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Best way to get started as a broker.

Discussion in 'Freight Broker Forum' started by dlstruck, Jul 18, 2017.

  1. Jul 18, 2017 #1
    dlstruck

    dlstruck Medium Load Member

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    This isn't really for me, my cousin was asking. I have my own carrier authority and he wanted me to get my broker authority so he can work as a broker for me. I would like to get it in the future but I'm not going to get it without him or me knowing anything about the broker business. I suggested he go work for a brokerage for a year or two and then we can try and start something.

    What would be the best way to do this? I know some brokerages have physical offices that you come to daily, while others have agents that seem to work from home. I'm guessing the office option would be better for him? Are there any good companies to learn with for someone who's completely new to this?
     
    dlstruck, Jul 18, 2017
    dlstruck, Jul 18, 2017
    #1
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  3. Jul 18, 2017 #2
    boredsocial

    boredsocial Road Train Member

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    Office is the way to go for him. He should be looking for a TQL style brokerage where he'll be doing sales AND covering loads. I wouldn't go with Coyote or CH Robinson for that reason if nothing else.

    Honestly there's not much reason to start a freight brokerage if you have less than 10-20M a year in sales. It's nearly always not worth the effort of running a back office without that much revenue to make that activity independently profitable. If your trucking company already has accounting people who have extra time on their hands it can be worth doing well before that point, but that's how you earn the brokerages 40% of the gross profit.

    EDIT: You also need to have the working capital to finance everything yourself. If you can't that's at least 15% of the gross profit out the window. Generally speaking it's a bad idea to try to run a brokerage factored. There's just not enough left over to deal with claims and accounting after you pay the factoring company.
     
    boredsocial, Jul 18, 2017
    boredsocial, Jul 18, 2017
    #2
  4. Jul 18, 2017 #3
    dlstruck

    dlstruck Medium Load Member

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    Sep 8, 2016
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    Good info, thanks. I'm only at 3 trucks right now but I'll be getting more this year and probably hire some help. I agree with the capital, I run my company without factoring now and definitely wouldn't want to factor a brokerage. I'd be open to doing it in a few years since like you said, I can have him work on the brokerage and trucking dispatch in the beginning if there wasn't always much work. I don't have a full time accountant yet but I do pay someone to keep track of the finances and submit invoices/paperwork part time right now.
     
    dlstruck, Jul 18, 2017
    dlstruck, Jul 18, 2017
    #3
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