Are you about starting a freight brokerage business? If YES, here is a complete sample freight broker business plan template & feasibility report you can use for FREE.
Okay, so we have considered all the requirements for starting a freight brokerage business. We also took it further by analyzing and drafting a sample freight forwarding service marketing plan template backed up by actionable guerrilla marketing ideas for freight brokerage companies. So let’s proceed to the business planning section.
Why Start a Freight Brokerage Business?
Starting a freights brokerage business requires knowing how to play the perfect role in helping clients ensure that their trucks are filled and also help shippers find reliable carriers. The freight brokerage business is one that has existed early in the 20th century, and is guided by government regulations that have become less restrictive than it was earlier.
This means it is now easier to go into this business, entry barrier isn’t so high anymore. The business can be quite lucrative especially if the entrepreneur understands the environment and has good network that will make it easy for him or her to find shippers and carriers.
Before starting this business, you would need to seek the services of a business consultant who thoroughly understands the industry and who is familiar with the environment your business is operating from. Another important aspect of the business that must not be overlooked is a business plan. Below is a sample freight brokerage business plan;
A Sample Freight Brokerage Business Plan Template
- Business Overview
The freight industry is one that is valued at a $123 billion even though there are no dominant companies holding a high market value in this industry. The growth for this industry has been projected at 5.3% between the periods of 2011 to 2016. There are more than 40,000 freight brokerage businesses employing more than 280,000 people.
Demand in this industry has continually grown over the past five years and this is because the industry has been able to surpass the period before recession, as domestic freight services were pushed up by more demands.
Emerging markets have also contributed to the growth of this industry, as trade has grown tremendously, leading to a high demand for the industry’s trade-related services. According to IBISWorld, the industry over the next five years to 2021 is expected to grow slowly due to limited trade volumes and values.
Most of the activities of the industry is largely concentrated within states in the Southeast, Mid-Atlantic and West that have high levels of trade, manufacturing, and other commercial activities. The southeast region for instance has a large population and commercial base and accounts for 23.4% of the industry’s share.
Asides the industry’s share, the southeast also as the largest population share in the United States of America at 25.4% and also is a home to major ports in the country. The region is also known to host a large proportion of freight employees and support maintenance.
Getting good drivers that are qualified has been hard or freight brokers as their shortage are the limiting factors for the trucking industry. Lack of qualified drivers is why the growth of many fleets has slowed down.
Due to economy downturn, international shipping will slow down and this will affect the freights industry globally, as domestic economics in other countries will be affected as well.
Freight brokers will be able to make decisions that will increase efficiency and also improve customer service due to new technologies, as fleets will implement new technologies in all their trucks so that there will be accurate tracking of packages.
Freight Broker Business Plan – Executive Summary
D&L Freight Brokerage LLC is a leading and standard freight brokerage firm here in Detroit – Chicago as well as in the whole of the United States of America. Our vision is to ensure that we offer quality management services to all our long and short distance customers, as well as ensuring that we not only meet the expectations of our customers but that we surpass them as well.
We are established with the sole intention of generating revenue and making profit through offering of our core service as well as other services that we will be offering to boost our income and have a solid bottom line as well. Our offering of other services is to enable us compete favorably against our competitors here in Chicago.
This industry is one that is filled with intense competition, which means that most services offered are uniform in nature; which is why we have introduced dry freights and special haulage in order to stand out from our competitors in the industry.
This is a service based business that is involved with financial management and so requires a high level of ethics and transparency. We intend to ensure that we do not misrepresent the facts to our customers and as such will always offer the highest service in the industry to all our customers.
Because we know how important building the right business structure is, we intend to source for and hire competent and professional staff that understand the business thoroughly and are also aligned to our goals and are committed to ensuring that we achieve these intended goals and objectives. Our employees are always updated as regards the trends in the industry, which makes them better than their counterparts in the industry.
We intend to ensure that we take good care of our employees and as such we will provide the best welfare package that can be found in similar start-ups here in Detroit – Chicago as well as round the United States of America. We also intend to ensure that our employees undergo regular training that will not only enhance their skills but will also improve productivity for our business as well.
We love to take good care of our customers and as such we intend to offer excellent customer service. All our employees are duly trained and understand that customers are so precious and should be treated well. They are also updated about the trends in the industry and as regards the company’s policies in order to give clients accurate information.
D&L Freight Brokerage LLC, is owned and run by Dean and Linda James, two siblings who have over 25 years experience in the freights brokerage industry. Their experience in this industry will allow us achieve our goals and objectives on time.
- Our Products and Services
At D&L Freight Brokerage, LLC, our intention is to provide management service for long and short distance freight services in an efficient and effective manner to our customers both corporate and domestic in our target market.
However, we also intend to create multiple sources of income in addition to our core service which will include specialty hauling and consultancy services. This is so because we intend to generate revenue and make profits that will sustain the business.
We also intend to ensure that our revenue generation is under the permissible law of the United States of America and within reasonable ambition. Therefore some of the services we intend to offer are;
- Management of Long and short distance freight services
- Management of Dry Freights
- Specialty haulage
- Consultancy and advisory services
Our Vision Statement
Our vision is to become a recognized brand in the freight brokerage industry and create a service-based firm that will not only meet but exceed the expectations of our customers.
- Our Mission Statement
In order to achieve our stated vision, we will ensure that we provide customers with the most satisfying shipping experience. We will also build a business structure that will ensure we achieve our vision of not only attracting but maintaining our various customers as well.
- Our Business Structure
Due to our desire at achieving excellence in our business, we intend to build a freight brokerage firm that is not only standard but will be a force to be reckoned with in the industry and because of this, we have laid that plans and processes that will ensure that we get it right from the beginning by hiring competent and hardworking employees to all the available positions in our firm.
The employees that we would be hiring to our firm are those that understand the objectives and goals of our business and are willing and committed to ensuring that we are able to not only meet our goals and desired objectives but also exceed it as well. Due to this we are willing to go the extra mile to ensure that our employees work in a well structured environment.
Due to the wide range of services we intend to offer our various customers, we will hire more employees than the conventional freight brokerage firm and this is due to the fact that our different services will open up more tasks that will involve more people have to man it with the different responsibilities therein.
Below, therefore is the business structure we intend to build at D&L Freights Brokerage, LLC;
- Chief Executive Officer
- Operations Manager
- Human Resources & Administrative Manager
- Marketing Executives
- Customer Service Executives
- Security Guard
Roles and Responsibilities
Chief Executive Officer
- Drafts the policies and business structures that will be used to move the organization forward
- Drafts the budget that will be used by the organization for the business year
- Ensures that drafted policies are implemented and that ineffective ones are modified or removed
- In charge of ensuring that costs are controlled and that the organization is kept on track financially
- Helps sets goals and also establish policies for the various departments
- Use cost-benefit analysis in order to improve efficiency in the organization
Human Resources & Administrative Manager
- Sources for and hires competent employees on behalf of the organization
- Conducts performance appraisal on the employees regularly and also ensures that the welfare package of the employees are in order
- Ensures that the administrative functions of the organization continues smoothly
- Provides and prepares financial analysis, reports and statements for the organization
- Responsible for ensuring the organization’s books is duly reconciled with that of the bank
- Prepares tax documents for the organization and ensures that they are submitted to the tax authorities
- In charge of conducting marketing survey that will open up new opportunities for the organization
- Conducts direct marketing on behalf of the organization
- Drafts effective marketing strategies and policies for the organization
Customer Service Executives
- In charge of answering inquiries, feedbacks and complaints from customers and ensures that they are promptly attended to
- Keeps an accurate database of customers on behalf of the organization
- Stays abreast of company policies as well as industry trends so as to give customers accurate information
- In charge of ensuring that the premises are always secured at all times
- Scrutinizes those that go in and out of the organization
- Provides security tips and information to all staffs in the organization
- Ensures that premises are kept clean at all times
- Ensures that cleaning supplies are always in stock
- Carries out any other duties as directed by the human resources and admin manager
Freight Broker Business Plan – SWOT Analysis
The fact that we intend to run a standard freight brokerage business has led us to seek the services of a reputable business consultant who not only understands the industry thoroughly but also the business as well and knows how we would likely fare in this environment.
The analysis to be used by the business consultant is one that is very objective and will look at all our attributes and use this to decide if it would be worthwhile going into the business and being able to face all those that we would likely have to compete with in this environment. This critical review was done based on our environment as well as similar start-ups such as our here in Chicago.
In determining how best to know if we were suitable for this kind of environment, our hired business consultant used our strengths, weaknesses, opportunities and threats to be able to give us the different scenarios we were likely to face in the course of running the business.
Therefore, below is the SWOT analysis that was conducted by the business consultant on behalf of D&L Freight Brokerage, LLC;
We have several attributes in our advantage. First of all, we have a positive public image that customers have come to identify with and this is due to the fact that we take how we project ourselves very seriously and ensure that all our employees do this as well.
Another strength in our favour is the fact that we have an excellent customer service, and this is because we take our customers very seriously and have strategies in place that has ensured that we retain more than 80% of our customers.
Also, our loyal customers are given discounts every once in a while as we strive to not only meet but surpass the expectations of our customers. We are proud of our facilities as they are among the best in the industry across similar start-ups such as ours. We also have a strong partnership with the carrier industry, which leads to a better lead time for our shipper clients.
As a new business, we are running on a tight budget and do not have the necessary money to advertise as we wish or get the needed employees to come and work for us. We will also be facing stiff competition from other freight businesses here in Chicago. Also as a start-up, we have less experience as regards how the industry works as against our already established competitors. We also have limited knowledge about the business we intend going into.
There are several available opportunities in this industry for us as trainings are available in almost every aspect and we plan to take advantage of these several opportunities. We also intend to build several networking opportunities with others in the industry. There will always be new carriers and shippers coming into the business which gives us enough opportunities as we wish.
There are several threats that we are likely to encounter during the course of starting our business and this is having to contend about changing government policies regarding the freights industry another threat is having to compete intensely with rivals in the same environment. We know that threats can crop up any time and we are prepared on how to tackle these threats.
Freight Broker Business Plan – MARKET ANALYSIS
- Market Trends
Most of the goods that are transported in the United States of America are carried via trucks. According to statistics, 60% of the annual gross tonnage moved in the United States in the transportation network out of sea, land and air, are moved by trucks.
These trucks which are under various categories (semi-trucks, motor carriers, and 18-wheelers) usually move freight from one destination to the other in the United States of America. All cargoes ranging from consumer goods, general cargoes to perishable goods are usually transported via these trucks.
There has been a sudden seven-fold increase regarding the freight brokerage firm in the year 2013 from 1970. This is because the industry has more stringent regulations than before, an increase in standard and also there are more sources of income than before.
Lastly, trucks remain a very important mode of goods transportation. 70% of all freight is still via trucks and these trends will likely no change in the near future. However, the issues for most freight brokers are the shortage of truck drivers, as this issue keeps plaguing this industry.
- Our Target Market
Even though it might look like the target market is a bit limited to certain individuals and companies for freight businesses, the target market is wider than what might be presumed by us, which is why we have decided to conduct a thorough market survey based on our location here in Chicago.
The intention of conducting a market survey on our target market is to ensure that we have an idea of what to expect from our target market so as to be able to draft effective strategies that would suit these strategies. From the result of our marketing survey, we are in business to offer our services to the following group of people;
- Shipping companies
- Carrier companies
- Small Businesses
- Corporate Executives
- Educational institutions
Our Competitive Advantage
Our intention at D&L Freights Brokerage, LLC is to ensure that we provide quality management services to all our customers either short or long distance freights. We also aim to ensure that we not only meet our customers’ expectations but exceed it as well by offering them services that will surpass what they can get from our nearest rivals here in Detroit – Chicago, as well as round the United States of America as well.
However, for us to achieve this, we intend to have several laid down strategies in place that will allow us have the intended edge over our competitors.
One of the first competitive advantages we have over our competitors is the fact that we have a huge network with the carrier industry, which means that shippers who approach us have an advantage over those who don’t as they will be able to move their goods faster. Asides from that, it also means we would get and disseminate vital industry information that will be of huge benefits to our clients.
Due to our desire to build the best business structure, we intend to source for and hire only those who not only understand the business and are professionals but who also understand our core dreams and vision and are committed and willing to ensuring that they are achieved within the set milestones.
We intend to ensure that not only do our employees work in a competitive, creative and conducive environment but that they are also suitably paid better than their counterparts in similar start-ups such as our across the industry an country.
We will also make sure that our employees are well trained so that they would be miles apart from their colleagues in the same industry in terms of skills while also boosting the productivity efficiency for our freight brokerage business.
Finally, we are a huge believer of customer excellence and as such, we would make sure that our customers are well taken care of. Our employees are well trained in attending to customers and making sure that they get what they want. These competitive strategies will make us stand out as we should from others.
Freight Broker Business Plan – SALES AND MARKETING STRATEGY
- Sources of Income
D&L Freight Brokerage, LLC is established with the aim of generating revenue and making profit in the freights brokerage industry here in the United States of America. In order to achieve our aim of making enough profit that will sustain our company and also boost our bottom line; we intend to offer various services to all our customers.
The services we intend to offer in order to generate revenue for our freight brokerage business are;
- Management of Long and short distance freight services
- Management of Dry Freights
- Specialty haulage
- Consultancy and advisory services
The freight brokerage business has come to stay as shippers and carriers require the services of a broker to manage transactions between them.
We are strategically located in Detroit – Chicago and will have it easy taking on the available market to generate the revenue we need to grow our business. We are also confident that we meet our target and make profit within a year of starting this business.
Our optimism is borne out of the assumptions that we got after critically evaluating the freights industry and what chances we had of ever making it in the industry. We sought the services of a reputable sales consultant here in Detroit – Chicago, who thoroughly understands the business, and who gathered and used data and information peculiar to start-up businesses such as ours here in Detroit – Chicago.
His findings for D&L Freight Brokerage, LLC, which are below was based on certain assumptions and findings that was based on our location;
- First Fiscal Year-: $250,000
- Second Fiscal Year-: $400,000
- Third Fiscal Year-: $850,000
N.B: It should be noted that the above sales projection were conducted based on what was obtainable in the industry as at the time of the projections. Also several factors such as downturn of the economy and the arrival of a major competitor for the above three year period were put into consideration. It should also be noted that should there be any change in these factors, the sales projected figures might increase or decrease.
- Marketing Strategy and Sales Strategy
Marketing is a very important aspect of any business and so it is necessary that any business that intends to generate the revenue that will boost the business and ensure that it succeeds deploys effective marketing strategies. Having the right marketing strategies will also allow us penetrate the market and position our business in such a way that will allow us gain a huge share of the market, and allow us favorably compete with our competitors here in Detroit – Chicago as well as round the whole United States of America.
In order to have the marketing strategies that would be just right for us, we intend to conduct a market survey that will allow us have detailed information about the market we intend going into. Conducting a market survey is very important as it would allow us have an idea of the characteristics of those in our target market and how well they would respond to our strategies.
We intend to hire the services of a reputable marketing consultant who understands the market thoroughly so as to help us draft the right strategies that would be beneficial to our business and help us also to win a large percentage of the available market here in Chicago as well as all over the United States of America.
We will also ensure that we empower our marketing team in order to develop and modify marketing strategies that will be aligned to our corporate sales and marketing goals at D&L Freight Brokerage, LLC. In summary, D&L Freight Brokerage LLC will adopt the following marketing and sales strategies in order to be able to deliver our wide range of services;
- Ensure that we introduce our freight brokerage business to major shipping and carrier industry. We will also formally introduce our business to major stakeholders in the industry here in Detroit – Chicago as well as round the United States of America
- Throw a large party to announce the launch of our business in such a way as to generate interest and create awareness about our freight brokerage business
- Advertise our freight brokerage business on local newspapers and business magazines as well as on radio and television stations
- Engage in direct marketing for the benefit of our business
- Ensure that our business is listed on online and offline (yellow pages) directories
- Use social media platforms such as our Facebook page to market our business
Freight Broker Business Plan – Publicity and Advertising Strategy
Having the right publicity is very vital to our business and we intend to ensure that we deploy several strategies that will allow us have the right publicity that will positively promote the image of our business; especially as the industry we are in is a very competitive one. Our publicity strategies are aimed at not only penetrating the market and gaining a huge share but also ensuring that these actions allow us boost our bottom line.
Due to this, we intend to hire the services of a brand consultant that will help us draft strategies that will ensure that we positively communicate our brand to the public. The publicity strategies that we would use for our business will allow us grow our brand strongly here in Chicago and all around the whole United States of America as well. We intend to also adopt the use of technologies in communicating our brand to the target market.
Some of the publicity and advertising strategies we intend to use in growing our business at D&L Freight Brokerage, LLC are;
- Using social media platforms such as Facebook, Twitter and Google Plus as well as other social media to effectively publicize our freights brokerage business
- Ensuring that we install our billboards in strategic locations all over Detroit – Chicago
- Distribute handbills and paste our fliers in conspicuous but strategic places
- Place adverts in local newspapers, magazines as well as on radio and television stations
- Engage in seminars, conferences, fairs and special events in order to network with others and gain prospective clients
- Engage in relevant programs in our community
Our Pricing Strategy
Setting the price for intangible services can be very different from that of physical goods and products; however setting our own price will be determined on a whole lot of factors as we intend to conduct a research that will allow us know what price is right for us as well as affordable for our customers.
We will ensure that the price we set for our services are one that will cover our overhead and running costs and will also be one that is within the range of what our near competitors are offering.
However, in order to attract more customers and increase awareness for our business, we intend to offer a discount in our first three months of operations to all our customers. We have taken a thorough look into how this will affect our bottom line and after a careful study have found that even though our revenue for these three months might be affected a bit, we would not be running at a loss.
- Payment Options
Because we understand that our customers are diverse, we at D&L Freights Brokerage, LLC have come up with different payment options. The different payment options we intend to offer all our customers are;
- Payment via cash
- Payment via check
- Payment via bank draft
- Payment via credit card
- Payment via online payment portal
The above payment portal were chosen after deliberating on what would be suitable for us as well as our clients These payment options would work well for both parties without any hitches.
- Start – Up Expenditure (Budget)
Every business requires capital in order to start up and run successfully. This is because there are a number of things that the capital is supposed to be spent on. Even though this is a service oriented business, there are certain things that are supposed to be in place such as having to lease a facility, payment of employees’ salaries and utility bills for a definite period of time, and other such necessities.
The areas where we therefore intend to use our generated capital on are;
- Fees for registering and incorporating our freight brokerage business – $750
- Obtaining of zonal and regulatory licenses and permits, as well as accounting software – $1,250
- Insurance coverage (General liability and workers compensation) – $2,000
- Marketing expenses for general brokerage firm activities as well as promotional activities to promote grand launching of D&L Freight Brokerage, LLC – $5,000
- Cost of hiring reputable business consultants – $3,000
- Operational costs for the first 6 months (employee salaries, utility bills) – $140,000
- Leasing of office facility for a period of one year including renovations – $27,000
- Cost of purchasing furniture, computers, printers, fax machines, phones – $10,000
- Cost of launching a website – $1,000
- Cost of our opening party – $5,000
- Miscellaneous – $5,000
From the above break down, we would need the sum of $200,000 to be able to start up and successfully run our freight brokerage business here in New York City. It should be noted that the bulk of the above amount will be used to pay the salaries of employees for at least 6 months, as well as lease a facility from where we would operate our business from.
Generating Funding / Startup Capital for D&L freights Brokerage Business
D&L Freights Brokerage LLC, is a business owned and run by Dean and Linda James, two siblings with enough experience in the freights business. They have no plans as at now to have an external business partner, which is why they have decided to limit the sourcing of their capital to just three major sources.
The three areas where we intend generating our start-up capital from are;
- Generate part of the start-up capital from our joint personal savings
- Source for soft loan from close friends
- Apply for loan from bank
N.B: We have been able to generate the sum of $50,000 from our joint personal savings and $25,000 from our close friends. We sought the sum of $125,000 from our bank, and after intense negotiation, we agreed that the loan will be repaid in 7 years with a 5% fixed interest rate. All the necessary documents have been signed and we have been told that the money will be credited to our account by the end of the week.
Freight Broker Business Plan – Sustainability and Expansion Strategy
Just like any other business, our freight brokerage is established to not only make profit but remain sustained for a long period of time which might lead to expansion. In order for us to achieve sustainability and expansion, we intend to ensure that we give quality services that will allow our customers remain loyal to us, we also intend to re-invest into our business as well as build a sound business structure that will allow us remain in business for as long as we want.
Customers are the lifeblood of any business and as such we intend to ensure that they are treated well in such a way as to not only make them repeat customers but also ones that will refer others to our business. According to statistics, it is more expensive to attract than retain customers, so we will do all we can to ensure that we not only meet but exceed the expectations of our customers in order to create a high customer satisfaction.
We not only have competent staff that will ensure that we attain customer satisfaction; we will also draft the right strategies that will ensure that we achieve this as well.
In order to ensure that the bottom line of our freight brokerage business is not only boosted but sustained, we will create multiple sources of income and then re-invest the earnings from these multiple sources back into our business. This will allow our business not to constantly seek for external funds by which to run itself but use the revenue it generates to sustain itself.
We are concerned about building a solid business structure and due to this, we intend to go the extra mile in ensuring that we source for and hire only competent and professional employees to handle the different roles that will be assigned to them in order to ensure that our goals and objectives are achieved.
We will ensure that our employees are well trained and receive continuous training that will not only enhance their skills but also increase productivity for our business. We also intend to ensure that our employees are well taken care of by making sure that they have a great welfare package that is better than what similar freight brokerage firms start-ups are offering. We know that if we engage these three measures suitably well, we would be able to sustain and expand our freight brokerage business.
Check List / Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party / launching party planning: In Progress
- Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress
- Purchase of trucks: Completed