How to Become a Great Freight Broker: Start with Your Business Plan

Make Sure You Succeed With a Great Freight Broker Business Plan Making a great business plan is an essential step of any business, especially if you’re starting your own freight brokerage. There are many ways to get started. For example, the Small Business Administration (SBA) has a useful online business plan tool, which you can use. But, there are some specifics relating to how to become a freight broker which you should definitely keep in mind. Here’s our step-by-step guide to help you along:

Step #1: Choose the Right Legal Framework

Deciding which legal structure will work best for you is an absolute must. Only once you’ve made this choice can you begin the legal process of founding your company.Legalzoom offers some excellent and inexpensive assistance in this process. As for the type of company, your main options are:

Limited Liability Corporation

Limited liability is exactly what it sounds like – it has the advantage of avoiding personal liability on the part of the owners for any debts incurred by the company. It’s also easy to raise funds by selling new membership interests with this type of structure. For the other advantages of an LLC, check out Legalzoom’s excellent summary.


When two people decide to form a company together, this is the simplest way to do it. A partnership can take many forms, but it always has certain advantages and disadvantages you should consider in terms of liability, flexibility, and longevity.

Sole Proprietorship

This is essentially a company which consists of a single individual and would be a great option for someone looking to start a smaller freight brokerage on their own. However, a sole proprietorship does involve putting all of your eggs into one basket, so to speak. Thus, be sure to consider liability issues involved with this business structure.

Corporation (S or C)

Corporations are more complex and difficult to set up, but they offer serious tax and legal advantages if you’re looking to build a larger freight brokerage business. The biggest difference between S and C corporations is that C corporations pay taxes as a corporation and as an individual shareholders while with the S type taxes are only paid by the shareholders. But unless you’re looking to sell shares and employ more than around 20 people, you can probably stick with a simpler business type.

Step #2: Incorporating Technology

freight brokers need technology and mobility

Freight brokers need the right technology, in the right location.
Aurimas Adomavicius / Foter / CC BY-ND

Technology is a critical part of any modern freight brokerage business. It’s not only crucial to choose the best brokering software for your needs, but it’s also important to take advantage of standard business tech to streamline your work. That includes having a smartphone, so you can keep up with developments on-the-go, and using accounts and billing software to simplify your life at tax time. Plus, by using the latest applications to more efficiently match freight with carriers, you’ll be a step ahead from the start.

Step #3: Choosing a Location

While transportation brokerage can be done remotely, face-to-face meetings and personal contacts can really make a big difference. It’s important to think strategically about where economic growth is highest so you can position your business to benefit from the increased freight shipments which accompany your main location.

Step #4: Finding a Niche

Beyond positioning yourself in a great location, finding a market niche can help boost your business’s natural potential for growth and success. For example, by finding an area where a lot of commercial retail development is about to begin you can build contacts early and become the go-to freight broker for all new businesses as they open their doors and require regular product shipments.

Step #5: Funding Your Business

While starting a freight broker business is quite affordable, compared to many other types of companies, it’s still important to understand the licensing fees, application fees, etc. Therefore, the question of funding needs to be incorporated into your business plan from the start. Fortunately, there are many new companies like Lendio dedicated solely to finding peer-to-peer lending options, so keep in mind you have options beyond a traditional bank loan.

Don’t Fall Into the No-Business-Plan Trap!

Don’t allow your business to become just another statistic by letting it fail simply because you never put together an adequate business plan. If you’re wondering how to become a great freight broker, this is an unmissable step. Things may seem obvious but the foresight and perspective a good business plan gives you are invaluable. Once you’ve got that, you can jump into new opportunities with confidence! For a complete guide to every aspect of becoming a freight broker, download our free e-book, The Freight Broker Starter Kit: Get the free Freight Broker Starter Kit by JW Surety Bonds!