How Do You Grow from a Small Freight Broker into a Medium-Sized Brokerage?
The freight brokerage business is incredibly competitive, as anyone in the industry can tell you. Not only are there more than 17,000 licensed freight brokers in the United States, but brokerages today also have to find a way to compete with mega-sized digital freight brokers.
So, how do you grow your small brokerage into a medium-sized brokerage so you can start bringing in more clients and more revenue? How do you step up your game to get to the next level? The following steps are a good place to start.
Take a Look at Organizational Structure
Start by evaluating where you’re at, where you want to be, and how you’ll need to change your organizational structure to get there. If you’re currently an army of one (or maybe a few), you may find that by increasing your workload, you’ll need to create additional positions. For instance, if you currently keep track of all the accounting, consider whether you’ll have time for that if you double your workload.
You might also look at how work is distributed. Should you switch from a cradle-to-grave model to a split model as you grow to improve efficiency and bandwidth? Should you, as an owner or manager, still be covering loads or would your time be better spent leading and networking?
Along with organizational structure, you can look at avenues for new business that correlate with your current strategy. For example, you could expand your freight type offerings, take on larger shippers in your niche, take on new types of shippers, or add LTL options if you’re exclusively an FTL broker.
Get Your Team Together
Should you try to get new clients so you can pay to expand your team or should you hire a new team so you can get new clients? It’s a difficult question for a lot of brokers, kind of a chicken and the egg thing. If you hire first, you have to pay people before your revenue increases, but if you hire after you’ve won new business, you might not be able to maintain customer satisfaction or say yes to every great opportunity without the staff to back you up.
Our suggestion: Hire the right talent and they’ll go after leads and bring in enough new business that you don’t have to worry that you laid out hiring expenses and salary before the new money started rolling in.
Expand Your Tech Capabilities
Simply put, it’s difficult to get and keep clients if you don’t have the tech solutions that make you competitive with other top brokers. A lot of small carriers are lacking in this arena, and growing without stepping up your game in the tech department is difficult.
Look into a great TMS, tracking system, and an efficient freight payment system so that you can give your shippers and carriers the experience they expect. As you continue to grow, truckload procurement tools like FreightFriend can help you match your freight to the right capacity and get your loads covered.
Freight brokers often overlook the importance of networking, but it’s a great way to help you bring in new clients and get referrals from the right people in your niche. Building relationships with shippers, carriers, and others in your industry may prove invaluable on your path to growth.
As is the case in nearly any venture, you’ll need to be prepared to lay out at least a little capital to get where you’re going. If you invest it soundly and serve your clients and carriers well, you can bank on good returns.
Ready to see how procurement can be your competitive advantage? FreightFriend can help you realize your potential. See how quickly you can realize your ROI or learn more about our digital freight matching and dynamic routing guide.