FREIGHT BROKERAGE BUSINESS PLAN GUIDE
Freight brokers are an important part of the global shipping industry. These businesses act as intermediaries between shippers and good carriers. This is an exciting business opportunity that deals with a lot of logistics.
If you are interested in establishing one, you will find this freight broker business plan sample very useful. Let’s get to the details by showing you how to kick start the process.
Here is a sample business plan for starting a freight brokering business.
- Having Some Industry Experience
It is assumed that you would have been actively involved in the freight industry for a significant amount of time to gain experience. Experience is necessary for success in this field. If you have this, you are well on your way to achieving your goals.
However, this is not to dampen your spirit if you have no form of experience. Once there is a will, there is always a way out!
- The Business Plan
This document has multiple uses that include applying for credit from banks as well as eliminating all forms of rowdiness. We recommend that your plan is easy to understand and devoid of complications. This enhances the chances of success for your freight brokerage business.
- Choice of a Business Structure
This is a decision you will have to make from the onset. Your structure will determine what benefits or opportunities are available to you. This is not a process to rush. The most common include Sole Proprietorships, Partnership, Limited Liability Company LLC, etc. If you have doubts about how each structure affects your business, consider speaking with a business attorney or similar professionals. They will help clarify your doubts.
- Choosing a Business Name and Registration
This should follow after you choose a preferred structure for your freight brokerage business. You need to find out if the name you have chosen for your business has been taken by another. The United States Patent and Trademark Office has a database of all businesses as well as their names. If your name is available, you are required to proceed with the registration
Different states have different requirements for freight brokerage business registrations. You need to find out what the requirements for your state are.
- Obtaining Necessary Licensing
To establish a freight brokerage business, you will need to obtain professional licensing. This professional licensing is known as the Motor Career Operating Authority. This is popularly called the “MC Authority.” The Federal Motor Career Safety Administration FMCSA is the body authorized by law to issue such licensing.
The application form for licensing requires a U.S Department of Transportation number. This allows you to proceed with the registration process on FMCSA’s website. This comes with an application fee. After submitting this, you will have to wait for the approval. If you are successful, your MC Authority number is issued to you.
- Getting a Suitable Office Location and Running Costs
In preparation for the full take-off of business operations, office space is needed. Wherever your office is located, there are basic running costs.
Depending on your needs, other running costs should include taxes and insurance, internet and phone bills as well as utilities.
The larger bigger your freight brokerage business, the greater your running costs. This will include workers’ payroll and other benefits that may accrue.
- Organizing your Paperwork
This is important for record purposes. Starting a freight brokerage business requires a tremendous amount of logistics. You are required to log all records appropriately. To achieve this, you need to ensure that all requirements are fully met. What do these records consist of? They include receivables, bill of lading, contracts, and much more.
- Selecting your Process Agents
All freight brokerage businesses are required by law to have process agents across all states in America. This is to ensure a smooth service of process. You can do this by filling and submitting the form BOC-3 (Blanket of Coverage) to the FMCSA. Process agents receive and forward documents for your freight brokerage business.
- Funding your Freight Brokerage Business
It is expected that you should have made provisions on how to raise funding for starting your business. However, if you haven’t completely figured that out, you can apply for credit from a reliable bank(s). These should be your local banks. As an intermediary between carriers and shippers, you need not disappoint. In most cases, truckers will have to be paid before being paid or reimbursed by the shipper.
- Marketing your Business and Services
Successful freight brokerage businesses are known to have robust marketing strategies. As a new entrant, anything short of this will result in mediocre performance. You need to make your freight brokerage business stand out from the pack. More businesses are innovating by seeking out better ways to satisfy their clients. Having an edge is important here.
Also, repeat patronage depends on customer loyalty. You cannot attract customer loyalty by providing sub-par services. Clients will continue doing business with you as long as they are kept satisfied. If you take them for granted, innumerable freight brokerage businesses are willing to pounce at the opportunity to take over an unsatisfied client.
This calls for deliberate actions that ensure that even the slightest details are taken care of. After all, the smallest details make a whole difference in the end.
Have you found this freight brokerage business plan useful? We hope you have. We have focused on some of the key areas you should consider when starting your own freight brokerage company.
Just like you have searched for useful information to help you establish your business, you should also seek expert opinion during the entire process of drafting your plan.