In today’s economy, businesses are looking for ways to cut costs without hurting productivity and, most importantly, profitability. Some organizations are going paperless, others are cutting back on business trips, and still others are trying to more efficiently manage their current business practices. Many of these organizations are completely overlooking one of their biggest costs…Business Development. So whether you are business to business (B2B) or business to government (B2G) Business Development is more than just salary expenses and with belts tightening across the country it is imperative you’re getting value for the dollars you spend. So how do you know what’s right for you?
Over the next couple of weeks we’ll review the cost structures, process and questions you need to ask yourself to determine the best avenue for you to grow your sales.
Average Salary for Business Developers
- B2B Business Developer: $70,000 + 20% for payroll taxes and benefits
- B2G Business Developer: $150k + 25% for taxes and benefits (government contractors tend to have substantial benefits packages due to the limited available supply of top talent)
Keep in mind, we’re based in Maryland so your state may be a little higher or lower.
And that is just the beginning. Then there are all of the extra costs that organizations often fail to consider, including:
- Mileage Reimbursement: $500-800 average per month
- Phone Reimbursement: $100 average per month
- Event Fees: Federal events average about $35 a piece and you should expect your business developer to attend 4-5 each month totaling $140-175 per month, while B2B events range from $30-$250 each. The more decision makers in attendance the higher the cost and there are far more to choose from so you should expect easily $500 per month in event feed for a B2B Business Developer.
- Memberships: Federal market focused memberships are usually very inexpensive ranging from $35-150 per year and so you should budget for a minimum of $350 a year; B2B memberships can come in anywhere from $5000 to $10,000 annually. I have memberships that range from $100 a year to those that are over $3000 annually. On the very low end you should expect to pay a minimum of $5000 in memberships for your Business Developer to network with decision makers.
- Client / Prospect Lunches: average $300 per month
- Parking & Tolls: average $50 per month
- And more! (don’t forget trade shows and travel)
When you add the above costs, you will have a better idea of the typical cost of hiring a full time, in-house business developer. You certainly have options as to how you pay your full time Business Developer but keep in mind less pay = less experience = longer lag time = more of your time in training and potential lost opportunity.
Outsourced Business Development
More and more businesses are looking for alternatives to hiring full time and are turning to outsourced business development firms to cut costs. Depending on the organization you talk with you can expect to pay fees anywhere from $3000 to $30,000 per month with hourly rates of $150-450. I know business developers who charge $5000 per month to gain access to one agency, and others that charge $30,000 to get you on the GSA schedule. I know outsourced business developers that repackage RFP’s found on FedBizOps and those that focus on multiple agencies at one time. On the B2B side I know firms that still cold call; quite frankly I think that’s a waste of time of money and others that hire people with zero business development experience to be your outsourced Business Developer. Outsourcing doesn’t always make sense but when it does it’s best to look for an organization that has strong existing relationships in the areas you wish to target, can work within a reasonable monthly budget and has deliverables of some kind. Let’s be clear the deliverable cannot be X% increase in business or X number of sales because as you know sales is a risk and there are no guarantees. Be very careful of someone who promises you the world. Your goals should be based on activity, meetings, introductions, opportunities, etc. Outsourced business developers put their relationships on the line to help you grow your business and they are dependent on you to do your part – come prepared, know your stuff, deliver, service, be respectful, do what you say you’re going to do and offer a reasonable price.
Here’s what we do at Springboard to give you an idea– our typical retainer starts in the $3-4000 per month range and we have a proposal out right now that’s for 6 Business Developers totaling $40,000 per month. We have the flexibility to be as big or as small as you need. We don’t believe in cold calling, we believe in building long term client relationships and our Business Developers are full entrenched in the areas in which they work – they aren’t building relationships, they already have them. Based on our clients target markets, their need and capabilities we craft a team of high level Business Developers that can go to work immediately to bring them opportunities. For Springboard we find that for what organizations typically pay in terms of salary for a single business developer we can give them 3-5 high-level business development experts.
If you have any questions about Outsourced Business Development, please contact Springboard Business Development by calling 410-832-7560 or click here today!
Located in Baltimore, Maryland, Springboard offers outsourced sales solutions for businesses in the professional services arena. Our approach to business development makes it easy to find new clients without the financial burden of an in-house business developer.
At Springboard we know sales!