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The job of a freight broker is to connect shippers who have goods to transport and carriers who have the capacity to move those goods. Today’s freight brokerage market is rich with opportunity, but taking advantage of the ease of getting started and straightforward licensing requirements does not guarantee future success. With countless licensed freight brokers coming into the mix every year, it is essential to know what it takes to be successful — and profitable — from the start. That begins with recognizing the ten most common reasons why new freight brokers fail, and how to avoid these pitfalls whenever possible.
Every new business owner, whether operating a sole proprietorship or a large company, needs to know where they are headed if they want to be successful. Having a sound business plan is one way to accomplish this task, but it may seem like a daunting task when starting a freight brokerage business. Failing to create one can mean trouble for the business, and quickly. Be sure to take the time to project out the potential marketing strategies, customer acquisition methods, pricing models, and business financials before jumping into a new brokerage business.
One of the most important requirements in becoming a freight broker is the federal regulation that requires specific licensing. New freight brokers, regardless of how much industry experience they have, need to acquire a freight broker license as well as post a freight broker bond or trust to operate legally. Misunderstanding these requirements or failing to meet them before starting a brokerage can lead to negative consequences down the line.
The freight brokerage industry is highly competitive, with newly licensed brokers entering the market each year. With so many options, shippers and carriers need to know that your brokerage is both available and able to take on new business. Creating a marketing strategy is necessary if you want to remain relevant to your current or potential customers. Consider options for print or radio ads, as well as technology-driven marketing campaigns through e-mail, social media, or the web.
Steps for Avoiding Unnecessary Costs
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