New Apprenticing Program Develops Winning Associates
(News Item #0268, Published: 04/02/95, IBBA.org)
Growing your practice into a full service operation can be a very big challenge.
In addition to building resources such as marketing, a database, legal forms, appraisal techniques and so forth, the most difficult part of growth can be recruiting and training great associates or partners.
For fifteen years, I have been trying with varying degrees of success to find and develop a staff that would work hard, smart, professional and fast. Over the years several types of programs have been structured. I have tried the three kinds of possible recruits:
Rookies. Younger folks who really want to make a career out of M&A.
Veterans. Those who have been Intermediaries somewhere before.
Immigrants. Experienced executives new to our industry.
For a long while, I went the standard straight commission route. Then I formulated a consortium arrangement, similar to RE/Max Realtors, where associates pay an overhead fee and receive a 90 to 100% commission.
Neither of these arrangements produced long-term practice-building employees. I would have liked to try a salary approach but, frankly, I have never been able to find a recruit worth paying because none of them really knew anything about the craft. Everyone was starting from scratch.
A Break Through
Then in late 1993, I found myself visiting a long time acquaintance who had successfully built a multi-office commercial Real Estate operations. Each office had 10 to 20 top-notch pros. Everyone there makes over six figures. Many are $200,000 per year. His firm is well respected and very stable.
I asked him how he built the firm. He said easy: "Everyone of my people has to put in a full year as a RUNNER before we let him handle his first listing." What's a runner I asked? “It’s a program that many commercial firms use.”
"We agree to pay them $1,000 per month and show them the ropes. They get no commission. They agree to work 60 hours per week for one year, and take on any and every task we give them. Even putting up signs. Because the senior brokers don't have to pay them, they get used ... a lot. And they learn a lot."
Then he surprised me:
"Everyone one of our people started as a runner. EVEN if they had worked in Real Estate before. It’s the only way we know they will do it our way. And our way works."
Stonemark Apprentice Program
I went back to my office to adapt what he had told me to our industry. Would it really work in M&A or Business Brokerage? We are so different from Real Estate would it be sacrilegious to apply some of their techniques? Here is what I came up with.
(1) The Apprentice program is a one-year program.
(2) We will pay them $1,000 to $2,000 per month as a salary, with taxes taken out.
(3) Its not a draw, or even repayable.
(4) They agree to work 60 hours per week. More if you count our regular once a week
(5) They don't get a commission, but I have the option of paying them a bonus if something they do directly makes us a big profit. Strictly my call.
(6) They agree to do whatever task is necessary. Usually they will gravitate to one skill set or another: broker, research, marketing.
(7) At the end of the program I anticipate paying them a salary at $40-$50,000 the second year, plus perks, plus a discretionary bonus.
(8) Intermediaries will have the option of going straight commission at the end.
I recruited mostly from colleges and, surprisingly, had MBA students beating down the doors demanding an interview. I considered hiring older executives but none of them was aggressive in getting the job.
Results So Far
After interviewing a long list of people in an attempt to feel my way along this process new to me, I selected two individuals to test the first apprentice positions. Both of these individuals are very bright. Best of all, both literally camped on my phone three times a day to get the jobs.
Our first apprentice will be finishing his year in May. He is specializing in research and is doing great at briefs, case studies, dossiers, case studies etc. He has mastered color documents, importing photos, doing great write-ups, offering videos, and even better flyers and practice marketing tools such as brochures.
Our second apprentice is half way through his year. He started by mastering our project and practice marketing tools including letters, mail list management, telemarketing, buyer registration, mail coding, etc. He is already an expert at seller campaigns and buyer searches. Already he is essentially acting as a project manager under my wing. He supervises all those little details of each project and has a tremendous grasp of things.
I am absolutely delighted with both apprentices so far. They are more competent and growing much faster then any associate, of any background, that I have ever had before. They work harder, they care more, they learn faster, they go out of their way to make things happen. They have fresh attitudes.
They are a delight.
After about six months, I am overcome with a feeling I had many years ago when I worked in a different industry and hired many employees. It was a feeling lost for years as I followed traditional Broker compensation schemes. As I haggled with agents, and want-to-be's who thought they knew it all but were, by all rights, strictly beginners.
That feeling was simply this:
If you hire people, pay them something, and train them, you can really build a much better organization and offer more reliable services to your clients.
My wife says I haven't been this happy in years. Brokerage is a blast again.