Build a profit center by establishing a BPO Department in your brokerage. If you set this up properly, you could clear $20,000 per month profit – no selling required. If you aren’t doing this, you’re missing a fantastic money-making opportunity. Let Mike break it down for you:
BPO 101: Set It Up Right, Make Money
Setting up a BPO Department is the fastest way to build cash flow.
- Six months to launch
- Two weeks to setup
- No real capital investment
Imagine what you could do to grow your business with that much extra money per month?
How does it work?
Let’s use Taco Bell as an example. They clear a net profit of $3 billion – that’s Billion with a ‘B’ – selling items that cost a dollar. How does that translate in this situation?
- Field inspection/photos: All digital – no cost, labor only
- Average cost: $10.00 for inspection and photos
- Data Entry/Clerical: $5.00 per completed BPO
With experience, it should take less than 15 minutes to complete a BPO.
- BPO Fees: $35-$70
- Average fee: $45
- Average cost: $15
- Average net profit: $30 per unit
How do you get there?
Hire a Manager:
Here’s where your prep comes in. Create a BPO Department, and hire a manager for the department – someone with a real estate license. It’s easy to find people with appraisal backgrounds. Then, suggest a salary and bonus – structure the bonus around on-time delivery of BPOs. For added incentive, penalize for every one that is late.
Note: The best candidates for this position are analytical types. They have a real estate background, but perhaps aren’t the best sales people. It’s a great position for a person with passion for the industry, but who lacks the passion for selling.
Set up a Staff:
You’ll need Field Inspectors/Shooters, and the best source is your own pool of agents. If they are experiencing a downturn, this is an especially good way to put them to work and help their cash flow as well. Set them up to cover geographic areas based on where they live.
Establish Your Service Area:
This will vary based on your market size and traffic patterns – traffic patterns are a factor with timing. Go by travel times, not miles. Determine a radius, then break it into quadrants. Assign a field inspector to each quadrant. If you can find a field inspector who lives within the quadrant, even better. Cut down on their travel time = less gas money.
Now is the Time
Learn the rest of the secrets to a successful BPO department in this seminar-style episode from Mike Krein. This is time well spent.
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