If you are starting a freight brokerage business, it is time to get started building your business plan. Why is a completed business plan crucial for a freight brokerage? There are some quick answers to this question:
- Freight brokers are involved in the legalities of transporting freight across the country; business plans need to be cemented into place in the event of inspections.
- Freight brokers manage several complicated components of connecting ships to carriers.
- Freight brokers assist in load matches, which may require negotiations and conflict resolution.
In addition to the above, a completed business plan is foundational to building a business focused on success and long-term growth. So, let’s get started!
Define the Target Market for Your Freight Brokerage Firm
Discovering and defining the target audience for your freight brokerage creates a perspective of the ideal client for your brokerage. You’ll want to observe your current or potential clients to determine if they are representing ships or if they are posting freight jobs for a third party entity. Are you customers negotiating pricing with other brokers? If so, how are prices determined and are there numerous negotiations involved? It is crucial to identify your customers and build a demographic around that model customer.
Determine Who Your Competitors Are and What They Do Best
Just as defining the characteristics of your customers helps create a picture or graph of your “model” customer, determining who your competitors are and what they offer gives insight into the pricing models offered, the value-added services extended, and the marketing strategies created by your competitors. Gather the information needed about your competitors to put into place a value-added offer to your clients or a take-away discount or value for your services. You will want to exceed any offers or value-added discounts offered by your competitors to overcome the threat of the competition.
Secure Funding and Develop Financial Projections
Most business plans are developed primarily to secure funding from investors, lenders, banks or other lending institutions. Whether or not you require funding to start your freight brokerage firm, you’ll want to fully develop your own business plan to jump ahead of any future needs for an infusion of capital or fund-raising. Because of this, you’ll complete the current funding available and the allotments needed for the launch of your business.
You’ll also assess possible future funding needs in your financial projections, which will complete the financial picture for your firm. If, at any time, your brokerage requires an infusion of funding, you’ll be able to take the complete business plan to investors or lenders for consideration.
Create Effective Marketing Strategies
Although the marketing channels for a freight brokerage firm may be somewhat limited, there are always creative marketing ideas that will work to capture new customers. When considering the market channels your clients use, think about the ways in which your customers like to receive information. Do your customers enjoy the internet and have continuous connectivity? Do your customers enjoy social media outlets, such as Facebook and Instagram? If newspapers or periodicals are popular in the freight shipping business, consider using targeted ads to reach your customers. Use the medium most accepted by your customers to get the best return for the money you’ll spend on marketing campaigns.
Prepare Your Freight Brokerage Business Plan
With the major sections completed, review this business plan for freight broker template and complete additional sections as needed. You’ll want to add sections detailing your research of the model customer for your freight brokerage and those of your competitors and the various services they offer to customers. In addition, you’ll add the funding and financial projections as calculated, and the marketing strategies under consideration. Finally, you’ll add the mission and objectives of your freight brokerage firm and an operations plan for day-to-day business practices.
There are multiple elements that lead to a successful business plan for a freight brokerage firm and a large part of that success will come from the leaders of the freight brokerage who set the stage for excellence in every aspect of the business. From connecting ships to carriers, assisting in load matching, searching for the best carriers at the best pricing, and negotiating complicated legalities of transportation laws, freight brokers are masters of the freight business and a completed business plan simply supports the purpose of their efforts.