Starting a Brokerage

[Kehinde]

Good day gentlemen,

I am new to this forum and I must commend that the write ups here are very educative thus, I feel I should introduce myself to everyone.

I really would like to become part and parcel of the brokerage industry,not for any reason,but because I have a flair for Supply chain,basically Transportation.

Previousl I worked for a manufacturing company for a year as a logistics Manager in Toronto Canada,prior to this I backed up an educational training in Logistics and Supply Chain, and am presently writing my certification in Plog(professional Logistician).

The reason for signing up here,is to get information on how I can get started in establishing my own freight Brokerage company here in Toronto Ontario.

Please can anyone here be so magnanimous to guide me on how I can start up here in Toronto?


Thanks.

 

[whatiship]

Aside from the basic regulatory requirements of getting your "trust fund" set up and your business and funding set up, the first thing you should ask yourself is "Where and how am I going to get my customers from? Without some background in sales or the ability to hire successful sales people on your behalf it will not be easy. Having said that, good luck to you. Should you have specific questions, this forum can be useful.

 

[chica123]

I vote to move these last couple of comments to a different thread.

 

[MikeJr]

Took a few clicks, but figured it out!

Keep well,
Mike

 

[loaders]

As whatIship said, getting your funding set up before you start operating is critical. Yes, you will need customers, but in my opinion more important is the ability to pay your suppliers (the carriers) as promptly as possible. After 27+ years in this business I have seen customers come and go, but yet we are still dealing with some of the same carriers as we did on Day One. Without carriers who are willing and want to deal with you, all the freight in the world isn't going to be of any benefit. One last word of wisdom, if are going to enter into this endeavour, do it right and be legal, complying with all relevant regulations. It will set you apart from the some of your competition and also display to customers and carriers alike, that you are a serious and professional operator. Good luck to you!

 

[lowmiler88]

If you expect 1 million in sales you should have 2 million in the bank or a good line of credit.

 

[loaders]

I am not sure if I would go that far, but definitely, at least 6 months of payables in the bank. Again, pay your carriers promptly within their terms and use either your own money or the bank's to carry you until your customers pay. Problem with the bank is they won't offer you anything unless you have some collateral, like your home you can pledge.

 

[lowmiler88]

Loaders you are correct I should have put it that if you are expecting a 100K in sales a month you need access to 250K because carriers need to be paid in 30 days or less and if you stay on your receivables you will be paid on average 40 to 60 days.

 

[loaders]

Let's face it, the more money you have access to, the better. You can never predict a couple of slow months, or unexpected expenditures. Operating "close to the bone" can make for sleepless nights, premature wrinkles and grey hair. Oh wait a minute.......my grey hair is strictly genetic, and lovingly acquired over the years!

 

[Freight Broker]

And if you've got 2 million in the bank then for heavens sakes don't start a brokerage. Do what you did to acquire that 2 mil in the first place.. or live off the interest.

 

[loaders]

Or say what a good friend of mine says " I am working on my second million, because I gave up on the first one"!

 

[PackRat]

Or the other way to say it: "How you get a Million dollars in the bank working in Trucking?"...."Start with 2 Million"
LOL

 

[KeyFactor]

Let's face it, NOBODY has that kind of cash lying around, but this liquidity issue can be addressed by factoring. Broker sells invoice to factor, factor pays carrier directly on broker's instruction. Broker may offer QuickPay to offset factoring fees. Factor does credit work on shipper, which allows broker to understand his risk and calculate costs. Everyone wins.

 

[Michael Ludwig]

I do.

 

[bull958]

Show off.

 

[dad2andrew]

I do.

Someones rates are well buffered then.

 

[loaders]

Or, just a lifetime of careful saving and cautious expenditures.

 

[Freight Broker]

And notice he's not starting a brokerage..

 

[FR84ME]

Let's face it, NOBODY has that kind of cash lying around, but this liquidity issue can be addressed by factoring. Broker sells invoice to factor, factor pays carrier directly on broker's instruction. Broker may offer QuickPay to offset factoring fees. Factor does credit work on shipper, which allows broker to understand his risk and calculate costs. Everyone wins.

Brokers don't factor invoices, not that I've ever heard of anyway. If you are a 3PL and have to factor you are showing your customers you are marginal at best. That would be embarrassing.

 

[SCAM CHASER]

Brokers don't factor invoices, not that I've ever heard of anyway. If you are a 3PL and have to factor you are showing your customers you are marginal at best. That would be embarrassing.

www.ntba-brokers.com - will give you some more info, and yes some brokers factor, but it's more common to see "carriers" who also broker, factor their invoices.