How to protect your broker business
Running a successful broker business requires hard work, dedication, and planning for any unexpected bumps before they arise. Before you book your first load, you need to create a plan that accounts for the legal side of the business when it comes to compliance and regulations and develop a plan to navigate them efficiently.
In part 3 of our Broker Webinar Series, Truckstop’s Brett Jendra outlines how you can create a solid and thorough business plan. He includes tips for assessing risk and putting processes in place to protect your business, and your reputation.
Laying the groundwork
You likely got into the broker business to be your own boss and embark on a lucrative career. However, starting a brokerage business that stands the test of time requires thinking though all the details to avoid downtime and negligence.
Here are tips for creating a solid business plan.
Set relationship terms
Strong relationships with your shippers and carriers can make or break your business. And getting off to the right start sets the tone. It’s important to establish detailed business terms up front with clear expectations. This creates transparency and realistic expectations. Consistency is key and should be considered in all aspects of your communication from negotiation to the payment of invoices in a timely manner.
Understand market shifts
Your business operations are a mix of factors you can control, and those you can’t. You must consider fluctuations that will influence your money flow and how you’ll operate. Work to create business efficiencies to capitalize when times are good so that when change comes, you will be able to withstand any circumstance.
Business variables to consider:
- Fuel prices
- Industry cycles and seasonality
- Surplus or shortage of goods
- Surplus or shortage of trucks available
- Shipper relationships, reputations, and seasonality
- Carrier relationships and reputations
- Industry cycles of supply and demand
- Cash flow fluctuations
Expect the unexpected
Bad things happen. Trucks break down, carriers run late, shipments get delayed—it’s unavoidable but if you have a plan in place, you can minimize the impact on your trucking business. The key to avoiding major problems and delays is having a backup plan for every load and communicating it to everyone involved. Your carriers with be appreciative and be more likely to work with you again when they know you have a proactive mindset.
Be prepared, not reactive
As a freight broker, you know big rewards require big risks. For business longevity, you need to be aware of insurance and compliance requirements you’re liable for when you hire a carrier or agree to a shipping agreement.
Your top priorities are insurance and legal risk and regulations, knowing who is responsible, for what, and when, and having systems in place to double check that every load meets all the requirements.
Protecting yourself starts with carrier onboarding. Once you find a carrier and agree on rates, you need to properly vet them to make sure they are legally approved to haul the load, every time. This process also gives you an opportunity to start building a carrier relationship and ensure you’re onboarding a quality carrier for the long-term.
Your carrier onboarding should include but is not limited to:
- Verifying Authority with DOT & FMCSA
- Verifying government issued tax ID
- Verifying proper auto and cargo insurance
- Confirming carrier working profile completion
- Checking carrier safety scores
- Checking authority
- Confirming carrier legal agreement and terms are completed
This isn’t a one-and-done process. Licenses expire, authority needs renewed, violations happen, and insurance policies need to be paid. It’s up to you to confirm every carrier is fit to drive on every haul. Completing this process manually can take up to 3 business days, costing you time and loads on the road. But with the help of tools and software solutions, like FMCSA, RMIS carrier onboarding and monitoring, and carrier compliance and onboarding, you can complete the whole verification process in just minutes.
Practice protecting your business
When it comes to a brokerage business, protecting your reputation is paramount and it starts with a solid business plan. To be successful, you need to incorporate processes that prepare you for changing market conditions to be consistent and compliant. You can manage risks by implementing carrier onboarding processes and continue to monitor compliance and regulations on every haul. Taking the time to put standards in place will keep your business running and your income steady.
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