Starting New Brokerage With Seasoned Players In Trucking

Yukon,

Thank you. I guess I need to clarify my statement a little. I did not mean to imply that the brokerage business is a bad choice. Nor did I mean to imply that there is no money to be made in brokerage. Instead, I meant to address things from a strictly investment standpoint. As an independent investor, who does not intend to work in the operations of the company (see OP, "As an investor at the moment, I am also open to working day-to-day operations as needed, but..."), brokerage is a poor choice. That is not because the industry is starving. It isn't. Instead, there are many other investment opportunities that have a much greater realized return on initial investment.

You are correct in saying that a C-store, Subway, or other franchise opp has a higher initial capital requirement. However, as I recall (when I was looking into a Subway investment a few years ago), C-stores (high initial investment, ROI @ 100% w/i 18 mos or less) followed by Subway (more licensing req, medium initial inv, ROI @ 100$ w/i 12 mo or less depending on market) have the highest rate of return within 24 months of any opportunity, are easier to operate (i.e., doesn't take specialized knowledge), less risky (i.e., don't run the risk of losing everything if you make one poor choice, don't go to jail for things that seem unethical but not illegal, etc), and have a higher resale value (don't want to do this until you die, makes a great retirement plan).

If the OP is willing to be MORE than just an investor, and wants to work more than as needed, brokerage is great! It's a rewarding career, can be lucrative, and competition helps the economy, so I'd be more than willing to welcome him or her into the ranks, given the contingency the new company is not one of those than destroys our name and undermines our image!

If that's the case, than you are absolutely right. Cut out the CEO, if an investor is needed, find one with similar intentions and partner up (although I'd be cautious here, the return isn't worth the risk IMO), learn the process, and get started. An initial investment of around $3-5k will get you up and running, and you can grow from there.

If that's the case, I'm not a lawyer, but I'd incorporate. LLC just doesn't provide as many protections. Limited Liability is trumped by no liability. S-Corp usually provides tax savings, depending on your personal financial situation. If a partnership is required, S-Corp with partnership through shares is the best option, as this provides clearly defined ownership rights and percentages by way of majority share ownership (if you own 51% of shares, you effectively control the company through voting rights, you can't be outvoted).

There's a lot of business intricacies that apply to all businesses that need to be understood, and there's a lot of freight brokerage laws, ethics, and best practices that need to be understood, as well. OP, if it's something you want to do, don't half-### it as an investor, jump on in and do it! And best of luck to you, regardless of the path you choose. If you want advice or opinions, I'm always willing to help. Everyone starts somewhere.

-Chris

 

Interesting

 

My son works for a broker ( 10 yrs now ). In his early years I asked if he would consider working for a competitor. He was / is quite happy but mentioned he is bound by so many angles involving "anti compete" that it would take a "full truck load " of lawyers to get him out . Good luck.

 

I have often thought this myself. These 'trainers' promise you fortunes and claim they make xxx,xxx/yr. Well, if they are getting so rich so easily, why are they so desperate to get your $100? It just sounds like a big scam to me. It's kind of what's been making me question the viability of being a freight agent myself, but after having had some advice by other freight brokers/agents (you know who you are), it does still seem like a good career... Just not to make vast fortunes like a lot of these joker trainers will promise you you'll make.