Table of Content

    Do you want to start Freight Broker business plan?

    Do you want to learn how to start a freight broker company? If so, you’re in the right place. This business plan for freight broker will teach everything from how to start a freight brokerage to all the management operations needed. The best thing about freight broker business is that you don’t need a ton of experience to get started. All you need are some street smarts and a good business plan.

    In this document, we will be explaining how to develop a good business plan that can guide your company. You can also follow the business plan of a related business like business plan for real estate or an import/export business plan for more examples. Here, we will provide the business plan of Carry On, a Freight Brokerage Startup operating in Newark, New Jersey.

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    Executive Summary

    2.1 The Business

    Carry On will be a freight broker startup started by Harry Doofenshmirtz. The startup will aim to provide freight brokerage services to various producers and distributors around Newark, New Jersey. The business will ensure that the shipment from shippers is adequately handled and delivered by the Cargo company.

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    2.2 Management of Freight Broker Company

    To make sure that every aspect of the freight broker startup is managed properly, efficient planning needs to be done. And what better way to learn how to start your own freight brokerage business than through a business plan. A business plan will answer your question about “what do you need to start a freight brokerage”?

    Since this is a business plan for a startup, it will also tell you how to become a freight broker from home. You can use this as a guide to make business plans for investment. That way, you can put a planned-out persona in front of your investors.

    Apart from this plan, you can also refer to a related business plan like a non-emergency medical transportation business plan as it has similar services to the business at hand.

    2.3 Customers of Freight Broker Company

    The customers of Carry On will belong to all industry domains including clothing, sports goods, and furniture, etc. However, our most prominent customers will include:

    • Carriers
    • Producers
    • Distributors
    • Manufacturers
    • Import/Export Business

    2.4 Business Target

    Our target is to become a reliable and trusted freight brokerage in town connecting suppliers to carriers when they most need it.

    Our financial targets to meet for the five years of launch are demonstrated below:

    Freight Broker - 3 Years Profit Forecast

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    Company Summary

    3.1 Company Owner

    Harry Doofenshmirtz will be the owner of Carry On. He attained a business diploma from a local college and then worked up his way in a distribution warehouse. However, he wanted to start his own business. So, after much thought, he left his post and started Carry On.

    3.2 Why the Freight Broker company is being started

    Through his job, Harry noticed that most of the good companies around him suffered because of a lack of good carriers. It seemed that even though there were carrier companies available, it was much too time consuming for a company to compare their merits. So, Harry decided to bridge this communication and time gap between the two domains by starting a freight broker business of his own.

    3.3 How the Freight Broker company will be started

    Step1: Plan Everything

    One of the first steps when learning how to start a freight broker business is to plan out everything. Every aspect of the business should be planned in some detail beforehand to avoid any big surprises. For planning your business, you can use this freight broker business plan sample for Carry On. You can also use a Muskoka airport business plan for guidance as it has the same structure. In this freight broker business plan pdf, the entire start up of Carry On will be planned out.

    Step2: Define the Brand

    The next step after planning the operations is to advertise the business so that it attracts customers. At this time, you should develop a brand image for your company and highlight its human aspirations and values to attract more people.

    Step3: Establish Your Corporate Office

    To start of the business, Harry rented out an office space in the marketing sector of town. He will now work to hire employees and make contacts with shippers and carriers.

    Step4: Establish a Web Presence

    Note

    Internet presence is an important part of any business today to get more reach to customers.

    For this purpose, Harry decided he will get a one-page website developed through which customers will be able to contact the business. He also decided to establish social media presence for his business.

    Step5: Promote and Market

    The last step is to develop a thorough marketing plan for your company and then stick to it for advertising your business.

    Freight Broker - Startup Cost

    Start-up Expenses  
    Legal $122,800
    Consultants $0
    Insurance $23,000
    Rent $32,280
    Research and Development $10,000
    Expensed Equipment $57,800
    Signs $3,400
    TOTAL START-UP EXPENSES $249,280
    Start-up Assets $222,800
    Cash Required $209,000
    Start-up Inventory $39,000
    Other Current Assets $278,000
    Long-term Assets $282,800
    TOTAL ASSETS $1,031,600
    Total Requirements $1,280,880
    START-UP FUNDING
    Start-up Expenses to Fund $249,280
    Start-up Assets to Fund $1,031,600
    TOTAL FUNDING REQUIRED $1,280,880
    Assets
    Non-cash Assets from Start-up $1,293,400
    Cash Requirements from Start-up $122,800
    Additional Cash Raised $50,000
    Cash Balance on Starting Date $35,000
    TOTAL ASSETS $1,501,200
    Liabilities and Capital
    Liabilities $18,000
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $52,200
    Other Current Liabilities (interest-free) $0
    TOTAL LIABILITIES $70,200
    Capital
    Planned Investment $1,280,880
    Investor 1 $0
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    TOTAL PLANNED INVESTMENT $1,280,880
    Loss at Start-up (Start-up Expenses) $150,120
    TOTAL CAPITAL $1,431,000
    TOTAL CAPITAL AND LIABILITIES $1,501,200
    Total Funding $1,280,880

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    Services

    Before you start your freight broker business startup, you need to know some details. There are requirements to become a freight broker and one of these requirements happens to be deciding services. For getting a freight broker license, you will need to know several details of your business. That way you can plan everything effectively.

    Here, we are providing the service details of freight brokerage business plan. You can also look at something similar like atravel agency business plan for guidance. In this free freight broker business plan, the services offered by Carry On will be:

    • Networking

    One of the main jobs of Carry On as a freight brokerage will be to connect carriers with the supplier customers they need and vice versa.

    • Carrier Evaluations

    Carry Out will evaluate all the carriers available for the job required by the shipper to make sure that each shipper is matched with the best carrier. The company will cater to the location and type of goods to be transported by the shipper to make sure that only the best partnership is achieved between the two parties.

    • Shipment Monitoring

    One of the services of Carry On that make it so convenient is that the company will be responsible to track the shipment from the Shippers. And shippers can just relax and focus on other work. The company will track the cargo regularly to ensure that everything is safe.

    • Compliance

    Carry On will also ensure compliance of the carriers to the requirements by shippers. Some shipments include things that might be vulnerable to damage or need certain conditions for transport. Carry On will make sure that the carriers fulfill all the requirements.

    • Price Negotiations

    In addition to carrier evaluations, our company will also cater to the price range of its clients. Multiple options will be considered, and prices will be negotiated with both shipper and carrier parties to achieve at a middle ground that is good for both.

    Marketing Analysis of Freight Broker Company

    Before you start a freight brokerage business, you need to know your customers and competitors in-depth. In short, getting well versed about the target market is one of the steps to become a freight broker. For this purpose, you can conduct a marketing analysis as a part of your freight broker business plan. Your marketing analysis should analyze market trends with your financial goals to figure out pricing of your services. This analysis will help you learn how to be a successful freight broker.

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    If you don’t know how to conduct a marketing analysis and you want to know “how can I become a freight broker?”, you can use this business plan. This document will tell you ways to start your own freight brokerage business pdf. It will outline all the components of a broker business model and help you do a target market analysis for your business.

    Here, we are providing the marketing analysis for Carry On. You can use this template to learn how to become freight broker agent.

    5.1 Market Trends

    According to VerifiredMarketResearch, Freight Brokerage industry is valued at around $1.164 Billion in the US. The industry is expected to grow at a rate of 36% and reach around $14 Billion by 2028. There is an increase in the need for convenience in intermediate operations that is driving the growth of the industry. And it is expected to do so in the coming years as well making any investment in the industry an excellent choice.

    5.2 Marketing Segmentation

    The potential customers of Carry On are divided into the following groups:

    Freight Broker - Marketing Segmentation

    Business Plan for Investors

    5.2.1 Carriers

    Carriers will be cargo companies that will be responsible for the delivery of goods. Our company will also be providing them business by acting as an intermediate party. So, these will be our most consistent and reliable customers. And they will primarily utilize our connection services.

    5.2.2 Producers

    Our secondary customers will be the producer companies that produce raw materials or products and need them to be taken to their clients. They are expected to utilize our services most often.

    5.2.3 Distributors

    Our third target customers will be Distributors who buy materials and products in bulk and then send them to various warehouses and shops for selling. There are quite a considerable number of distributor companies around Newark in need of freight brokers, so we expect to receive these customers regularly.

    5.2.4 Manufacturers

    This will be our fourth target group of customers. There are a few manufacturing industries set up around Newark. Therefore, we expect to receive business from them quite often.

    5.2.5 Import/Export Business

    Lastly, we will cater to the import/export businesses in and around town. The trend of selling imported goods has increased, especially in the fashion industry. So, we expect a fair amount of business from the local import/export businesses.

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Carriers 27% 27,800 33,360 40,032 48,038 57,646 10.00%
    Producers/ Manufacturers 26% 22,700 27,240 32,688 39,226 47,071 10.00%
    Distributors 24% 24,360 29,232 35,078 42,094 50,513 10.00%
    Import/ Export Businesses 23% 21,100 25,320 30,384 36,461 43,753 11.00%
    Total 100% 95,960 115,152 138,182 165,819 198,983 10%

    5.3 Business Target

    • To become the best freight brokerage business in New Jersey.
    • To expand the business to include not just Newark but entire New Jersey.
    • To earn a profit margin of $50k/month by the end of two years.
    • To maintain cordial relationships between the shippers and carriers.

    5.4 Product Pricing

    Our prices will be a little higher than if the shippers were to hire carriers on their own. But for this price, we will offer our clients a stress-free management of their goods and delivery operations.

    Marketing Strategy

    To make sure that you are recognizable amongst your competition, you will need to come up with several competitive aspects for your freight brokerage start up. For this, you need to focus on developing a marketing strategy. This can include anything from advertisements to freight broker business cards.

    For a good marketing of your business, you will need to analyze many things such as freight broker software cost and costs of different ways of advertisement.

    In this freight brokerage business plan pdf, we are detailing the marketing strategies of Carry On. However, you can take help from marketing strategies of other businesses as well. For instance, from a subscription box business plan.

    6.1 Competitive Analysis

    • We have a lot of ways of communicating with clients including direct meetings, social media, and website so our clients have more ease.
    • We will offer stress-free delivery operations for our clients.
    • We will implement good discussion practices so that all the client’s requirements are met.

    6.2 Sales Strategy

    • We will advertise our business through local ads, social media, and Google Ads.
    • We will offer discounts to our first 20 clients.
    • We will also offer great packages for our long term and regular clients.

    6.3 Sales Monthly

    Freight Broker - Sales Monthly

    6.4 Sales Yearly

    Freight Broker - Sales Yearly

    6.5 Sales Forecast

    Freight Broker - Unit Sales

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    Networking 250 265 281
    Carrier Evaluations 225 239 253
    Shipment Monitoring 250 265 281
    Compliance & Negotiations 200 212 225
    TOTAL UNIT SALES 925 981 1,039
    Unit Prices Year 1 Year 2 Year 3
    Networking $850.00 $986.00 $1,143.76
    Carrier Evaluations $950.00 $1,102.00 $1,278.32
    Shipment Monitoring $1,200.00 $1,392.00 $1,614.72
    Compliance & Negotiations $800.00 $928.00 $1,076.48
    Sales
    Networking $212,500.00 $261,290.00 $321,282.18
    Carrier Evaluations $213,750.00 $262,827.00 $323,172.08
    Shipment Monitoring $300,000.00 $368,880.00 $453,574.85
    Compliance & Negotiations $160,000.00 $196,736.00 $241,906.59
    TOTAL SALES $886,250.00 $1,089,733.00 $1,339,935.70
    Direct Unit Costs Year 1 Year 2 Year 3
    Networking $250.00 $275.00 $288.75
    Carrier Evaluations $200.00 $220.00 $231.00
    Shipment Monitoring $300.00 $330.00 $346.50
    Compliance & Negotiations $250.00 $275.00 $288.75
    Direct Cost of Sales
    Networking $62,500.00 $72,875.00 $81,109.88
    Carrier Evaluations $45,000.00 $52,470.00 $58,399.11
    Shipment Monitoring $75,000.00 $87,450.00 $97,331.85
    Compliance & Negotiations $50,000.00 $58,300.00 $64,887.90
    Subtotal Direct Cost of Sales $232,500.00 $271,095.00 $301,728.74

    Personnel plan

    The business of a freight broker franchise depends a lot on its customer service and relations. Therefore, Harry put together a list of all the employees that will be necessary for the success of business. Additionally, he also included specific criteria in the freight broker business plan to hire workers.

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    7.1 Company Staff

    • 1 Co-Manager to help in overall operations
    • 3 Supply Chain Executives
    • 2 Broker Assistants
    • 1 Web Developer to develop and maintain webpage
    • 1 Sales Executives to organize and promote sales
    • 1 Accountant
    • 2 Drivers
    • 1 Receptionist

    7.2 Average Salary of Employees

     Personnel Plan      
    Year 1 Year 2 Year 3
    Co Manager $45,000 $49,500 $54,450
    Supply Chain Executives $75,000 $82,500 $90,750
    Broker Assistants $55,000 $60,500 $66,550
    Web Developer $28,000 $30,800 $33,880
    Sales Executive $35,500 $39,050 $42,955
    Accountant $25,000 $27,500 $30,250
    Drivers $40,000 $44,000 $48,400
    Receptionist $22,000 $24,200 $26,620
    Total Salaries $303,500 $333,850 $367,235

    Financial Plan

    To ensure the success of your business, you need to control freight broker startup costs. It is essential to manage everything efficiently so that your business doesn’t go into a loss. A good financial plan will keep your company from becoming a freight brokerage business for sale.

    In your financial plan, you need to detail all the costs necessary to run your business as well as the ways you will earn revenue. In this business plan, we are detailing the financial plan of Carry On. But you can take help from other business plans as well such as hot shot trucking service business plan.

    8.1 Important Assumptions

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 8.12% 8.20% 8.26%
    Long-term Interest Rate 8.40% 8.44% 8.47%
    Tax Rate 24.03% 24.21% 24.60%
    Other 0 0 0

    8.2 Break-even Analysis

    Freight Broker - Break-even Analysis

     Break-Even Analysis  
    Monthly Units Break-even 5340
    Monthly Revenue Break-even $132,500
    Assumptions:
    Average Per-Unit Revenue $231.00
    Average Per-Unit Variable Cost $0.62
    Estimated Monthly Fixed Cost $163,800

    8.3 Projected Profit and Loss

     Pro Forma Profit And Loss    
    Year 1 Year 2 Year 3
    Sales $886,250 $1,089,733 $1,339,936
    Direct Cost of Sales $232,500 $271,095 $301,729
    Other $0 $0 $0
    TOTAL COST OF SALES $232,500 $271,095 $301,729
    Gross Margin $653,750 $818,638 $1,038,207
    Gross Margin % 73.77% 75.12% 77.48%
    Expenses
    Payroll $303,500 $333,850 $367,235
    Sales and Marketing and Other Expenses $145,000 $148,000 $156,000
    Depreciation $2,300 $2,350 $2,500
    Leased Equipment $0 $0 $0
    Utilities $2,900 $3,000 $3,100
    Insurance $2,100 $2,100 $2,100
    Rent $2,900 $3,000 $3,200
    Payroll Taxes $24,000 $25,000 $27,000
    Other $0 $0 $0
    Total Operating Expenses $482,700 $517,300 $561,135
    Profit Before Interest and Taxes $171,050 $301,338 $477,072
    EBITDA $171,050 $301,338 $477,072
    Interest Expense $0 $0 $0
    Taxes Incurred $34,210 $60,268 $95,414
    Net Profit $136,840 $241,070 $381,658
    Net Profit/Sales 15.44% 22.12% 28.48%
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    8.3.1 Profit Monthly

    Freight Broker - Profit Monthly

    8.3.2 Profit Yearly

    Freight Broker - Profit Yearly

    8.3.3 Gross Margin Monthly

    Freight Broker - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Freight Broker - Gross Margin Yearly

    8.4 Projected Cash Flow

    Freight Broker - Projected Cash Flow

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $51,000 $55,080 $59,486
    Cash from Receivables $22,000 $23,760 $25,661
    SUBTOTAL CASH FROM OPERATIONS $73,000 $79,570 $85,936
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $74,000 $79,000 $85,000
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $42,000 $42,000 $45,000
    Bill Payments $27,000 $28,000 $31,000
    SUBTOTAL SPENT ON OPERATIONS $69,000 $70,000 $76,000
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $69,000 $74,520 $80,482
    Net Cash Flow $21,000 $23,000 $25,000
    Cash Balance $27,000 $30,000 $33,000

    8.5 Projected Balance Sheet

     Pro Forma Balance Sheet    
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $275,000 $308,000 $338,800
    Accounts Receivable $24,000 $26,880 $30,213
    Inventory $4,300 $4,816 $4,900
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $282,000 $315,840 $355,004
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $19,400 $21,728 $24,444
    TOTAL LONG-TERM ASSETS $24,400 $27,328 $30,744
    TOTAL ASSETS $294,000 $329,280 $370,440
    Liabilities and Capital Year 4 Year 5 Year 6
    Current Liabilities
    Accounts Payable $18,700 $20,944 $23,541
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $19,000 $21,280 $23,919
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $15,000 $16,800 $18,883
    Paid-in Capital $30,000 $30,000 $31,000
    Retained Earnings $53,000 $57,770 $63,547
    Earnings $193,400 $210,806 $231,887
    TOTAL CAPITAL $285,000 $310,650 $341,715
    TOTAL LIABILITIES AND CAPITAL $300,000 $329,280 $370,440
    Net Worth $293,400 $319,806 $351,787

    8.6 Business Ratios

     Ratio Analysis        
    Year 1 Year 2 Year 3 INDUSTRY PROFILE
    Sales Growth 7.25% 8.03% 8.90% 3.00%
    Percent of Total Assets
    Accounts Receivable 9.21% 10.20% 11.31% 9.80%
    Inventory 5.39% 5.97% 6.62% 9.90%
    Other Current Assets 2.11% 2.34% 2.59% 2.40%
    Total Current Assets 149.80% 151.00% 152.00% 158.00%
    Long-term Assets 11.55% 11.60% 11.64% 12.00%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.90% 4.94% 4.98% 4.34%
    Long-term Liabilities 0.00% 0.00% 0.00% 0.00%
    Total Liabilities 7.59% 7.65% 7.72% 7.38%
    NET WORTH 100.45% 101.25% 102.19% 110.00%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.60% 97.15% 99.87% 99.00%
    Selling, General & Administrative Expenses 93.56% 96.09% 98.78% 97.80%
    Advertising Expenses 1.52% 1.56% 1.60% 1.40%
    Profit Before Interest and Taxes 41.50% 42.62% 43.81% 33.90%
    Main Ratios
    Current 34 35 36 32
    Quick 33 33.8 34.645 33
    Total Debt to Total Assets 0.18% 0.18% 0.17% 0.40%
    Pre-tax Return on Net Worth 74.08% 74.89% 75.00% 75.00%
    Pre-tax Return on Assets 96.30% 101.12% 106.17% 111.30%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 33.56% 34.60% 35.67% N.A.
    Return on Equity 55.80% 57.53% 59.31% N.A.
    Activity Ratios
    Accounts Receivable Turnover 7.7 7.8 7.8 N.A.
    Collection Days 100 100 100 N.A.
    Inventory Turnover 32.4 34.02 35 N.A.
    Accounts Payable Turnover 15.6 16 16.3 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 2.5 2.5 2.6 N.A.
    Debt Ratios
    Debt to Net Worth -0.04 -0.03 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $244,000 $257,664 $272,093 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.85 0.87 0.89 N.A.
    Current Debt/Total Assets 1% 0% 0% N.A.
    Acid Test 29 29.12 29.16 N.A.
    Sales/Net Worth 2.1 2.2 2.2 N.A.
    Dividend Payout 0 0 0 N.A.

    FAQs

    1. How do I write a freight brokerage business plan?

    You can develop a business plan for your freight brokerage by following this freight broker business plan sample.

    2. How much do freight brokerage owners make?

    The income of a freight broker depends on a lot of things including freight broker startup costs, freight broker process, and prices of services.

    3. Are freight brokerages profitable?

    Starting a freight brokerage company can prove profitable if it is managed efficiently and smartly.

    4. How much does a freight broker make a year?

    If you are learning how to be a freight broker agent, you might be wondering how much they make in a year. Though the accurate number depends on the success of the business, on average, freight brokers make around $60,000 in a year.

    Download Freight Broker Business Plan Sample in pdf