go site If you are just starting your own freight brokerage or if you already own a small freight brokerage, then you should be aware of the risks and rewards that are part of your growing business. You should decide what type of growth best fits your business during your growth phase. There are two models that you can base your company’s growth on – the agency growth and the organic growth.
Agency growth can be seen among agent-based businesses that provide back-office support to brokers. They handle tasks such as billing, accounting, carrier qualifications, insurance, and other administrative tasks that a broker can outsource so that the latter can focus more on the business side of his company. In this model, agents produce revenue growth on a commission-only basis, reducing indirect costs but diluting profit margins.
If you opt to pursue this model, then it would help to think of agents as customers rather than employees: They tend to be aggressive, independent business people and you work for them. You need to build solid systems and establish them in place to ensure low costs-per-transaction and sound financial management to handle cash flows.
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Model#2 Organic Growth
see The organic model puts you in charge of your own business, but it requires more work. The typical steps to achieve an organic growth are as follows:
enter Hire personnel – you need to hire your own employees. Though experienced transportation professionals may cost more, they can hit the ground running and bring a book of business knowledge along with them. With their help, you can expand your business into new segments or regions quickly.
go site If you choose to hire less experienced, and even newbies in the business, they generally cost less, have a steeper learning curve, and could bring with them any bad habits they learned from their old jobs.
- go here Find your niche – Most brokers new to the business mostly deal with truckload dry van freight simply because it is the easiest and most available freight, However, the niche is already filled to the brim with large players, giving small margins. Instead, focus on looking for your niche, providing an edge in terms of customer service, flexibility, and focus on a particular region or type of cargo.