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1.0 Executive Summary
The purpose of this business plan is to showcase the continued development and expansion of a freight brokerage based in Charlotte, North Carolina. Freight Brokerage, LLC (“the Company”) was founded by Peter Davis. The business will arrange for all facets of freight transportation on behalf of its client base. At this time, the Company is seeking $150,000, via an SBA loan, to commence operations.
1.1 The Services
The primary revenue center for the business will come from the ongoing arrangement of freight transportation on behalf of clients throughout the United States. The business will maintain a number of staff brokers that will arrange dry loan, refrigerated, and hazardous material hauling from the Company’s Charlotte based location. The business will receive equal to 15% of the transaction.
In order to provide a comprehensive level of services to clients, the Company will work with carriers throughout the United States. The business will also work with owner-operators. The business will frequently place orders for transportation on major load boards.
Chapter three of this document will further discuss the operations of the Freight Brokerage.
1.2 Financing
Freight Brokerage, LLC will require $150,000 in order to launch operations. It is assumed that the business will receive a 7-year loan that carries a 8% interest rate. The funds will be primarily used for the following:
• Brokerage office development in Charlotte
• Website development
• Six months of working capital
Given the highly predictable nature of the Freight Brokerage’s revenues, the Company could easily acquire additional capital as needed in order to expand operations. It is possible that Management may seek to acquire existing Freight Brokerages that could be integrated into the business’ operational infrastructure. In this case, the business would be a strong candidate for an additional business loan.
1.3 Mission Statement
Freight Brokerage’ mission is to provide cost-effective logistics solutions for clients that need merchandise transported throughout the United States.
1.4 Management Team
Peter Davis has been active in the field of freight brokering over the past five years. Given his experience and expertise in freight transportation and logistics, he will be able to quickly bring the operations of the Company to profitability.
1.5 Sales Forecasts
1.6 Expansion Plan
Management may develop additional offices within North Carolina or the Mid-Atlantic United States over the next three years in order to support additional brokerage staff. As stated above, the Company may also acquire existing Freight Brokerages as a means of non-organic growth.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Freight Brokerage, LLC.
2.2 Required Funds
An SBA loan of $150,000 is sought. Mr. Davis will contribute $25,000 towards the development of the Freight Brokerage.
2.3 Management Equity
Peter Davis is the sole member and 100% owner of the business.
2.4 Exit Strategy
Given the highly predictable income generated from freight brokering services, there is an immense demand to acquire these entities among third-party logistics firms. In the event of a business sale, Mr. Davis will coordinate these efforts with the Company’s attorney, CPA, business valuation firm, and business brokerage. Based on the anticipated profitability of the business, the Company could have a valuation in excess of $600,000.
3.0 Operations
As stated in the executive summary, the Company will offer its clients broad access to a wide range of freight transportation services that are provided by third-party carriers and owner-operators. Management is currently in the process of fostering ongoing relationships with fleet operators so that the Company can offer all types of trucking including refrigerated and hazardous materials. The Company will typically charge fees equal to 13% to 15% of the face value of the transportation.
In order to quickly grow the business, the Freight Brokerage will provide competitive commissions for its staff brokers. Each broker will be given a 30% commission for each load that they arrange on behalf of the business. This will provide the proper incentives for staff to grow the business alongside Management.
Moving forward, the Company will integrate specialized logistics and supply chain management services. These services will provide high margin incomes for the business. Given the continually evolving nature of ecommerce and logistics, Management sees a significant opportunity to expand into this facet of operation once the Company establishes its brokerage.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This part of the business plan will document the freight brokerage industry, the current economic climate, and other issues that the Company will face as it develops its operations.
The economic climate is currently moderate. The period of high inflation is starting to abate due to effective monetary policy. It is fully expected that interest rates will start to decline as the rate of inflation is concurrently lowered.
Any further issues should not impact Freight Brokerage’s ability to continue to generate revenue due to the fact that the demand for comprehensive logistics/transportation management remains strong at all times. The Company intends to provide its services among a wide range of industries, including the healthcare sector (for distribution of medical supplies and equipment). This diverse portfolio of clients will contribute to the ongoing economic viability of the business.
4.2 Industry Analysis
Nationally, there are 90,000 companies that actively provide for the management of freight. The industry has experienced substantial growth given global supply chain issues. Each year, these businesses generate in excess of $100 billion.
This industry has undergone numerous changes over the past fifteen years given the ubiquitous nature of tracking technology. Freight brokerages are now able to track merchandise in real time. This has allowed for fewer errors and issues with the transportation process. The Company will continue to integrate the latest in logistics technology in order to achieve higher capital efficiency.
4.3 Customer Profile
Among clients that the Freight Brokerage will target with its marketing campaigns, the following profile will be used:
• Operates as a retailer, product distributor, or wholesaler
• Will spend $4,000 to $8,000 per transportation order with the business
• Will require two to four shipments per month to be managed by Freight Brokerage, LLC.
Given that all product focused businesses require ongoing management of freight transportation, the Company will be able to target a diverse range of clients throughout the country. As discussed earlier, the Company intends to partner with companies among numerous industries.
4.4 Competition
As there are 90,000 businesses in this industry – it is difficult to properly ascertain the ongoing competition that the Company will face moving forward. These entities will range from small scale brokerages to major national level corporations. In this section, you should discuss the ways that you will differentiate your firm from major competitors. Most importantly, you can discuss that your low cost operating infrastructure will allow your freight brokerage to remain pricing competitive by offering services at a lower percentage rate. Additional discussions can include the integration of supply chain management and logistics services into operations.
5.0 Marketing Plan
Freight Brokerage, LLC will implement a broad ranging marketing plan that will not only target companies that have ongoing freight transportation needs but also among carriers that will partner with the business to deliver loads.
5.1 Marketing Objectives
• Use load boards in order to source fleet operators and owner-operators for carrier services.
• Use online marketing strategies including search engine optimization for the Company’s website as well as highly focused social media ads.
• Develop ongoing relationships retailers and product distributors that have ongoing transportation needs.
5.2 Marketing Strategies
Freight Brokerage, LLC will use a number of direct outreach programs among product distributors/wholesalers as well as retailers that operate numerous locations. Once these relationships are solidified, the business will provide outstanding and comprehensive freight transportation arrangements on their behalf.
To that end, the Company’s brokers will be properly trained in order to sell the business’ services to clients. This will include in-depth sales training regarding all facets of the business’ operations and how it can provide cost effective freight transportation services. As discussed earlier, one of the major components for the Company’s growth will be facilitated by providing substantial commission for the brokerage staff.
The Freight Brokerage’s website will feature in-depth information regarding the types of merchandise/freight that can be transported through the business. The website will feature numerous articles about how the process works, which will contribute to the Company’s search engine optimization campaigns. The website will also link to all social media accounts maintained by the business.
In regards to social media, a major focus of these operations will center on LinkedIn. The business will search profiles among individuals that list their profession as a logistics manager for a product distributor/wholesaler, retailer, or healthcare supplies distributor. The Company will aggressively seek to partner with healthcare supplies/equipment distributors as these entities are immune from negative changes in the economy.
5.3 Pricing
The Company, on each freight transportation order, will generate 13% to 15%. The business may generate additional revenue from managing supply chain matters on behalf of clients.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
7.0 Financial Plan
7.1 Underlying Assumptions
• Freight Brokerage, LLC will acquire a $150,000 SBA loan.
• The business will require upfront payment for its freight transportation services.
7.2 Sensitivity Analysis
The demand for comprehensive freight transportation remains strong in any economic climate, especially among goods that are absolute necessities. Freight Brokerage, LLC will maintain fiscally sound operating protocols while maintaining a low-cost operating infrastructure. This will ensure that the business can satisfy its SBA loan obligations on a monthly basis.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
