly to cover their own expense.  As time goes, and their skills improve, they will not only pay for themselves, but generate significantly more profits.
2. Working with BizDev Mastermind means you don’t have to spend the time finding or training your new BDM.  BizDev hires the BDM, provides the training, tools, and KPI tracking to take the burden off the company owner.  This is what we do.
3. You may be great at selling your service, but how much time do you spend on it?  50% of your time?  30%?  10%?  What if you had someone focusing 100% of their time to Business Development?  A well-trained BDM, spending 100% of the time focusing on growing the business will almost always deliver better results than a company owner whose attention is pulled in a hundred different directions.
4. This is a legitimate concern; however, it is fixable.  The key is to start and to start now.  Marketing is not something you do and are done with – it is a consistent push, which when done consistently over time yields results.  Working with BizDev Mastermind, we put into place the tools you need to successfully market your company now and into the future.  Follow this method and you WILL see your lead count increase over time.   
5. You need to get your operations in line – NOW.  But, it’s probably not as bad as you think.  No company is perfect, and if you are genuinely giving your clients the best service you are able to provide – that is more than most.  It’s also more difficult to improve your operations with stagnant revenue.  How do you pay for the new improvements to your process?  Hiring a BDM means increased revenue to pay for the operational improvements you want.   

Let’s run the math on hiring a new BDM and getting them trained through BizDev:

Additional Overhead costs by month: 

• Company Phone – $100
• Computer – $75 (Amortized over its useful life)
• Office Space – $0 if you already have the space, or up to $300
• Additional Marketing Budget – $1,000-$3,000
• Software Subscriptions:  $500
• Miscellaneous (Mileage, Clothing, Etc) – $300

Additional Salary Expense by Making a Hire by Month:

• Salary – $3,000 – $5,000
• Taxes, Insurance – $800
  

Average BizDev Mastermind Expense Amortized over 12 Months:

• Monthly: $1,000

Average Total Expenses per month:  $8,925

Annual Reoccurring Revenue Generated from New Account:

Management Fee, Leasing Fee, and Tenant Fees:  $1,500 – $3,000+

$2,000 average annual revenue per door * 5 = $10,000.

Analyzing the Numbers

If a BDM brings on, in addition to the number of accounts your company is already adding – 5 new accounts ($2,000 in revenue per door) on average, they will pay for themselves.  If you currently bring in 10 new accounts monthly, working part time in that area of the business, and the BDM you hire can pull in 15 new accounts consistently, you are getting a ROI immediately.  Currently bringing on 2-3 new accounts?  They would need to add 7-8 per month then.

Even more, these new accounts being brought on will typically remain a client for more than 1 year.  More likely, you will be collecting revenue from these new accounts for 3-5 years.  So, as each year passes, the revenue generated by your new BDM will continue to grow while their salary, and expenses will remain relatively the same.  As each year passes, you continue to earn a higher and higher return on your human capital investment.    

Ok, so we now know what the goal for your new BDM is – but can they actually do that?  Can they sign up that many accounts?  What if they don’t – I don’t want to be stuck paying a salary?  Well, if you make the right hire, train the person well, and give them the tools to succeed, there is no reason they could not hit this goal in most markets. 

Keys to Hiring a Successful BDM

The key to hiring, training, and empowering a new BDM is following a systematic format.  You give them, an outline, marching orders, a playbook, a script whatever you want to call it – and let them use that to get the business.  A step by step outline of what they need to do to each day, week, month, quarter, and year to consistently generate new business.  It is more than a list of To Do’s or sales scripts – MUCH more.  They need software, marketing dollars, equipment, goals, a referral strategy, materials, partners, and most of all training from someone who knows the position.  Essentially, they need to know how to use these tools effectively.

A Business Development Manager is a sales position, but it is different than most other types of sales.  You aren’t just looking to overcome a potential client’s objections, you are building a long term, trusting relationship.  You don’t want someone who will do whatever it takes to get any business because in the end, your operations will suffer.  You want someone who will follow a prescribed system consistently and diligently.  If you have set up your sales/marketing processes efficiently in advance, most decent salespeople can close the deal.  You shouldn’t rely on a great salesperson because they will come and go.  Instead, invest in the right system, and find someone who can fit within it. 

Hiring a BDM

If you are ready to hire a BDM, start by looking at your marketing.  Do you have the ability or current lead volume to keep them busy?  If you don’t, do you have a plan to get there?  If the answer is yes, proceed to the hiring phase and re-read the above two paragraphs.  If they answer is no – call BizDev Mastermind and we will get you there. 

Our team creates an employment listing, screens applicants, conducts initial interviews, and only schedules the most qualified candidates to come in for an in-person interview.  Part of the application process includes personality tests, skills tests, and surveys to ensure any candidate is a good fit beyond just experience.  We will be with you every step of the way throughout the hiring process for guidance. 

Once the hire is made, we will go about implementing a sales and marketing process that your BDM can execute.  After that, we enter the training phase. 

At the end, you have hired a thoroughly vetted BDM, implemented a proven sales/marketing process, and have set yourself up to earn a huge return on investment.