You’ve worked for a freight brokerage for too long. You love what you do, you have incredible customers, you know their needs like the back of your hand, and you’re frustrated with the limitations of your current company.
Sounds like it’s time to start your own freight brokerage.
With that in mind, have you considered becoming a freight agency owner?
Running your own business can sound like a daunting task. But with LDI, you can launch a freight agency and start brokering freight for your loyal customers within hours.
LDI Recruiter Chuck Gay has been helping freight brokers go from employee to business owner since 2016. He has several years of tested advice for freight brokers who are ready to make the moveto agency owner, and he was happy to share a few tips with you!
Partner with an Established Brokerage
“Partner with an established brokerage that has the support structure, carrier base and technology you’ll need to be successful.” Chuck said. We’ve brought on several agents who began with a3PL who promised the world and underdelivered, hindering the agent’s success. The carrier network they promised wasn’t available, or hidden fees frustrated the agent, or the corporate office was simply difficult to reach. Sometimes it was a combination of all three.
When you choose an agency partner, make certain the tools and resources they offer will truly make your business launch as successful as it can be. When you’re first starting out, you need to prove to customers that you can provide exactly the customer service you promised.The 3PL you partnered with needs to back you on those promises. “The highest commission split isn’t the only factor you should be considering.”
That being said, LDI does offer an 80% commission split sign on bonus for your first month.
Chuck was immediately ready with his next piece of advice: “Assure that you’ll be able to transition your main customers over with you.” We’ve seen,more than once, W2 brokers become agency owners and then discover their biggest customers won’t move with them.
It’s a shock! Most people do business with people, not a company, so why wouldn’t their customers follow them?There are a few factors to consider so definitely have a conversation that covers all these situations:
Are you working with the decision-maker?
Sometimes a broker thinks they’re working with the person who makes shipping decisions, and too late do they realize they haven’t. In order to avoid this fate, be sure you’re making a transition bargain with the person who can hold to it.
Is that customer bringing on new brokerage companies right now?
This is a surprise: some shippers cap the number of brokerages they’ll work with. When you move to LDI, ask your customer if they are accepting new brokerages to ship with.
If you receive a yes, perfect. You can send them a customer packet to begin their paperwork to get into our system.
If no, ask if one of the brokerages already in their system is Logistic Dynamics. It’s always possible they are working with another LDI agent (perfectly plausible for large shippers) or perhaps a previous LDI agency owner has since retired, but we’re still in their system. If that’s the case, confirm they will continue shipping with you.
What kind of payment terms are your customers working with?
Some customers need to have credit terms in place. The sooner you begin paperwork, the sooner they can receive their lines of credit. We’ve had some interesting finance needs, so the sooner we can have your customer’s payment terms squared away, the sooner you can begin moving their freight.
There are a dozen other things to consider speaking with your customers about prior to going out on your own. Chuck can help walk you through those when you’re about to leave your employee position to officially launch your agency. However, definitely have this conversation with your customers early and receive confirmation they’ll move with you.
A Business Plan
There are plenty of other best practices to keep in mind, so Chuck had to think for a minute about which he would choose for his third piece of advice for soon-to-be agency owners.
“Have a plan in place,” he decided, “Not only to sustain your current customer base but to grow and diversify it.” Plenty of people want to work for themselves, but they don’t have a vision for where they want their freight agency to go. Chuck recommends identifying your current customer niche, your own skill sets, and searching other sectors where your current expertise will transfer.
To sum up, diversifying your book of business protects your agency in the long term. It’s common for any business’s customer base to ebb and flow, so always be prospecting and diversifying your book of business to maintain your own flow. So, early in your entrepreneurial journey, sit down and fill out your business plan. “This will set you up for long term success.”
Want to know what other piece of advice was vying for Chuck’s number 3 spot? Contact him to find out!