Читать книгу Freight Brokerage Business - The Staff of Entrepreneur Media Inc. - Страница 14
ОглавлениеOne of the most appealing aspects of a freight brokerage is that your physical startup requirements are relatively small. Unlike a carrier or freight forwarder, you don’t need a warehouse or loading dock, nor do you need to invest in a fleet of trucks. Your customers aren’t likely to come to your location, so you don’t need to worry about an impressive reception area or elegant offices.
While there are some definite advantages to a commercial location, a freight brokerage is an ideal business to start and run from home.
stat fact
More than 70 percent of all communities in the United States receive all their products and goods by motor carrier.
Cathy Davis started MCD Transportation from home, but the company grew enough to move into commercial space after just eight months. Chuck Andrews works from a commercial location in Indianapolis, but has agents around the country who work out of their homes. Where you operate depends on your resources and goals for your company. Many brokers start from home with the goal of moving into a commercial office space as soon as they are established with a few clients, and this is an excellent strategy.
The major benefit of starting a homebased business is the fact that it significantly reduces the amount of startup and initial operating capital you’ll need. There are also some tax advantages, based on the amount of physical space within your home you dedicate to being your office. Be sure to consult with your accountant about this as you prepare your annual tax returns for yourself and your business.
There’s a lot more to consider than simply the upfront cash requirement. Do you have a separate room within your home for an office, or will you have to work at the dining room table? Can you set up a comfortable workstation with all the tools and equipment you will need? Can you separate your work area from the rest of the house so you can have privacy when you are working—and get away from “the office” when you’re not?
• Working from Home Requires Adjustment
One of the biggest challenges of working from home, especially if you’ve never done this before, is time management. You need to learn how to avoid distractions and focus on work during your work day, as opposed to taking frequent breaks to do things around the house, like watching television, cleaning, gardening, doing laundry, or playing with your dog. This requires discipline.
You’ll also need to adjust to the lack of in-person social interaction with coworkers and clients. Your main communication with other people will be via email and telephone. You can’t simply walk to the next cubicle or office and strike up a conversation with a coworker when working from home. If you’ve worked in a traditional office environment, the lack of in-person social interaction that results in working from home will require some getting used to.
If you’re planning to hire administrative help, your office needs to be large enough to provide them with adequate workspace, and you need available parking. Plus, there are additional insurance requirements associated with having employees work from your home.
tip
To learn more about shared office space options in your community using any internet search engine, enter the search phrase, “shared office space,” followed by a comma, and then add your city and state. For example, type “shared office space, Boston, Massachusetts.”
By contrast, starting in a commercial location requires more initial cash than starting from home. If you decide on this, your range of options is fairly broad, and your choice should be guided largely by the goals you’ve set for your business in terms of market and growth. Consider office buildings, light-industrial parks, and executive suites.
In many cities and communities, there are also fully furnished, shared office suites that can be rented on a month-to-month basis from companies like Regus (www.regus.com) that include a receptionist, shared conference room(s), and private offices. One benefit to this option is that there’s no long-term lease to sign, but the monthly fee will be slightly higher than a traditional commercial office space.
Unless you have an extremely large home, you’ll find that a commercial location allows you to create a setup that is more efficient than what you might be able to do in a spare bedroom or home office. Just be careful when shopping for a space. Rental rates and leasing terms vary, so make sure you comparison shop.
Whether your goal is a solo homebased operation, a small family business, or a transportation empire, you will need to start with a written business plan. This helps you think through what you’re doing, see your strengths and weaknesses, and figure out ways to overcome challenges on paper before you have to face them in real life. Writing a business plan is not just a necessary chore; it creates the foundation and sets the vision for your company.
Your business plan should include worst-case scenarios. You’ll benefit from thinking ahead about what you’ll do if things don’t go as you want them to. Think about things such as equipment breakdowns, employees who don’t show up (even for valid reasons), uncollectible invoices, and other challenges that are part of doing business today.
Some brokers may opt to use agents to develop a wider scope of operations. In this context, agents are independent contractors who represent your company in a given area. This enables you to offer a local presence when you may not have the volume to justify opening your own office.
tip
Anytime you register a company domain name, always choose the dot-com (.com) extension. While hundreds of other domain name extensions are available, and you can register some of those as well, most people are accustomed to typing dot-com after a website address they want to visit and will do this automatically. If your domain name ends with .info, .net, or .co, for example, you could wind up losing business.
Plan on spending less than $25 per year for each domain name you register. You’ll then most likely need to pay to have your company website created and hosted on your behalf. In today’s business world, having a company website, in addition to a presence on social media (particularly Facebook and LinkedIn), is essential.
Along these lines, you may want to consider starting out as an agent rather than a broker. Chuck Andrews’s brokerage company is based in Indianapolis, but he has agents in Texas, Florida, Georgia, West Virginia, and Indiana. Because his agents are not running independent brokerage companies, and because they are homebased, their startup materials are minimal and typically consist of an internet-connected computer, printer, telephone, fax machine, and some file cabinets. The agent’s work is very similar to what a broker does, but the agent functions under auspices of the broker and the broker is responsible for issues, such as paying carriers and maintaining the required surety bonds.
Again, if you opt to start off as an agent working for another company, as opposed to launching your own freight brokerage business, the initial financial responsibilities are much lower, and you can begin gaining real-world experience almost immediately. If you opt to pursue this approach, consider participating in a freight brokerage training program and then applying for an agent job with established brokers.
Your company name is an important marketing tool. A well-chosen name works very hard for you; choosing an ineffective name means you have to work much harder at marketing your company and letting people know what you have to offer.
Your company name should clearly identify what you do in a way that appeals to your target market. It should be short, catchy, and memorable. It should also be easy to pronounce and spell—people who can’t say your company name may use you, but they won’t refer anyone else to you.
When choosing a company name, also make sure the website domain name for it is available. To do this, go to any internet domain name registrar, such as GoDaddy.com (www.godaddy.com), and within the Find Your Perfect Domain Name field that’s displayed on the main page, enter your desired company name. If it’s available, register that domain name.
Cathy Davis gave serious thought to several names before deciding to use her initials. Chuck Andrews chose his company’s name—Midwest Freight Brokers, Inc.—based on its location and the service the company provides. “We’re located in the Midwest, freight is what we do, and brokers are what we are,” he says. Ron Williamson used a combination of his and his wife’s initials to come up with RJW Logistics, Inc., because he wanted a name no one else was using.
Take a systematic approach to naming your company. For descriptive purposes, incorporate the words “Freight Brokers,” “Freight Broker,” or “Logistics” into the name whenever possible. Once you’ve decided on two or three possibilities, take the following steps:
aha!
When naming your company, consider creating a word that doesn’t exist. This is what companies like Exxon, and Kodak did. Just be sure the syllables blend to make an ear-appealing sound, and that the name is simple enough for people to remember. Also, make sure you haven’t inadvertently come up with a name that means something negative in another language, or that infringes on someone else’s copyright or trademark.
• Check the name for effectiveness and functionality. Does it quickly and easily convey what you do? Is it easy to say and spell? Is it memorable in a positive way? Ask several of your friends and associates to serve as a focus group to help you evaluate the company name’s impact.
• Search for potential conflicts in your local market. Find out if any other local or regional business serving your market area has a similar name that might confuse the public.
• Check for legal availability. Exactly how you do this depends on the legal structure you choose. Typically, sole proprietorships and partnerships operating under a name other than that of the owner(s) are required by the county, city, or state to register their fictitious name. Even if it’s not required, it’s a good idea because that means no one else can use that name. Sometimes it’s as simple as filing for a “doing business as” (dba). Corporations usually operate under their corporate names. In either case, you need to check with the appropriate regulatory agency to be sure the name you choose is available.
• Check for use on the internet. If someone else is already using your name as an address on the internet, consider coming up with something else. Even if you come up with a different name for your website or use a different extension (such as .net, .co, or any of the other extensions available), the use of your name by another company could become confusing to your customers or result in lost business.
• Make sure you can establish social media accounts on Facebook, LinkedIn, Twitter, and other popular services, using your chosen company name. When it comes to having an online presence, between your website, company email addresses, and social media presence, continuity is essential.
• Check to see if the name conflicts with any name listed on your state’s trademark register. Your state Department of Commerce can help you or direct you to the correct agency. You should also check with the trademark register maintained by the U.S. Patent and Trademark Office (PTO). Once the name you’ve chosen passes these tests, you need to protect it by registering it with the appropriate state agency; again, your state Department of Commerce can help you. If you expect to be doing business on a national level, you should also register the name with the PTO.
• How to Establish Yourself on Social Media
To create a free Facebook page for your business, start by visiting www.facebook.com/pages/create. To create a Twitter for Business account, visit: https://business.twitter.com, and to establish a presence on LinkedIn, visit www.linkedin.com.
In the process of creating your online presence on each social networking service, be sure to brand it with your logo and related content, and ensure that all of your contact information is prominently displayed. Use your company name as your username or Facebook page name, for example.
Once you have selected a company name, hire a graphic artist to develop a unique and eye-catching logo for your business. This will cost anywhere from $50.00 to several hundred dollars. Showcasing a professional-looking logo on your letterhead, website, business cards, invoices, within your social media presence, and within your emails, for example, will enhance your company’s image and help you build credibility faster.
To have a logo created, seek out a local, freelance graphic artist or use an online service like UpWork (www.upwork.com), Freelancer (www.freelancer.com), or Fiverr (www.fiverr.com) to seek out a graphic artist who specializes in company logo design.
Be sure to describe to the graphic artist what your company does, who your target audience is, and what image you’re trying to convey, in order to provide some initial creative direction. Then, make sure the graphic artist you hire signs a release giving you full legal ownership over the logo design. Follow this up by filing for a copyright and/or trademark of the logo.
To learn more about filing a copyright, visit www.copyright.gov/registration/. Filing a graphic-based trademark is a little more complicated, but it’s a process you can do yourself or by hiring an attorney. To learn more, start by visiting the United States Patent and Trademark Office website (www.uspto.gov). LegalZoom (www.legalzoom.com) offers a fee-based online service to help with the copyright and trademark filing processes.
One of the first decisions you’ll need to make about your freight brokerage is the legal structure of your company. This is an important decision. It affects your financial liability, the amount of taxes you pay, and the degree of ultimate control you have over the company. It also affects your ability to attract investors and ultimately sell the business. However, legal structure shouldn’t be confused with operating structure. Attorney Robert S. Bernstein, managing partner with Pittsburgh-based Bernstein-Burkley PC, explains the difference: “The legal structure is the ownership structure—who actually owns the company. The operating structure defines who makes management decisions and runs the company.”
Consult with both an attorney and accountant to help you choose the most ideal type of legal business structure for your freight brokerage business prior to you formally establishing the business. It’s important that from a legal and tax standpoint, you set up everything correctly right from the start. The decisions you make should be based on a variety of factors, including where you’ll be doing business from.
• Quittin’ Time?
Successful freight brokers recommend that you get practical industry experience by working for another broker, carrier, or shipper before starting your own enterprise. If you follow this advice, when do you tell your boss about your plans?
There’s no one-size-fits-all answer. You need to determine where you stand ethically, legally, and practically. Take any employment-related contracts you have signed—including non-compete and confidentiality agreements—along with your employee handbook—to an attorney. This is especially important if your brokerage will either compete with or use information (such as customer lists) you obtained from your current employer.
A lawyer can review those documents, let you know whether or not you are violating the agreements, and help you understand what potential litigation you may face. Keep in mind that you can be fired for starting your own business. Most states are at-will employment states, which means you can be terminated for any reason or no reason, as long as there is no discrimination involved.
What about trying to start something on the side and building it as long as you can while still working full time? The risk you’re taking there, says Cherry Hill, New Jersey-based freight broker Bill Tucker, is the image you’re projecting to your customers. If you’re sneaking around behind your employer’s back and violating your employment contract, you’re sending a message of questionable judgment and ethics to your customers and associates. This can quickly tarnish your professional reputation moving forward.
Especially if you’re working for another broker as an independent agent, it’s entirely possible that your employer will support your venture. Also, if, for example, you are a sales rep for a carrier, you can present your brokerage business as an opportunity for your employer. You’ll still be out there drumming up business for the carrier, and other carriers as well, but you’ll be doing it on a commission basis, which means the carrier will no longer have to pay the expenses associated with having you as an employee. “You can sell the partnership idea to the owner of a trucking company,” Tucker says. “I know that’s been done a lot of times. More and more, creative relationships are open for consideration.”
A sole proprietorship is owned by the proprietor, a partnership is owned by the partners, and a corporation is owned by the shareholders. Another business structure, the limited liability company (LLC), combines the tax advantages of a sole proprietorship with the liability protection of a corporation. The rules on LLCs vary by state; check with your state’s Department of Corporations for the latest requirements.
Sole proprietorships and partnerships can be operated however the owners choose. In a corporation, the shareholders typically elect directors who, in turn, elect officers who then employ other people to run and work in the company. But it’s entirely possible for a corporation to have only one shareholder and to essentially function as a sole proprietorship. In any case, how you plan to operate the company should not be a major factor in your choice of legal structures.
So what goes into choosing a legal structure? The first point, says Bernstein, is who is actually making the decision on the legal structure. If you’re starting the company by yourself, you don’t need to take anyone else’s preferences into consideration. “But if there are multiple people involved, you need to consider how you’re going to relate to each other in the business,” he says. “You also need to consider the issue of asset protection and limiting your liability in the event things don’t go well.”
Something else to think about is your target customers and what their perception will be of your structure. Bernstein says, “There is a tendency to believe that the legal form of a business has some relationship to the sophistication of the owners, with the sole proprietor as the least and the corporation as the most sophisticated.” Because your target market is going to be other businesses large enough to be shipping substantial amounts of cargo, it will probably enhance your image if you incorporate.
Your image notwithstanding, the biggest advantage of forming a corporation is in the area of asset protection, which, Bernstein says, is the process of making sure that the assets you don’t want to put into the business don’t stand liable for business debt. However, to take advantage of the protection a corporation offers, you must respect the corporation’s identity. That means maintaining the corporation as a separate entity; keeping your corporate and personal funds separate even if you are the sole shareholder; and following your state’s rules regarding holding annual meetings and other record-keeping requirements.
Davis incorporated based on the advice of both her accountant and attorney; the C corporation suited her operation best for both tax and liability purposes. Andrews is incorporated, but he personally owns 100 percent of the stock, so he can essentially function with the autonomy of a sole proprietor.
You don’t need an attorney to set up a corporation, LLC, or partnership, but consulting with an attorney and an accountant prior to setting up your business’ legal entity is a sound business practice. Bernstein says there are plenty of good do-it-yourself books and kits on the market, and most of the state agencies that oversee corporations have guidelines you can use. LegalZoom (www.legalzoom.com) is an example of a fee-based online service that walks you through the process of setting up a corporation without an attorney.
However, it’s always a good idea to have a lawyer at least look over your documents before you file them, just to make sure they are complete and will allow you to truly function as you want.
Finally, remember that your choice of legal structure is not an irrevocable decision, although if you’re going to make a switch, it’s easier to go from the simpler forms to the more sophisticated ones than vice versa. Bernstein says the typical pattern is to start as a sole proprietor and then move up to a corporation as the business grows. But if you need the asset protection of a corporation from the beginning, start out that way. Says Bernstein, “If you’re going to the trouble of starting a business, decide on a structure and put it all together; it’s worth the extra effort to make sure it’s really going to work.”
Because you never actually take possession of your customers’ goods, you don’t need to worry about insuring them. It is carriers’ responsibility to provide coverage for the value of the freight they are hauling. Generally, a certain amount of value (which may vary by carrier) is calculated into the basic freight rate, and if the actual value of the goods exceeds what the basic rate covers, the shipper can purchase additional protection from the trucking company.
aha!
Sit down with your insurance agent every year and review your insurance needs, which are sure to change as your company grows. Also, insurance companies are always developing new products to meet the needs of the growing small-business market, and it’s possible one of these new policies will be more appropriate for you.
Even though you don’t need to worry about insuring freight, your company still has insurance issues to address. If you’re homebased, do not assume your homeowner’s or renter’s policy covers your business equipment; chances are, it doesn’t. If you’re located in a commercial facility, be prepared for your landlord to require proof of certain levels of liability insurance when you sign the lease. In either case, you need coverage for your equipment and supplies, and workers’ compensation if you have employees. You also need additional insurance coverage if you plan to have employees working from your home.
tip
When you purchase insurance on your equipment and fixtures, ask what documentation the insurance company requires before you have to file a claim. That way, you’ll be sure to maintain appropriate records, and the claims process will be easier.
Within your records, keep receipts for all computer equipment and related technology you purchase. Make sure you have, in writing, the computer’s system configuration and serial number, for example. This also applies to other equipment, like printers, fax machines, and office telephone systems.
A smart approach to insurance is to find an agent who works with other freight brokers and transportation companies. The agent should be willing to help you analyze your needs, evaluate what risks you’re willing to accept and what risks you need to insure against, and work with you to keep your insurance costs down.
Typically, homebased freight brokers want to make sure their equipment and supplies are covered against theft and damage by an act of God, such as fire or flood, and that they have some liability protection if someone (a customer, supplier, or employee) is injured on their property. In most cases, one of the insurance products designed for homebased businesses will provide sufficient coverage. Also, you will probably use your vehicle for business purposes, so make sure it is adequately covered.
If you opt for a commercial location, you’ll need to meet the landlord’s requirements for general liability coverage. You’ll also want to cover your supplies, equipment, and fixtures. Once your business is up and running, consider business interruption insurance to replace lost revenue and cover related costs if you are ever unable to operate due to covered circumstances.
You may also want to carry contingency cargo insurance. This is coverage that would take over on cargo if the carrier’s insurance did not fully cover the value of a load that was damaged or destroyed.
As a business owner, you may be the boss, but you can’t be expected to know everything. You will occasionally need to turn to professionals for information and assistance. It’s a good idea to establish a relationship with these professionals before you get into a crisis situation.
tip
In addition to operating his own freight brokerage business and Brooke Transportation Training Solutions (a training program for freight brokers), Jeff Roach, his wife and business partner, and other leaders within his company also do consulting work with other freight brokers. For more information, visit www.brooketraining.com.
To shop for a professional service provider, ask friends and associates for recommendations. You might also check with your local chamber of commerce or trade association for referrals. Find someone who understands transportation in general and the brokerage side of it specifically, and appears eager to work with you. Check them out with the Better Business Bureau and the appropriate state licensing agency before committing yourself.
The professional service providers you are likely to need include:
• Attorney. You need a lawyer who understands and practices in the area of business and transportation law, who is honest, and who appreciates your patronage. In most parts of the United States, there are many lawyers willing to compete fiercely for the privilege of serving you. Interview several, and choose one you feel comfortable with. Be sure to clarify the fee schedule ahead of time and get your agreement in writing. Keep in mind that good commercial lawyers don’t come cheap; if you want good advice, you must be willing to pay for it. Your attorney should review all contracts, leases, letters of intent, and other legal documents before you sign them. They can also help you with collecting bad debts, and establishing personnel policies and procedures. Of course, if you are unsure of the legal ramifications of any situation, call your attorney immediately.
• Accountant. Among your outside advisors, your accountant is likely to have the greatest impact on the success or failure of your business. If you are forming a corporation, your accountant should counsel you on tax issues during startup. On an ongoing basis, your accountant can help you organize the statistical data concerning your business, assist in charting future actions based on past performance, and advise you on your overall financial strategy regarding purchasing, capital investment, and other matters related to your business goals. A good accountant also serves as a tax advisor, not only making sure you are in compliance with all applicable regulations, but also that you don’t overpay any taxes. During the startup phase of your business, an accountant will help you set up your internal bookkeeping operation to ensure everything is set up correctly, whether you’re using general accounting/bookkeeping software, such as Intuit’s QuickBooks, or specialized software for freight brokers from a company like DAT Solutions, LLC.
• Insurance Agent. A good independent insurance agent can assist you with all aspects of your business insurance, from general liability to employee benefits, and probably even handle your personal lines as well. Look for an agent who works with a wide range of insurers and understands your particular business. This agent should be willing to explain the details of various types of coverage, to consult with you to determine the most appropriate coverage, to help you understand the degree of risk you are taking, to work with you to develop risk-reduction programs, and to assist in expediting any claims.
• Banker(s). You need a business bank account and a relationship with at least one banker. Don’t just choose the bank you’ve always done your personal banking with; it may not be the best bank for your business. Interview several bankers before deciding where to place your business. Once your account is open, maintain a relationship with the banker. Periodically sit down and review your accounts and the services you use to make sure you have the most appropriate package for your situation.
• Consultants. The consulting industry is booming—and for good reason. Consultants can provide valuable, objective input on all aspects of your business. (Keep in mind that, as a broker, you will occasionally put on a consultant’s hat as you work with your customers.) Consider hiring a business consultant to evaluate your business plan, or a marketing consultant to assist you in that area. When you’re ready to hire employees, a human resources consultant may help you avoid some costly mistakes. Many freight brokerages are family businesses, so it might help to consult with an expert in the areas of both family dynamics in business and succession planning. For example, after the death of her mother, Cathy Davis, Donna J. Wood took over as president (she had served as vice president), and her sister, Dionne R. Kegley, became vice president of the Smyrna, Tennessee, company. Davis had worked diligently to create a succession plan that provided a smooth transition when it became necessary. Consulting fees vary widely, depending on the individual’s experience, location, and field of expertise. If you can’t afford to hire a consultant, consider contacting the business school at the nearest college or university and hiring an MBA student to help you.
stat fact
Trucks account for less than 7 percent of all vehicle miles on U.S. roads and highways, yet they pay 35 percent of the total federal highway user taxes.
• Computer Expert. Your computer is your most valuable physical asset, so if you don’t know much about computers, find someone to help you select a system and the appropriate software—someone who will be available to help you maintain, troubleshoot, and expand your system as you need it. Keep in mind that many of the specialized computer applications designed for freight brokers, such as those from DAT Solutions, LLC, are based online, and include interactive training and tutorials to help you learn how to use the applications. While little or no software gets installed on your computer(s), continuous and high-speed internet access is required to utilize the applications from your Windows PC or Mac computer(s).
In addition to your “live” professional advisors, you’ll need a collection of resource and reference materials. The freight broker business is full of details so numerous that you can’t possibly expect to remember them all. You will need broker and carrier directories, a mileage guide, and business directories. A listing of publications appears in the Appendix.
Create Your Own Advisory Board
Not even the President of the United States is expected to know everything. That’s why the President surrounds himself with advisors—experts in particular areas who provide knowledge and information to help him make decisions. Savvy small-business owners in all industries use a similar strategy.
You can assemble a team of volunteer advisors to meet with you periodically to offer advice and direction. Because this isn’t an official or legal entity, you have a great deal of latitude in how you set it up. Advisory boards can be structured to help with the direct operation of your company and to keep you informed on various business, legal, and financial trends that may affect you. Use these tips to set up your advisory board:
• Structure a board that meets your needs. Generally, you’ll want a legal advisor, an accountant, a marketing expert, a human resources person, and perhaps a financial advisor. You may also want successful entrepreneurs from other industries who understand the basics of business and will view your operation with a fresh eye.
• Ask the most successful people you can find, even if you don’t know them well. You’ll be surprised at how willing people are to help another business succeed.
• Be clear about what you are trying to do. Let your prospective advisors know what your goals are and that you don’t expect them to take on an active management role or to assume any liability for your company or for the advice they offer.
• Don’t worry about compensation. Advisory board members are rarely compensated with more than lunch or dinner. Of course, if a member of your board provides a direct service—for example, if an attorney reviews a contract or an accountant prepares a financial statement—then they should be paid at their normal rate. But that’s not part of their job as an advisory board member. Keep in mind that even though you don’t write them a check, your advisory board members will likely benefit in a variety of tangible and nontangible ways. Being on your board will expose them to ideas and perspectives they may not otherwise see and will also expand their own network.
• Choose Equipment That’s Reliable
Although multifunction devices—such as a copier/printer/fax machine or a fax/telephone/answering machine—may cost less initially and take up less space in your office than stand-alone items, you’ll lose all of these functions simultaneously if the equipment fails. Also, consider the machine’s efficiency rating and cost to operate; compare that with stand-alone items before buying. However, these machines are more reliable than ever, so one could be right for you.
There are a variety of professional voicemail services you can subscribe to as a small business that offer key features that will enhance the professional image of your company. However, try to avoid using complex voicemail systems that make it difficult for people to ultimately leave a message or reach you, especially when a time-sensitive situation arises.
Many voicemail services will automatically transcribe incoming phone messages into a text and then send you an email or text message with the transcript of each incoming message.
• Consider the group dynamics when holding meetings. You may want to meet with all the members together or in small groups of one or two. It all depends on how they relate to each other and what you need to accomplish.
• Ask for honesty, and don’t be offended when you get it. Your pride might be hurt when someone points out something you’re doing wrong, but the awareness will be beneficial in the long run.
• Learn from failure as well as success. Encourage board members to tell you about their mistakes so you can avoid making them.
• Respect the contribution your board members are making. Let them know you appreciate how busy they are, and don’t abuse or waste their time.
• Make it fun. You are, after all, asking these people to donate their time, so create a pleasant atmosphere.
• Listen to every piece of advice. Stop talking and listen. You don’t have to follow every piece of advice, but you need to hear it.
• Provide feedback to the board. Good or bad, let the board know what you did and what the results were.
tip
Consider managing forms electronically. Many software packages, including PDF Expert (https://pdfexpert.com) and Adobe Acrobat DC (https://acrobat.adobe.com/us/en/acrobat.html), allow you to scan paper-based forms into a computer or tablet once, and then electronically fill out the forms, and then store/share completed forms. This allows you to create a more paper-free work environment, plus gives you quick access to forms from any internet-enabled computer or mobile device, especially when your documents and forms are stored in the cloud (online).
As tempting as it may be to fill up your office with an abundance of clever gadgets designed to make your working life easier and more fun, you’re better off disciplining yourself to buy only what you need. Consider these basic items:
• Typewriter. You may think that most typewriters are in museums these days, but they actually remain quite useful to businesses that deal frequently with pre-printed and multipart forms, such as contracts and shipping documents. A good electric typewriter can be purchased for $100 to $150.
• Computer(s), Software, and Printer(s). You do not necessarily need the “latest and greatest” in computer power, but you need a system that can run the software you need for your business and is expandable to accommodate your growth. For software, you have an abundance of programs to choose from that will support every aspect of your business—and more are being introduced virtually every day. Because software can be a significant investment both in terms of dollars and time in learning, do a careful analysis of your needs and then study the market and examine a variety of products before making a final decision. Keep in mind, many online applications, including Microsoft Office 365 and the specialized applications for freight brokers that are offered by DAT Solutions, LLC., do not require software to be purchased. Instead, you pay a monthly, per-user fee to fully utilize the software application.
• Internet Access. High-speed and reliable internet access is essential for any efficient business operation, especially a freight brokerage. Your choices will typically include a cable service, FiOS (fiber optics), cellular, or satellite, although not all these options will be available in every area. The type of equipment you’ll need depends on how you’ll be accessing the internet, and prices can vary depending on the service you need. Shop around for the best service and price package.
• Something Old, Something New
Should you buy all new equipment or will used equipment suffice? That depends, of course, on which equipment you’re thinking about.
For office furniture (desks, chairs, filing cabinets, bookshelves, etc.), you can get some great deals buying used items. Remember, few people are ever likely to see your office, so make your choices based on functionality rather than appearance. You might also be able to save a significant amount of money buying certain office equipment used, such as your copier, phone system, and/or fax machine. However, for technology-based items, such as your computer, you’ll probably be better off buying new. Don’t try to run your company on outdated technology.
To find good used equipment, you’ll need to shop around. Check out used office furniture and equipment dealers. Also check the classified section of your local paper under “Items for Sale,” as well as notices of bankrupt companies and companies that are going out of business.
• Data and Equipment Protection. You need an uninterruptible power supply to keep your computer from going down in the event of a power failure or brownout, as well as a surge protector to protect your system from power surges. You can buy these items separately or as a combined unit. You’ll also need a data backup system that allows you to copy the information from your computer to another location for safe storage. Consider investing in some type of online backup (cloud-based) option for storing or backing up your data, so it’s always accessible, from anywhere.
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Postage stamps come in a wide array of sizes, designs, and themes and can add elements of color, whimsy, and even thoughtfulness to mail. Stamps look more personal; metered mail looks more “corporate.” Consider using metered mail for invoices, statements, and other “official” business, and stamps for thank-you notes and similar marketing correspondence that could use an extra personal touch.
• Photocopier. The photocopier is a fixture of the modern office and is necessary for even the smallest freight brokerage. You can get a basic, low-end, no-frills personal copier for less than $200 in just about any office supply store. More elaborate models increase proportionately in price. If you anticipate a heavy volume, consider leasing.
• Fax Machine. With the ability to easily scan and email documents, the need to send and receive faxes is declining quickly, but you will still want fax capability in your freight brokerage. Your options include a stand-alone fax machine, a multifunction printer with fax capability, adding fax capability to your computer, or using an online fax service. By installing the appropriate app (such as JotNot Fax, Tiny Fax, eFax, or FaxFile), your tablet or smartphone can also serve as a scanner and fax machine. Make your decision based on your anticipated needs and style of operation.
• Postage Scale. Unless all your mail is identical, a postage scale is a valuable investment. An accurate scale takes the guesswork out of postage and will quickly pay for itself. It’s a good idea to weigh every piece of mail to eliminate the risk of items being returned for insufficient postage or overpaying when you’re unsure of the weight. Light mailers—one to 12 articles per day—will be adequately served by inexpensive mechanical postal scales, which typically range from $10 to $25. If you are averaging 12 to 24 items per day, consider a digital scale, which is somewhat more expensive—generally from $50 to $200—but significantly more accurate than a mechanical unit. If you send more than 24 items per day or use priority or expedited services frequently, invest in an electronic computing scale, which weighs the item and then calculates the rate via the carrier of your choice, making it easy for you to make comparisons. Programmable electronic scales range from $80 to $250.
• Postage Meter. Postage meters allow you to pay for postage in advance and print the exact amount on the mailing piece when it is used. Many postage meters can print in increments of one-tenth of a cent, which can add up to big savings for bulk mail users. Meters also provide a “big company” professional image, are more convenient than stamps, and can save you money in a number of ways. Postage meters are leased, not sold, with rates starting at about $15 per month. They require a license, which is available from your local post office. Only four manufacturers are licensed by the United States Postal Service to manufacture and lease postage meters; your local post office can provide you with contact information. An alternative to a postage meter that will allow you to avoid buying stamps and making regular trips to the post office is to print your postage yourself through an online account.
• Several options are available for generating postage directly from your computer. For example, there’s Pitney Bowes (www.pitneybowes.com), Stamps.com (www.stamps.com), Endicia (www.endicia.com), and ShipStation (www.shipstation.com/features). In addition to paying for the actual postage you need, a low monthly fee applies to use these services, and in most cases, a special printer is needed in order to create the postage from your computer.
• Paper Shredder. A response to both a growing concern for privacy and the need to recycle and conserve space in landfills, shredders are becoming increasingly common in both homes and offices. They allow you to efficiently destroy incoming unsolicited direct mail, as well as sensitive internal documents, before they are discarded. Shredded paper can be compacted much more tightly than paper tossed in a wastebasket, which conserves landfill space. Light-duty shredders start at about $25, and heavier-capacity shredders run $100 to $500.
The ability to communicate quickly with your customers, carriers, and suppliers is essential. Also, being able to reach your employees when they are out of the office is important. Advancing technology gives you a wide range of telecommunications options. Most telephone companies have created departments dedicated to small and home-based businesses. Contact your local service provider and ask to speak with someone who can review your needs and help you put together a service and equipment package that will work for you.
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Listen to your customers and carriers. If they complain that you’re hard to reach or aren’t returning calls promptly, it’s time to reevaluate your communications system. Lost calls mean lost revenue.
You’ll need reliable voice communication that is answered 24/7 by a human or an electronic system. Even if most of your shippers are local, it’s highly unlikely that all of their customers will be, too. You’ll want to provide a toll-free number so nonlocal shippers, consignees, and trucking companies and their drivers, who don’t have free or flat-rate long distance, can reach you without having to make a toll call. Most long-distance service providers offer toll-free numbers, and they have a wide range of service and price packages. Shop around to find the best deal for you.
Many small business office phone systems can forward calls to a smartphone, making it easier for someone to reach you during or after business hours, when you’re not sitting at your desk. In fact, if you’re the only employee at your freight brokerage business, there are mobile apps available for the iPhone and Android smartphones that provide the advanced features of a business phone system. For example, there’s Sideline, iPlum, eVoice, WiCall Business, and Business Line, which are available from the App Store (iOS) or Google Play App Store (Android).
Keep Your Customers Out of Voice Mail Jail
Voice mail is one of the most popular modern business conveniences and can be an efficient communication tool. But keep in mind that the pace of the freight industry is so rapid that there isn’t always time to return calls, so whenever possible, answer your phone yourself—and insist that your employees do likewise—and handle calls as quickly and smoothly as possible.
If you use an automated answering system, be sure to tell callers how to reach a live person. Ideally, that information should come very early in your announcement. For example, your greeting might sound something like this:
Thank you for calling ABC Freight Brokers. If you know the extension of the person you are calling, you may enter it now. To reach an operator, dial zero at any time during this message. For dispatch, press one. For tracing, press two. For billing, press three. For a company directory, press four.
Transportation Brokerage Software
Technology has made starting a freight brokerage easier than ever, and there are several software packages on the market designed specifically for brokers. See the Appendix for a partial list of resources. In addition, you can get off-the-shelf word processors, spreadsheets, accounting programs, and other software functions to help you run your business. Instead of purchasing the Microsoft Office suite of applications outright and then needing to upgrade the software each time a new version is released, Microsoft offers the Office 365 option. For a monthly fee (around $10.00 per user), you have full access to all Office applications (Word, Excel, PowerPoint, Outlook, OneNote, etc.), and all software updates are included.
“By spending money upfront on computer and communication technology, you are saving money in the long run,” says Cherry Hill, New Jersey-based freight broker Bill Tucker. “You’ll also have a lot more sales appeal with the ability to provide information to customers.”
Websites are no longer optional for businesses, and your email address should include your company domain name, which should lead to your company’s website. It’s fine to use an email service such as AOL, Gmail, Hotmail, or Yahoo! for your personal email, but it detracts from your professional image when you use it for business.
Your website is one of the primary ways prospective customers will find you, and it’s a key way for you to communicate with your existing customers. A well-designed, easy-to-navigate, optimized website is essential.
Study the websites of successful freight brokers, and make notes of the elements that appeal to you as well as the ones that don’t. Then when you have a clear vision of what you want your website to look like and what you need it to accomplish take the project to a website designer.
Use Online Content to Educate Your Customers
One of the most efficient and effective ways to promote any business is through content marketing, defined by the Content Marketing Institute as “a marketing technique of creating and distributing relevant and valuable content to attract, acquire, and engage a clearly defined and understood target audience—with the objective of driving profitable customer action.”
Some people refer to content marketing as education marketing. The idea is to provide information that has value to your audience through your online content. You can share and promote that content through a variety of ways, and one of the most popular is social marketing. But if you’re going to do it, you need to do it right.
The two primary components of social marketing are media and networking. Social media are websites and applications used for social networking. Social networking is the use of dedicated websites and applications to communicate informally with other users or to find people with similar interests to oneself.
Perhaps the biggest challenge of social marketing is the number of platforms available and the rapidly changing popularity of those platforms, which is why we’re not going to give you how-to lessons on specific social media sites. It’s not necessary for you and your freight brokerage to be active on every social network. A smarter strategy is to pick the two or three networks that are most popular with your market and establish your presence on them and not worry about the others. Having a company Facebook page (separate from your personal Facebook page) and a presence on LinkedIn is advisable. And you don’t need thousands of fans and followers; you need customers and prospects who are engaged with you online.
These steps will help you get started:
1. Set clear goals for your social marketing efforts. Be specific and keep those goals in mind with everything you do. If a particular initiative isn’t likely to help you meet an objective, don’t waste time doing it. Along with setting goals, determine how you’re going to measure results.
2. Dedicate the human resources to social marketing. You need someone on your team (and it could be you) who understands social marketing, is comfortable with the platforms you’ll be using, and has the time to manage your social marketing program. It’s better to not do social marketing at all than it is to start it and let it fall by the wayside.
3. Be prepared to produce sufficient content. Content is the fuel for your social marketing vehicle, and without it, your efforts will stall. Content includes blogs, special reports on critical transportation issues, images, videos, infographics, comments, and so on. It’s okay to share content from other sites (with appropriate permission and attribution, of course), but you should also be creating your own original content.
4. Prepare your website for social media attention. One of the desired results of your social media efforts is to increase traffic to your website. Make sure your marketing message across all of your online activities is cohesive and synergistic.
5. Remember that it’s a conversation. Don’t simply talk at your audience; engage with them. Ask for input. Create content that’s so great they’ll want to share. And don’t let their questions or comments go unanswered.
6. Be realistic in your expectations. Don’t anticipate monumental results for a minimal investment. Also, remember that not everyone on social media is your “friend”—these are customers (or prospects), and they may use your social platforms to complain. If they do, handle the issue as quickly and efficiently as possible, using the situation as an opportunity to demonstrate your superior customer service.
An important part of your overall management and marketing strategy is your social media policy. This is different from your on-the-job internet policy. You need guidelines for what employees can—and can’t—say about the company whenever and wherever they are online. In the past, workers who had a bad day would go home and grumble about it to their families or to their buddies over drinks after work; today, they’re far more likely to vent on the internet, and what they say could damage your company.
Points your social media policy should address include:
• On which sites and under what circumstances employees can identify themselves as employees of your company. Online business networking has value and should be encouraged, but if employees are involved in activities outside the workplace that may be considered divisive (such as hot political and social topics), you may not want to risk alienating customers by being publicly identified with those issues. Don’t try to keep employees from expressing their opinions; just make it clear that they are not to connect the company to those opinions or actions.
• Protecting confidential and proprietary information. It may sound like a no-brainer, but your policy should specifically include a prohibition against revealing confidential information on social media sites.
• Prohibit disparaging the company, its employees and suppliers, and its current, previous, or prospective customers. Social media sites are a popular place for people to vent, but your employees need to know that if they’ve had a bad day and they’re ticked off at the company, their boss, or a customer, they can’t put it up on a social network in any way that would identify the company, the customer, or the individuals involved.
Have your policy reviewed by an attorney to make sure it doesn’t violate employees’ free speech rights or other applicable laws or regulations. Provide employees with a copy of your policy and have them acknowledge in writing that they have received and understand it. Finally, enforce the policy consistently without exception.
Because the only thing you sell is service, you’ll require very little in the way of inventory—but what you do need to keep on hand is important.
You’ll need to be sure to maintain an adequate stock of marketing materials, including brochures, business cards, promotional/marketing items, etc. You’ll also need to maintain an ample supply of administrative items, including checks, invoices, letterhead, paper, and miscellaneous office supplies (including printer ink or toner).
Though you won’t be hauling freight yourself, you will do a substantial amount of interacting with your customers at their places of business, and you’ll meet with truckers at their terminals and offices. You will also need to attend various professional and networking functions. You can either use your own vehicle or have your company purchase or lease a vehicle that you use for business.
Because you may have customers and/or colleagues riding with you, choose a four-door sedan that is roomy and comfortable. It should also have a sizable trunk so you have plenty of space to carry files and supplies (and a set of golf clubs, if you play).
Remember that your automobile is essentially your mobile office, and you will be judged by its appearance. Keep it clean, both inside and out. Wash it regularly to avoid a buildup of road grime, and do not allow trash and papers to accumulate inside. If you smoke, empty the ashtray daily and use a deodorizer for the comfort of your nonsmoking passengers. (Sure, it’s your car, and if you want to smoke, that’s your business, but remember that buying decisions are often based on emotional factors, then later justified with logic and reason. A nonsmoker who is offended by a smoker will find a way to avoid doing business with that person.)
