You’ve done your due diligence. You’ve managed to build a solid freight broker business with happy, long-term customers and mastered the technique of bringing on new customers regularly. In fact, business is booming! Sounds great, right? The problem is…your business is busting at the seams and there’s just you and maybe a partner that’s running the whole thing. If your business grows any more, your attention to the details and stellar customer service level that your clients are accustomed to will drop, you’ll have to refuse loads (wait, what???) and tarnish the top-notch reputation you’ve worked so hard to build or worse…potentially lose a customer!
You know the solution. You’ve toyed with it in your head for a while now – You have to hire more staff, but you just don’t think you can swing it – for a variety of reasons (or perhaps, excuses?). Starting a freight broker business was difficult enough but hiring more staff can be downright terrifying! Ask any start-up business owner and they’ll tell you how scary it was for them to hire their first person. So, here are some things you should consider that might help you overcome your fear of expanding your freight broker business and help you better navigate the process:
- Why Hire – Make sure you accurately identify WHY you want to bring on more staff. This could mean hiring someone for just dispatching, finding new customers or exploring a new niche in your office such as LTL or oversize, etc. Once you bring that individual on for a specific need, make sure you don’t divert their focus or muddle their main task(s) by adding on other tasks or making that person be the catch-all of other responsibilities. If you do, make sure it’s always in the best interest of the business and ok with your new hire, otherwise you run the risk of losing them and taking your business off track thereby hindering your success or growth. NOTE: It might seem logical to hire based on expertise. Keep in mind that you can always provide additional training to get your new talent up to speed or knowledgeable in certain areas of the business but you can’t train someone on attitude. When bringing on someone new, always hire for character FIRST, then experience.
- Hire Smart – Freight brokers need to realize that just adding extra heads to your office won’t necessarily help or increase your business. If you’re absolutely certain that you’re ready to bring on more staff, consider these key factors.
- Who to Choose – Do you want to hire a seasoned transportation professional or someone new to the industry? Hiring someone experienced will cost you more but you’ll benefit from having to spend little time to train them and they will be able to hit the ground running fast. Also, hiring one experienced employee could replace the need to hire 3 inexperienced employees. However, if you choose to hire an eager newbie, the training time will be longer but you can customize their training to tailor-fit your business. Either way, once you’ve found your great new hire, make sure you do your best to hold on to them by making them a respected and valued team member, paying them accordingly and empowering them to do the job they were hired and trained to do. And before you make your final decision to bring someone onboard, consider one last thing – perhaps THE most important factor…fit. They may be an outstanding, intelligent, hardworking individual, but they also need to fit in with your office and you. NOTE: It’s not only important but veryrealistic to understand that with whomever you bring on board, provide in-depth training to or give access to your extensive book of business, you always run the risk of them jumping to a competitor or taking your customers with them.
- What Tasks – Only YOU know who you need to bring on to help your freight broker business grow. If you know your office needs more help NOW, one of the safest bets and best bang-for-your-buck might be to hire a dispatcher. Hiring a dispatcher will help you cover loads, dispatch drivers, perform check calls, schedule pickup/deliver appointments, send rate confirmations and do carrier due diligence. This will buy you time to invest in customer interaction and relationships which drive all business!
- Business Flexibility – Don’t just decide to bring on another person because you’ve had a crazy week or hectic month. You need to ask yourself if your freight broker business has enough work to keep a new hire busy during slow times or seasonal slumps. Still not sure? The best rule of thumb is not to “think” you might need more staff. If you need to add more staff, believe me, you’ll know without a doubt when it’s time.
- Can You Afford It – Bringing on staff is another out-of-pocket expense for your freight broker business. You definitely don’t want to hire someone only to find out that you can’t afford to keep them! Below, I’ve kept with our hiring a dispatcher scenario to give you an idea of how to go about figuring new employee cost.
- Dispatcher Break-Even Analysis**:
Hourly cost range of $8-$15per hour with an $11.00 average.
$8 per hour = $1,492 Employee Monthly Cost / $166 per load = 8.98 loads per month
$9 per hour = $1,680 Employee Monthly Cost/ $166 per load = 10.12 loads per month
$10 per hour = $1,866 Employee Monthly Cost / $166 per load = 11.24 loads per month
$11 per hour = $2,052 Employee Monthly Cost / $166 per load = 12.36 loads per month
$12 per hour = $2,080 Employee Monthly Cost / $166 per load = 12.53 loads per month
$13 per hour = $2,424 Employee Monthly Cost / $166 per load = 14.60 loads per month
$14 per hour = $2,612 Employee Monthly Cost / $166 per load = 15.73 loads per month
$15 per hour = $2,799 Employee Monthly Cost / $166 per load = 16.86 loads per month
NOTE: The amount of $166 was used because that is the average agent commission per load at LDi over the past 12 months. **Employee costs are an estimate that includes related costs such as payroll taxes, benefits, tools, equipment and small supplies needed to perform their job.
- Ask yourself how long would it take to increase your load count by 8.98 to 16.86 loads per month if you could spend 3-5 more hours per day selling to your existing customers and calling on new customers.
- Would it take 1, 2, maybe even 3 months? Now ask yourself if the investment is worth it? The decision or indecision to grow is yours but always remember, “If you’re not growing you’re shrinking…you just don’t know it yet”!
- Growing Pains – You can’t bring on more people to your freight broker business without incurring additional overhead costs, not to mention compensation. More people in your office mean the need for additional equipment (phones, computers, printers, desks, chairs, headsets, etc.) and potentially more space, depending on if your current office space allows for additional bodies and equipment. You might need to move your business to a new and bigger space or location, which could mean additional (and costlier) expenses, such as utilities, rent/lease, parking, etc. Also, whether you bring on someone seasoned or not, you will still need to train them for their position as well as acclimate them to your business model and office procedures. This is another often overlooked expense when bringing on a new hire and, although the figure varies with each individual, your time is valuable and has a price. In addition, once they are fully functioning, you will still need to take additional time out of your daily schedule to monitor their activities and make yourself available to them for questions and guidance as needed.
One final note, it’s good to remember the old adage, “With great power, comes great responsibility” or the sage advice that “Rome wasn’t built in a day”. Now that you’ve decided to bring on one or more individuals into your freight broker business, you need to recognize your own new role within your company. You will need to adjust your mentality from being a one-man-band to being a leader as well as a team player. You will need to be the epitome of patience as you and your new hire(s) become acquainted to you, your business, your office space and additional staff, if applicable. You will need to trust them and turn over certain tasks…something you may not be comfortable with or used to doing. But, it’s up to you to invest in them and develop a strong team atmosphere. It will take time, but it can be done through honesty, transparency, trust, communication and by recognizing individual accomplishments and identifying and rewarding specific milestones or achievements. Once implemented, these actions will create happy workers by instilling loyalty, inspiring work satisfaction and helping to cement a long and happy professional relationship between you and your staff. And as we all know…happy workers are productive workers! In fact, new research suggests we are more productive and work more effectively, creatively, and collaboratively when we’re happy at work…TWELVE PERCENT more productive, to be exact!
Still unsure if you should expand your freight broker business and take on a new hire? Then, chances are, you’re probably not ready. But, if you firmly believe you are, hopefully this post provided some good insight to help you start the process. To learn more on the challenges and solutions for growing a successful freight broker business, watch our insightful workshop video, “Successful Freight Broker Agent Strategies and Techniques for Growing Your Business”, presented by a top LDi Agent http://bit.ly/1L2SwGK, where he goes into detail about his own brokerage’s growing pains and how he not only overcame them but grew to be a multi-million-dollar freight broker business.
If you have any additional suggestions on how to overcome the fear of expanding a freight broker business, I’d love to hear them! So, please feel free to comment on this or any of LDi’s blog posts or suggest future article topics and thanks for reading!