Freight Brokerage Business Plan Template
If you want to start a Freight Brokerage business or expand your current Freight Brokerage business, you need a business plan.
The following Freight Brokerage business plan template gives you the key elements to include in a winning Freight Brokerage business plan.
Freight Brokerage Business Plan Example
I. Executive Summary
Business Overview
[Company Name] is a trusted freight company in [Location]. We proudly transport shipments of all types across any distance within the United States, from across town to across the country. We are committed to providing fast and cost-efficient transportation services to our clients while ensuring all shipments are safely and securely delivered.
Services
The following are the services that [Company Name] provides:
- Local and statewide shipping
- Shipping within the continental US
- International shipping
- Bulk shipments
Customer Focus
[Company Name] will primarily serve manufacturers and distributors operating within a 100-mile radius of [Location], as well as local households. The demographics of these customers are as follows:
- 150,000+ businesses and companies
- 61,347 residents
- Average household income of $87,100
Management Team
[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. With 10 years of experience as a freight broker, and a degree in Business Administration from University of ABC, he is uniquely qualified to lead the company to success.
Success Factors
[Company Name] is well-positioned to succeed for the following reasons:
- We will be one of the few freight brokerage companies in the area. Furthermore, we have surveyed the local population and identified the pain points left by other shipping companies.
- Our location is populated with a large contingent of regional transplants who have relatives living outside the area
- The management team has a track record of success in the industry.
- The freight brokerage business has proven to be a successful business in the United States.
Financial Highlights
[Company Name] is seeking total funding of $260,000 of debt capital to launch. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Store design/build: $100,000
- Working capital: $160,000 to pay for marketing, salaries, and lease costs until [Company Name] is cash-flow positive
Topline projections over the next five years are as follows:
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Revenue | $738,000 | $1,716,272 | $2,007,297 | $2,331,125 | $2,694,524 |
| Total Expenses | $639,595 | $1,021,515 | $1,110,127 | $1,190,308 | $1,273,715 |
| EBITDA | $98,405 | $694,757 | $897,169 | $1,140,817 | $1,420,809 |
| Depreciation | $16,560 | $16,560 | $16,560 | $16,560 | $16,560 |
| EBIT | $81,845 | $678,197 | $880,609 | $1,124,257 | $1,404,249 |
| Interest | $18,554 | $16,235 | $13,916 | $11,596 | $9,277 |
| Pre Tax Income | $63,291 | $661,962 | $866,694 | $1,112,661 | $1,394,972 |
| Income Tax Expense | $22,152 | $231,687 | $303,343 | $389,431 | $488,240 |
| Net Income | $41,139 | $430,276 | $563,351 | $723,230 | $906,732 |
II. Company Overview
Who is [Company Name]?
[Company Name] is a trusted freight company with strong capability in moving goods both locally and throughout the world. Its advanced technology and commitment to customer service makes it the ideal choice for fast, cost-efficient transportation services. What’s more, [Company Name] has a reputation for ensuring that all its shipments are safely and securely delivered.
[Company Name]’s History
[Company Name] has been [City]’s leading freight broker for 10 years. It was in [year] when [Founder’s name] established the company’s first office in [Location]. Having worked in progressively responsible positions in the industry throughout his early career, [Founder] is well-versed in how to operate a successful transportation company.
The idea came to him to launch a freight brokerage company as he recognized the potential for improvement within existing companies. [Company name]’s success has led to steady growth, and it now operates [x] offices in [Location].
Since incorporation, the company has achieved the following milestones:
- Developed the company’s name, logo and website
- Determined transport companies for both local and international shipments
- Determined supply requirements
- Began recruiting key employees with experience
- Surveyed other possible locations for expansion
[Company Name]’s Products/Services
The following are the services that [Company Name] provides:
- Local and statewide shipping
- Shipping within the continental US
- International shipping
- Bulk shipments
III. Industry Analysis
The Freight Brokerage industry has increased over the past five years, as rising economic activity led to bolstered consumer spending. E-commerce sales and industrial output levels have each increased, boosting domestic freight volumes as a result and generating demand for freight brokerage services from manufacturers and online retailers. Further, as total US trade volumes increased, demand for international freight services that require brokerage has risen.
The popularity of next-day delivery services and other online shopping services has also positively affected the industry. It has become increasingly important to ship individual orders and warehouse stocks across the country with relatively little notice. This has resulted in greater demand for industry services, because brokerages offer a solution to excess demand for transportation services, facilitating a range of services from long-distance freight and international trade to last-mile delivery.
Over the next five years, industry revenue is anticipated to grow as well. Economic growth, increased consumer spending and e-commerce sales, are expected to cause freight volumes to rise. Furthermore, total trade value is forecast to continue to grow in the United States, which will generate revenue from importers and exporters.
IV. Customer Analysis
Demographic Profile of Target Market
[Company Name] will primarily serve businesses operating within a 100-mile radius of [Location], that may need local and international shipping services for their products or supplies. Additionally, the area we serve is populated with a large contingent of regional transplants who have relatives living outside the area.
The precise demographics of the city in which our location resides is as follows:
| San Antonio | Fort Worth | |
|---|---|---|
| Total Population | 1,526,097 | 890,725 |
| Square Miles | 505 | 355 |
| Population Density | 3,789 | 2,710 |
| Forecasted Population Change by 2014 | -0.02% | -3.76% |
| Population Male | 48.04% | 48.84% |
| Population Female | 51.96% | 51.16% |
| Target Population by Age Group | ||
| Age 18-24 | 3.68% | 3.52% |
| Age 25-34 | 5.22% | 4.50% |
| Age 35-44 | 13.80% | 13.91% |
| Age 45-54 | 18.09% | 18.22% |
| Target Population by Income | ||
| Income $50,000 to $74,999 | 11.16% | 6.00% |
| Income $75,000 to $99,999 | 10.91% | 4.41% |
| Income $100,000 to $124,999 | 9.07% | 6.40% |
| Income $125,000 to $149,999 | 9.95% | 8.02% |
| Income $150,000 to $199,999 | 12.20% | 11.11% |
| Income $200,000 and Over | 32.48% | 54.99% |
Customer Segmentation
The Company will primarily target the following customer segments:
- Local Businesses and Residents: The area in which the Company operates has a significant population of families with relatives outside the city, state, or country. The area is also home to a large number of businesses.
- Manufacturers and distributors: There are many local businesses that import and export goods to and from all over the US.
V. Competitive Analysis
Direct & Indirect Competitors
Freight Solutions
Freight Solutions provides broker logistics software solutions. Its transportation management software enables intermediaries ranging from start-ups to enterprise-class businesses to run operations and accounting from a single system. The company serves freight brokers and 3PLs.
The company was founded on the premise that brokers need trucks, and carriers need loads. In 2016, the company combined networks with ABC Logistics to create one super-database, the industry’s largest and most diverse on-demand freight exchange for spot truckload freight.
Quality Logistics
Quality Logistics specializes in arranging freight transportation using reefers (refrigerated trucks), vans, and flatbeds — moving in excess of 500,000 loads each year. The trucking brokerage company serves more than 7,000 clients across the US, Canada, and Mexico, ranging from small businesses to Fortune 500 organizations. Founded in 1997, Quality Logistics has contracts with carriers that include single owner operators and large fleets.
The company arranges for independent carrier companies and owner/operators to transport its customers’ freight and they manage the shipment while it is on the road.
Logistics Express
Founded in 1976, Logistics Express matches shippers’ loads with a network of truckload and less-than-truckload (LTL) carriers. The brokerage firm arranges the transport of dry, refrigerated (predominantly produce), and flatbed cargo. It operates from 30 offices throughout more than 20 US states. Logistics Express assists shippers in managing transportation costs, tracking and tracing shipments, managing appointments, and executing freight forward management services overseas. Customers have included Kroger, Dole Food, and Safeway.
Competitive Pricing
Competitor pricing is highly variable and dependent on location, transportation distance and service and load type.
Competitive Advantage
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Safe and secured shipments: [Company Name] ensures that all of its transactions and shipments are in good hands. Customer satisfaction is its number one priority.
- Client-oriented service: [Company Name] will have full-time staff on site to help customers with their needs and inquiries.
- Management: [Founder’s Name] has been extremely successful working in the freight brokerage business and will be able to use his previous experience to assure clients that [Company Name] will do the job right.
- Relationships: Having lived in the community for 35 years, [Founder’s Name] knows many of the local leaders, news personalities, and other influencers.
VI. Marketing Plan
The [Company Name] Brand
The [Company name] brand will focus on the Company’s unique value proposition:
- Safe and secured local and international shipments of any package type, size, or weight
- Service built on long-term relationships and personal attention
- Premium services at affordable prices
Promotions Strategy
[Company Name]’s promotions strategy to reach its market includes:
Billboards
[Company name] will secure a billboard in the area that captures the attention of residents and local businesses. The billboard will draw attention to the new business and its service offering.
Referrals
[Company name] understands that the best promotion comes from satisfied customers. The Company will encourage its clients to refer other businesses by providing economic or financial incentives for every new client produced.
Local Publications
[Company name] will run regular advertisements to maintain exposure to relevant markets. Community newspapers and publications, and similar channels will be a major promotion effort.
Customer Loyalty Programs
[Company name] will create a winning customer loyalty program to keep its best clients coming back again and again. Long-term customers will have the opportunity to participate in the loyalty program, and referrals will be rewarded as well.
Direct Mail
[Company Name] will send out direct mail pieces to households and businesses within its target area. These pieces will provide general information on [Company Name] and offer discounts.
VII. Operations Plan
Functional Roles
In order to execute on [Company Name]’s business model, the Company needs to perform several functions. [Company name] anticipates hiring X employees, divided into the following roles.
Service Functions
- Sales
- Dispatch
- Broker agent
- Customer service/cash register functions
Administrative Functions
- General & administrative functions including marketing, bookkeeping, etc.
- Sourcing transport companies/couriers, General liaison
Milestones
[Company name]’s long term goal is to become the most trusted freight brokerage company in the [state] area. The following are a series of steps that lead to our vision of long-term success. [Company Name] expects to achieve the following milestones in the following [xyz] months:
| Date | Milestone |
|---|---|
| [Date 1] | Finalize lease agreement |
| [Date 2] | Design and build out [Company Name] facility |
| [Date 3] | Hire and train initial staff |
| [Date 4] | Launch [Company Name] |
| [Date 5] | Reach break-even |
VIII. Management Team
Management Team Members
[Company Name]’s most valuable asset is the expertise and experience of its founder, [Founder’s Name]. Having been in the freight industry his entire career, he brings extensive knowledge and experience to the operation of the business.
[Founder] graduated from the University of ABC with a degree in Business Administration.
[Other person’s name] will serve as the assistant. He has extensive experience in operations and marketing.
Hiring Plan
[Founder] will serve as the store manager. The following personnel are what the company needs to hire:
- Freight Brokers
- Sales
- Dispatch
- Customer service/cash register functions
- Administrative assistant
- Marketing/PR Manager
IX. Financial Plan
Revenue and Cost Drivers
[Company Name]’s revenues will come primarily from the shipping deals the company closes.
The major cost drivers for the company’s operation will consist of:
- Salaries
- Lease
- Shipment transportation fees
- Marketing/Advertising campaigns
Capital Requirements and Use of Funds
[Company Name] is seeking total funding of $260,000 of debt capital to launch. The capital will be used for funding capital expenditures and location build-out, hiring initial employees, marketing expenses and working capital.
Specifically, these funds will be used as follows:
- Store design/build: $100,000
- Working capital: $160,000 to pay for marketing, salaries, and lease costs until [Company Name] is cash-flow positive
Key Assumptions
The following table reflects the key revenue and cost assumptions made in the financial model:
| Number of client contracts | Annually |
|---|---|
| FY 1 | 40 |
| FY 2 | 45 |
| FY 3 | 55 |
| FY 4 | 65 |
| FY 5 | 70 |
| Average Commission | 70% |
| Annual Lease ( per location) | $50,000 |
5 Year Annual Income Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| Revenues | ||||||
| Product/Service A | $151,200 | $333,396 | $367,569 | $405,245 | $446,783 | |
| Product/Service B | $100,800 | $222,264 | $245,046 | $270,163 | $297,855 | |
| Total Revenues | $252,000 | $555,660 | $612,615 | $675,408 | $744,638 | |
| Expenses & Costs | ||||||
| Cost of goods sold | $57,960 | $122,245 | $122,523 | $128,328 | $134,035 | |
| Lease | $60,000 | $61,500 | $63,038 | $64,613 | $66,229 | |
| Marketing | $20,000 | $25,000 | $25,000 | $25,000 | $25,000 | |
| Salaries | $133,890 | $204,030 | $224,943 | $236,190 | $248,000 | |
| Other Expenses | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | |
| Total Expenses & Costs | $271,850 | $412,775 | $435,504 | $454,131 | $473,263 | |
| EBITDA | ($19,850) | $142,885 | $177,112 | $221,277 | $271,374 | |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 | |
| EBIT | ($56,810) | $105,925 | $140,152 | $184,317 | $234,414 | |
| Interest | $23,621 | $20,668 | $17,716 | $14,763 | $11,810 | |
| PRETAX INCOME | ($80,431) | $85,257 | $122,436 | $169,554 | $222,604 | |
| Net Operating Loss | ($80,431) | ($80,431) | $0 | $0 | $0 | |
| Income Tax Expense | $0 | $1,689 | $42,853 | $59,344 | $77,911 | |
| NET INCOME | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 | |
| Net Profit Margin (%) | - | 15.00% | 13.00% | 16.30% | 19.40% |
5 Year Annual Balance Sheet
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 | |
| Accounts receivable | $0 | $0 | $0 | $0 | $0 | |
| Inventory | $21,000 | $23,153 | $25,526 | $28,142 | $31,027 | |
| Total Current Assets | $37,710 | $113,340 | $184,482 | $286,712 | $423,416 | |
| Fixed assets | $246,450 | $246,450 | $246,450 | $246,450 | $246,450 | |
| Depreciation | $36,960 | $73,920 | $110,880 | $147,840 | $184,800 | |
| Net fixed assets | $209,490 | $172,530 | $135,570 | $98,610 | $61,650 | |
| TOTAL ASSETS | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 | |
| LIABILITIES & EQUITY | ||||||
| Debt | $317,971 | $272,546 | $227,122 | $181,698 | $136,273 | |
| Accounts payable | $9,660 | $10,187 | $10,210 | $10,694 | $11,170 | |
| Total Liabilities | $327,631 | $282,733 | $237,332 | $192,391 | $147,443 | |
| Share Capital | $0 | $0 | $0 | $0 | $0 | |
| Retained earnings | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| Total Equity | ($80,431) | $3,137 | $82,720 | $192,930 | $337,623 | |
| TOTAL LIABILITIES & EQUITY | $247,200 | $285,870 | $320,052 | $385,322 | $485,066 |
5 Year Annual Cash Flow Statement
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| CASH FLOW FROM OPERATIONS | |||||
| Net Income (Loss) | ($80,431) | $83,568 | $79,583 | $110,210 | $144,693 |
| Change in working capital | ($11,340) | ($1,625) | ($2,350) | ($2,133) | ($2,409) |
| Depreciation | $36,960 | $36,960 | $36,960 | $36,960 | $36,960 |
| Net Cash Flow from Operations | ($54,811) | $118,902 | $114,193 | $145,037 | $179,244 |
| CASH FLOW FROM INVESTMENTS | |||||
| Investment | ($246,450) | $0 | $0 | $0 | $0 |
| Net Cash Flow from Investments | ($246,450) | $0 | $0 | $0 | $0 |
| CASH FLOW FROM FINANCING | |||||
| Cash from equity | $0 | $0 | $0 | $0 | $0 |
| Cash from debt | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| Net Cash Flow from Financing | $317,971 | ($45,424) | ($45,424) | ($45,424) | ($45,424) |
| SUMMARY | |||||
| Net Cash Flow | $16,710 | $73,478 | $68,769 | $99,613 | $133,819 |
| Cash at Beginning of Period | $0 | $16,710 | $90,188 | $158,957 | $258,570 |
| Cash at End of Period | $16,710 | $90,188 | $158,957 | $258,570 | $392,389 |
