A summary of your business goals. An overview of the industry, including your specific market and the factors which shape it. An overview of your customer base. You’ve got to have some idea how you’re going to get money. You should identify possible shippers and carriers. If you can’t, at least identify how you will go about getting them. Try to be as specific as possible. A section which identifies your competitors, their strengths and weaknesses, and how you will adapt and survive in their midst. A marketing plan. Explain how you will tell possible customers about your business. A detailed analysis of your financial plan, including startup costs, revenue projections, and the road to turning a profit.
Luckily, there are alternatives for individuals who can’t spend several years in a de facto apprenticeship. If that sounds like you, investigate freight broker training programs to see which one is right for you. Since freight broker training programs aren’t accredited, it’s difficult to gauge their relative quality. In order to get an idea of the reputation of a school you’re investigating, research the instructor’s experience and check out their rating with the Better Business Bureau.
Sole proprietorships are the worst type of business format, unless you have so little start-up capital that you can’t afford registration fees for other business forms. It’s a bad format because it doesn’t treat the business’ assets and liabilities as separate from your personal assets. That means if your business loses a lawsuit, the party you owe money to can seize your personal property to satisfy the judgement. A corporation is the most expensive type of business to set up, but provides the most protection from liability, perpetuity, and the easiest access to capital. A limited liability company, or LLC, combines a lot of good features from sole proprietorships and corporations. Like a sole proprietorship, they are fairly cheap to register. Like a corporation, they provide some protection from liability.
There is always a filing fee for registering a business, and the fee varies substantially from jurisdiction to jurisdiction. You can find out what the fees and procedures are at any of the fifty secretary of state websites, which can be found at http:// http://www. nass. org/.
Applying for an EIN is a quick process, and you should be able to complete it in fifteen minutes or less. However, you’ll have to complete it in one session; there’s no saving your work. Apply at https://www. irs. gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online.
One good way to network with others in the industry is by joining the Transportation Intermediaries Association, or TIA. Members gain access to a directory that rates and lists carriers, making it an invaluable resource for a new broker.
The fee for registration is $300, and you can register at https://portal. fmcsa. dot. gov/UrsRegistrationWizard/. There are two steps for registration and licensing. The first is getting the USDOT number, and the second is getting the Motor Carrier Operating Authority. Although these are two separate steps, you complete them through the same portal, at https://www. fmcsa. dot. gov/registration.
For example, if one of your carriers’ trucks break down and they are not able to deliver the shipper’s goods, the goods still have to be delivered. That’s where the bond comes in. The bonding company steps in and pays for another carrier to deliver the shipper’s goods, so that the job can be completed. [8] X Trustworthy Source U. S. Small Business Administration U. S. government agency focused on supporting small businesses Go to source
One type of necessary policy is called contingent cargo insurance, and it covers any gaps in the carrier’s insurance policy. For instance, if a carrier causes harm to another, but the carrier’s insurance isn’t extensive enough to cover the damages, the injured party might sue you. This policy will cover your defense costs. You’ll also need a general liability policy for business. Although the premium and the quote will be specific to you, this is not a specialty product, and you can get it though most major insurers. You can also get it through the same insurer that issues the contingent cargo policy. As when shopping for any type of insurance, you should get several quotes, check the financial ratings of the insurer through a rating’s agency, and inquire about possible discounts from bundling.
You should have a minimum of $10,000 to start out with, whether that’s in cash or through a line of credit. Liquid funding is more important to a freight brokerage than most startups, because the broker often pays the carrier for the shipment before the shipper pays the broker.
The software will allow you to automate many functions, track your drivers, and generally be more productive. There are many software programs, but Tailwind, Broker PRO, and Freightview are all highly rated. [12] X Research source
A great way to jump into the business and establish your reputation is by utilizing online dispatch services. FreightFinder. com, uShip. com, and Direct Freight Services all run online marketplaces allowing you to find truckers at will.
