Freight Brokerage Business Plan
Over the past 20+ years, we have helped over 9,000 entrepreneurs and business owners create business plans to start and grow their freight broker businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a freight broker business plan template step-by-step so you can create your plan today.
What is a Freight Broker Business Plan?
A business plan provides a snapshot of your freight brokerage firm as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan for a Freight Brokerage
If you’re looking to start a new freight brokerage business or grow your existing freight broker business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your freight business in order to improve your chances of success. Your freight brokerage business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for Freight Brokerages
With regards to funding, the main sources of funding for a freight brokerage business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
Personal savings is the other most common form of funding for a freight brokerage business. Personal savings and bank loans are the most common funding paths for freight broker businesses.
How to Write a Business Plan For a Freight Brokerage
If you want to start a freight brokerage business or expand your current one, you need a solid business plan. Below are links to each section of your freight brokerage business plan:
Executive Summary
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of freight brokerage business you are operating and the status. For example, are you a startup, do you have a freight brokerage business that you would like to grow, or are you operating a chain of freight brokerages?
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the freight brokerage industry. Discuss the type of freight brokerage business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
Company Analysis
In your company analysis, you will detail the type of freight brokerage company you are operating.
For example, you might operate one of the following types of freight brokers:
- Agent Model: this type of business focuses on a freight agent overseeing every aspect of the freight movement and working as a self-employed individual, but still being considered as working under the umbrella of a corporate brand.
- Asset-Based: this type of business is when a trucking company that has a fleet of trucks and truck drivers has the authority and access to brokerage freight for themselves.
- 3PL: this type of freight broker is where the company takes over and manages every step of the transportation process by offering freight transportation, warehousing and storage, distribution, and supply chain fulfillment.
In addition to explaining the type of freight brokerage business you will operate, the Company Analysis section of your business plan needs to provide background on the business.
Include answers to questions such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of customers served, number of positive reviews, number of long-term contracts, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Industry Analysis
In your industry analysis, you need to provide an overview of the freight brokerage industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the logistics industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy, particularly if your research identifies market trends.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your freight brokerage business plan:
- How big is the freight industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the freight broker market for your business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
Customer Analysis
The customer analysis section of your freight brokerage business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: shippers, manufacturers, producers, distributors, and suppliers.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of freight broker business you operate. Clearly, shippers would respond to different marketing and sales strategies than wholesale distributors, for example.
Try to break out your target market in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the customers you seek to serve. Because most freight broker businesses primarily serve customers living in the same city or town, such demographic information is easy to find on government websites.
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
Finish Your Freight Broker Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
Competitive Analysis
Your competitive analysis should identify the direct and indirect competitors your business faces and then focus on the latter.
Direct competitors are other freight brokers.
Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes independent truckers and logistics companies. You need to mention such competition as well.
With regards to direct competition, you want to describe the other freight brokers with which you compete. Most likely, your direct competitors will be house flippers located very close to your location.
For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
- What types of cargo do they ship?
- What types of shipping options do they offer (FTL, LTL, reefer, oversize, etc.)?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide real-time tracking services of each shipment?
- Will you provide transportation services that your competitors don’t offer?
- Will you provide good customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Marketing Plan
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a freight brokerage, your marketing plan should include the following:
Product: In the product section, you should reiterate the type of freight broker company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to a freight broker, will you provide real-time and fully electronic tracking services, electronic or manual booking services for drivers, international freight services, or a 24 hour support phone number?
Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the freight brokerage services you offer and their prices.
Place: Place refers to the location of your freight broker company. Document your location and mention how the location will impact your success. For example, is your business located in or near a warehouse, an office setting, completely remote, etc. Discuss how your location might be the ideal location for your customers.
Promotions: The final part of your freight broker marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:
- Advertising in local papers and magazines
- Reaching out to local websites
- Flyers
- Social media marketing
- Local radio advertising
Operations Plan
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your freight brokerage business, including negotiating contracts with carriers, finding efficient shipping routes, booking shipments with shippers and carriers, and tracking shipments.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your 100th shipment, a date when you secure your 10th shipping client, or when you hope to reach $X in revenue. It could also be when you expect to expand your business to a new city.
Management Team
To demonstrate your freight broker business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally, you and/or your team members have direct experience in managing freight brokers. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing logistic operations or successfully running small businesses.
Financial Plan
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.
Income Statement: an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you book 5 shipments a day or 5 per week? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets: Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your freight broker business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement: Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. 
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a freight brokerage business:
- Location build-out including design fees, construction, etc.
- Cost of equipment and supplies
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
Appendix
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include a copy of your freight broker license, contracts you have completed with shippers and/or truck drivers and carriers, etc.
Summary
Putting together a business plan for your freight broker is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the freight broker industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful freight broker business.
Download a Freight Broker Business Plan PDF
You can download our freight broker business plan PDF to help you get started on your own business plan.
If you are looking for the quickest and easiest way to complete your business plan, Growthink’s Ultimate Business Plan Template has numerous features not available in the free template including its financial projections template which automatically calculates your complete five-year financial projections including income statements, balance sheets, and cash flow statements.
Finish Your Freight Broker Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your Freight Broker business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
OR, Let Us Develop Your Plan For You
Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.
See how Growthink’s professional business plan consulting services can create your business plan for you.
Other Helpful Business Plan Articles & Templates
Business Plan Template & Guide For Small Businesses
How To Write A Great Business Plan
Trucking Company Business Plan