How to Start a Freight Brokerage Business
Knowing how to start a freight brokerage business can present a lucrative business opportunity for those with a knack for logistics and a desire to run their own company. A freight brokerage business acts as the intermediary between companies with goods that need to be transported and dependable shippers. Freight brokers earn commissions off every deal brokered. Though no formal training is required for starting a freight brokerage business, it's helpful to have a sound knowledge of logistics and business management. Read the steps below to find out how to start a freight brokerage business.
Gain experience in the freight brokerage business by working for a reputable company.This will allow you to learn the ins and outs of the business and establish contacts you can use when starting a freight brokerage business of your own.
Determine which niche you want your freight brokerage business to concentrate on.Some cater to their immediate area, others specialize in small or large loads, and some cater to a specific market such as the agricultural or chemical industry.
Draw up a detailed business plan for your freight brokerage business.Include the costs of an office and equipment and describe your operational strategy, management plan, and marketing campaign.
Obtain the funds you need to start a freight brokerage business by speaking to private investors or applying for a business loan from your bank.It's advisable to have enough funds in reserve to cover the first 3 months of operations, including paying shippers for their services in case companies are late paying their invoices.
Apply for a business license from your city by registering your company.
Choose a location for your freight brokerage business.If you're working alone, you can work from a home office and avoid the high costs of renting office space.
Purchase office equipment such as a computer, fax, printer, and telephone.Also purchase logistics software so you can track each freight.
Hire a lawyer to draw up business contracts.You'll need official agreements between yourself and each company, as well as each shipper. In addition, you'll need addenda you can add to specify the details of each individual consignment.
Market your business with client companies by sending out mailings and advertising in trade magazines or on billboards.Approach as many companies as you can to build your client list and acquire as many freight orders as possible.
Find shippers who cater to your clients' areas and freight needs.Make sure each is reliable and has his paperwork in order.
Match client companies to the appropriate shippers.Make sure every detail of every agreement is outlined in your contracts and addenda, and keep meticulous records of each freight deal you broker.
How do you find Clients
- When you have a number of recurring client companies and a trustworthy fleet of shippers, consider hiring staff to help you acquire new clients and coordinate all of the paperwork.
- You'll still have to insure all cargo.
Video: Freight Broker the Series | 7 Steps to Start a Freight Broker Business
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