$75K Freight Broker Bond Options – Which is Right for You

This is a guest post from Eric Weisbrot from JW Surety Bonds to provide a little more clarification on bond options for brokers with the new requirements.

In the freight broker industry where fraud is unfortunately a common occurrence, federal regulations offer protection to all parties through proof of financial responsibility, among other requirements. If you are a licensed freight broker, you likely know that the requirement to maintain your authority has been increased from $10,000 to $75,000, causing panic throughout the industry.

As several options for the financial security requirement are available, it is imperative you fully understand the upsides and downsides of each.

What Options Are Available?

The FMCSA currently requires freight brokers to file proof of a BMC-84 surety bond or BMC-85 trust fund.  Either will satisfy the requirement to operate legally and ensures payments to shippers or motor carriers should the broker fail to carry out their contract.

With the highway bill Moving Ahead for Progress in the 21st Century (MAP-21), financial security choices for brokers have been expanded to include a group surety trust fund, an option that allows freight brokers to pool deposits together in a trust fund.

What is a Freight Broker (BMC-84) Bond?

A freight broker bond serves as a guarantee to the parties involved that the broker will follow FMCSA regulations and that potential claims will be paid for.  Form BMC-84 is filed with the FMCSA as proof that you have met financial responsibility requirements.  With a freight broker bond, you pay a percentage of the bond amount as premium to a surety company, who may require collateral as well, to guarantee you and back your bond to the full amount mandated by law.

What is a BMC-85 Trust Fund?

With the new requirement, the BMC-85 trust fund is $75,000 of your money placed with a financial institution, held in escrow as long are you are licensed.   Once you have identified a bank, trust company or other insured institution, you deposit full collateral in a trust fund.  Not only are these funds tied up for the duration of your business and drawn upon in the vent of claims, there are also fees assessed to maintain the account.

What is a Group Surety Trust Fund?

A third option is the group surety trust fund, where a number of brokers and forwarders pool deposits on the required $75,000 and place with a financial institution.  Group trust funds may be attractive to those brokers who cannot qualify for a surety bond, or can qualify but only with unattractive terms such as high premium or a cash collateral requirement.

Having many brokers participate in a pool sounds good as it spreads the cost to the group, but in reality this format increases the risk to its members.  Reserves will likely fall short of potential claims if the group is very large.  For example, if 100 brokers deposited $4,000 each, there would be $400,000 in the pool.  But with the $75,000 bond requirement, the collective liability is $7.5 million.

In fact, the Transportation Intermediaries Association (TIA) has requested clarification of the group trust fund option from the FMCSA, as they see the pooled trust as a potential risk to the industry in that sufficient assets may not be readily available to pay claims.

Also a concern is that the group trust fund appears to be a form of self-insurance that groups high-risk applicants from a high-risk industry, who at the same time are trying to pay expenses, turn a profit themselves, and still be in the position to pay claims.

Compare the Freight Broker Bond, Trust Fund and Group Trust Options

The most notable difference between the BMC-84 bond and the BMC-85 trust fund is found in your bank account.  A surety bond premium is only a percentage of the full amount of the bond.  This premium is paid annually, but allows your cash to be available rather than secured in a trust account.

When it comes to claims, with a BMC-84 bond, the surety company is there to pay damages because your bond is a form of credit to you.  Surety companies have experienced claim specialists who will investigate on your behalf and try to avoid cancellation.  This is very important to you because of the regular occurrence of false claims in the freight broker industry.

With a BMC-85 trust fund, claims are often immediately settled with your cash from the trust fund with no initial investigative period.  After claims are reviewed, payment may be adjusted after the fact.

As for the group trust fund, if you have a choice between a surety trust pool and an actual surety bond at the same cost, the surety bond is the best choice; you’ll have the financial backing of an insurance carrier with a set amount of reserves where only your claim activity can negatively affect your business.

How to Get the $75K Bond

Until recently, all freight broker bond programs required one or all of the following, collateral, personal/business financials and strong credit. JW Surety Bonds has negotiated a new program for the $75K Freight Broker Bond to help the small to midsize brokers stay in business.

  • No collateral required
  • Approval even with bad credit
  • No personal or business financials required
  • Bond rates for this exclusive market cannot be beat
  • Online approval in 5 minutes

If you feel the surety bond is the best option for you, visit our website to apply and get an instant approval

Do You Know about These New Surety Bond Requirements for Freight Brokers?

It used to be that the surety bond required for freight brokers was at $10,000. Soon, it’ll be $75,000, thanks to legislation signed by the President in July of last year and which will take effect in July of 2013.

The new business cost drew some howls from small freight brokerages, but since there’s some months yet before the law takes effect, you may want to know what the updated surety bond requirement would mean for your business.

History of the Freight Broker Surety Bond

The bond requirement that freight brokers have to comply with to obtain their license came about as early as the 30s. Back then, it was designed to protect shippers from unscrupulous brokers. In the 80s, judicial action extended that protection to carriers to ensure that freight brokers paid the truckers for services rendered.

Many decades later, around 2004, there was a petition from a major trucking association to further increase the bond set in the 70s at $10,000 to as much as $500,000. They argued that the current surety bond amount is insufficient to cover their losses when their trucks aren’t paid by fly-by-night freight brokers—the rates have to account for inflation, too.

One counter argument after another shelved the proposal, until three big industry associations usually at odds with one  another—the Owner Operators Independent Drivers Association (OOIDA), the American Trucking Association (ATA) and the Transportation Intermediaries Association (TIA)—were able to iron out an agreement for the increase. Their lobbying in Congress yielded fruit when the bill increasing the surety bond passed.

There’s some comfort to what some legal experts are saying. The law on the new freight broker surety bond may actually take effect several months more after July 2013.

The regulation will still undergo public comment, re-evaluation and rewriting (based on the comments submitted) before freight brokers will actually shell out the necessary expense. And then there might be legal challenges to the new law, setting back its implementation to a few months more. Industry insiders are saying the new surety bond may take effect in 2014 or even in 2015. Freight brokers will be given enough time to raise the funds to comply with the new regulations.

How the New Surety Bond Will Affect Freight Brokers

Again, the increase in the surety bond requirement is supposed to protect shippers and carriers from shady freight brokers. The higher rates are designed to weed out fraud in the industry and keep motor carriers from taking on losses when freight brokers fail to pay them.

Some small freight brokerages though are accusing the big brokerages behind TIA—a professional association of freight brokers—that they’re trying to eliminate competition from small operations (the ‘mom and pop’ variety).

They may not be far off, given the possible consequences for smaller freight brokerages are once the rate increase on surety bonds goes in full force:

  1. Mergers between freight brokers. It’s the best solution—when two freight brokerages combine their economic power in order to afford new rates. This could yield to a stronger, better business and partnership because both will bring a solid base of loyal shippers and carriers to the table.
  2. Sale of freight brokerages to more liquid brokers. Some brokerages may get lucky. Since they’ve built enough reputation and goodwill for their brand, not to mention a steady base of customers, they could get other brokerages—existing or new brokers—to purchase their business. At least, they’ll exit with enough finances to show for their years of hard work.
  3. Business closures. Indeed, $75,000 is a big outlay that small businesses won’t absorb easily. Although the higher surety bond rate will edge out unscrupulous freight brokers it’ll also negatively impact reputable but smaller property brokers who can’t afford the new rates given today’s economic climate.
  4. Stiffer requirements for obtaining surety bonds. Experts are saying that underwriters will hesitate to take on a $75,000-bond more than ever. (They’re already cautious on the $10,000 bond.) To compensate, they might ask freight brokers to match it with liquid assets comparable to or even more than the amount of the new bond rate.
  5. Changes in hauling rates. The country’s economic prospects are picking up but not enough to cushion the impact of increasing rates. The freight broker may have to distribute the added expense across loads. Otherwise, they’ll have to take in more loads to absorb the costs so as not to turn off customers if they have to increase service rates. Somewhere somehow, there are additional risks and tradeoffs to this possibility but until the rates are in effect, we’ll never know what they are.

Actually, other freight brokers welcome the rate increase, particularly because there’ll be fewer competition in the market. Plus, there’ll be additional barriers to entry into the freight brokerage business. To date, there are about 20,300 property brokers with surety bonds in the country. With the rate hike, this figure could dive considerably, resulting in more business for surviving freight brokerages.

What we haven’t factored into all these though is the resiliency of small business owners. We make up the backbone of the American economy. We’ve gone through many challenges and survived many of them. Unlike “mega” brokerages, “micro” freight brokers can survive on up to 10 steady, profitable customers so there’s a huge likelihood that we’ll weather this surety bond rate hike, too. After all, every business suffers setbacks once in a while but no business owner worth their salt has ever backed down from any problems or challenges yet.

Five Ways Freight Brokers Can Find New Customers

For new freight brokers, the prospect of building a steady stream of shippers can be very daunting. There are stories of fresh, eager brokers whose excitement dissipated after a few months of prospecting but getting only one or two shippers whose business were sporadic at best.

Setting up a new freight brokerage and finding customers to keep it viable is always difficult. Freight brokerages aren’t that dissimilar from other businesses—the service might be different, but the way to acquiring a stable base of shippers is the same across any industry: through dogged persistence and a commitment to excellence.

Here are some tips on how to find shippers who can bring in sales month in and month out, to keep your freight brokerage profitable:

1. Make sure that you have a lock on your niche

We’ve previously discussed the importance of targeting a specific niche when you’re starting out as a freight broker. You’ll be able to build your expertise about this particular market, differentiate your business, and create a reliable reputation in the process if you focus on a niche.

2. Search the internet for manufacturers and suppliers in your niche

Five Ways Freight Brokers Can Find CustomersOnce you’ve locked on your niche, finding shippers in your market will be easier. One way that freight brokers do this is through the internet. If you chose a particular market because you’ve had a previous exposure to it, say you worked in that industry for several years, you probably already know the top suppliers and shippers in this space. If that’s not the case, there are several websites that have a comprehensive database of all manufacturers in the country like Solusource.com, Thomasnet.com, Globalspec.com and KellySearch.com. These directories link to the company websites; they even allow you to connect with these suppliers via an email form on the site.

3. Register your company on free and paid freight boards

Grab a membership on these boards by registering your company. You can find shippers with loads looking for carriers on these boards. Free boards let you search their database without paying for membership. Paid sites, however, come with incentives like a credit score—probably the best way to ensure that a shipper or carrier is legitimate.

4. Cold call prospects

Making cold calls is probably the most dreaded part of being a freight broker. There’s nothing like an outright “No” that discourages freight brokers faster than they can get one customer out of 300 shippers they’ve called. The more successful callers had two things going for them: (1) knowing why they called before the call, and (2) knowing about the company they’re calling. It’s rare to achieve success the first time you make that first call so don’t get discouraged. Over time, you’ll learn what works and what doesn’t so you can adjust your techniques to be able to acquire new shippers with ease.

5. Networking

Whether you network online through social media or in the real world through attending expos and exhibits, you build business by getting yourself and your freight brokerage out there. There will always be another freight broker who’ll need your assistance later on, another shipper who’ll get tired with his current broker, another carrier who knows people to connect you to and so on.

Establishing your freight brokerage business may require you to put in 50 to 60 hours a week in the first few months. Most of your activities will be spent looking for shippers willing to put their trust in your freight broker skills. If you’re discouraged along the way, keep in mind that it takes time to acquire a number of customers who can give you steady business every month. Once you do, though, firm up relationships with them by providing dependable, timely service; that way, you’ll gain a loyal base of customer for years to come.

image by charamelody

Here’s Why You Absolutely Must Choose A Great Name for Your Freight Broker Business

Do you want to know one absolute essential piece of your marketing plan that you absolutely must nail? Choosing a name for your freight brokerage business.

You thought you could just go with Joe Smith’s Brokerage and that would be fine? Or you haven’t really given your naming strategy much thought? That’s okay – and from the looks of things it’s not uncommon either.

However, we’re talking about building a business with excellence as a core principle and any business that takes themselves seriously is going to take marketing and branding seriously.

Take Your Marketing and Branding Seriously and You will Reap the Rewards

Taking your marketing seriously means that you take the time and effort to build a great name for your business – one that you can build in to a brand that represents the strength of your organization.

Choosing your business name ranks up there in importance to creating a viable freight broker business plan—the right business name can get your foot right into the door…and the wrong one can consign your freight brokerage to obscurity.

Naming your business can be plenty stressful, too. It’s about this time when many entrepreneurs start wringing their hands, confused and frustrated, and not sure how to proceed. That’s because a good business name must not only tell your target audience what your business is exactly but why they should choose your freight broker services above the rest.

But dont’ fret! There is a solution and working through a few simple steps will help clarify things for you and help you on your way to building a fantastic brand for your freight broker business.

The Qualities of a Good Freight Broker Business Name

Stressful as the process may be, there’s a way to take away the pain from the naming game…like keeping in mind the following aspects of a top-notch business name before you sit down and start brainstorming for an unforgettable one.

  1. It must have value. What will the name evoke when the customer hears the name of your freight broker business for the first time? What kind of image will it convey? Will it express a fun personality or a staid demeanor?
  2. It must be unique. Think branding and trademark. Certainly, you don’t want to sport a copycat name that echoes an industry leader’s branding rather than yours. Besides the iffy legalities of piggybacking on another freight broker’s brand, it tells your potential customers that you don’t have the creativity they need to handle their business, much less have the kind of distinction to your services that’ll make you stand out from your competition.
  3. It must be memorable. How will your business name appear in your logos, on the web, or anywhere you’re going to place your brand on? Is it simple enough to remember or is it too complicated that it’s much simpler to forget it? Take care though that it’s not too simple that it’s become generic…and forgettable.
  4. It must be internet ready. Although a website might be too early to think about while you’re still organizing your business, getting a business name that can also act as your domain name will make it easier for your customers to find you on the web.
  5. It must convey credibility. It’s easy to go for the business name that’ll make your freight brokerage stand out. But you don’t want to stick out too much among the rest that you’re sacrificing integrity and reliability—two of the important characteristics that customers look for in a trustworthy freight broker.

It’s important that you outline the characteristics and connotations that you want to associate with your business name. The process is vital because if you want to outsource the business name generation to a naming firm, it’ll be easier to communicate what you want—you’ll have a starting point they can work on.

Once you’ve got your preferences defined, it’s time to hunker down and work on coming up with a unique, valuable, memorable brand for your freight broker business.

How to Choose a Business Name for Freight Brokers

So now, you’re ready to pick a name for your business. What’s it going to be? Whatever name you come up with, it’s going to stick with you for a very long time so choose with care.

Here’s how to generate a business name:

  1. Walk in your customer’s shoes and brainstorm ideas. What do you want your market to think about when they hear the name of your freight brokerage? Staid and steady? Reliable with a fun side? Or creative and innovative? List down all the characteristics that you want them to associate with your business. See if there’s a common thread among particular words you’ve come up with and sort them into related groups.
  2. Branch out to related meanings. Consider each word group and continue adding nouns, words and phrases that are connected to your original word list. Bring out the dictionary, thesaurus, and if possible, a list of Latin and Greek roots, suffixes, prefixes and phrases—they could come in handy.
  3. Mix and match. Play around with word combinations. Create a new word if you must, merging roots, suffixes and prefixes, and even words and concepts from two different languages. Keep at it until you come up with a list of 10 possible business names for your freight brokerage. While you’re mixing and matching words, keep in mind your branding—what you want to convey to your market. And please, stick to short words that you can pronounce easily.
  4. Discuss with trusted associates. Your top 10 list isn’t the end of the name game yet. You need the fresh perspective of somebody else who can tell you what this list of names tells them at first blush—if they communicate value, are memorable or unique. Ask the opinion of one or more people whom you know have your best interests at heart so as to receive honest assessments. Afterwards, whittle down your list. Cross out the names that don’t suit the image and value that you’re trying to establish.
  5. Research for uniqueness. This one’s tedious work but you need to make sure that the business name you’re thinking of using isn’t being used by another outfit. Google the name, visit local business resources and authorities, and check against existing trademarks to make sure you’re not treading on someone else’s branding. By making sure that the business name you’ve chosen is one of a kind, you not only avoid legal trouble down the road, you’re also making a claim on a unique and potentially memorable business name for your freight brokerage.

So let’s say you’ve brainstormed, considered and researched thoroughly and you now have a business name to go with your freight broker business. The last thing to do is to file the appropriate papers—incorporation papers, trademarks or service marks—to make the name your own.

In the United States, once you associate your business name with your services, getting the trademark is automatic. The only reason why you’d want to make a state or federal filing is if you want your rights applicable across geographical boundaries. Should there be any legal problems down the line, your rights may only apply to the particular localities and not across the nation if you don’t secure your business name this way.

Like it or not though, a business name is one of your must-haves in creating an identity and a branding that distinguishes you from other freight brokers. By following this advice, you won’t have to rely on a hit-and-miss system when choosing a name for your freight brokerage. Plus, you get to avoid the pitfalls of a truly horrendous, downright bland name.

image by faroekat

7 Mission Statement Mistakes That Can Spell Doom for Freight Brokers

The mission statement is the first, crucial part of a freight broker’s business plan. It identifies the goals of your freight brokerage, the specifics of how to achieve these objectives, and the principles that will guide your business in achieving its goals.

The problem is, too many businesses don’t find value in their mission statements. It only exists for compliance’s sake, a bunch of words that get consigned to oblivion once they’ve satisfied officialdom. The power behind mission statements isn’t harnessed. Instead of giving enterprises a laser focus on what they do, clarifying everything—it becomes a useless tool.

Mission statements are very powerful things but to keep them relevant and useful, you’ll have to craft one the right way…and then use it. The only way to know if you’re writing your business intent right is to know the mistakes that other companies have made. Here are some:

Employees and partners did not contribute to the mission statement.

The relevant stakeholders in your business were left out when your freight brokerage’s mission statement was being written. Either you outsourced the crafting or sat down one lazy afternoon and whipped out something that you think your business is all about. Whatever you did, you missed out on valuable inputs when you chose to ignore the opinions of those who had the experiences, knowledge, or background to contribute to and clarify your business focus.

Although you started and own the brokerage, collaborating with your freight agents or partners lends a broader perspective to your mission statement. At the same time, they can identify what elements should be included or modified to keep your mission statement laser focused.

Specific and desired outcomes are undefined.

While mission statements are dynamic declarations of intent, this should not stop you from drilling down to the specifics of your enterprise goals. Identifying what you want to achieve is a basic element, but when deciding on desired outcomes, keep an eye out for whether you want these goals to be for the long or short term.  If your goal is achievable within, say, five years then you can be as granular as possible in your language. If you’re thinking of further expansion in the future, then let your language accommodate this expectation.

Whether the goals are achievable within two years or 10, mission statements are meant to be updated so that they remain relevant to your business. Set a schedule for when to review your business goals with your freight agents and partners and adjust them according to present and anticipated realities in your space.

What you want to do is improbable, incredible and unlikely.

Tread carefully when defining your desired outcomes. While mission statements must straddle a good balance between realism and optimism, it’s possible to stray into improbable territory. You might be laying down business goals that you have no way of attaining…which is why input from the parties that are involved in achieving your objectives are important. They keep you grounded on what’s doable and at the same time point the way to what’s achievable.

Language used is meaningless, vague and uninspiring.

The best way to capture your audience’s attention—whether it’s a customer, employee, supplier or industry partner—is to create a memorable image in their minds. Use concrete visual triggers rather than abstract concepts in your language when you’re drafting your mission statement. Creative writers would say, “Show, don’t tell.” As a freight broker, what are the images that come to mind when considering your industry? Choose images—like roads, trucks, loads, clocks, and so on—that your audience regularly encounters to create powerful triggers in their minds. Or, you can zero in on a key theme inspired by your desired outcomes to create a picture in your mind and include what you see in your statement.

Here’s the mission statement of Otis Elevators which is an excellent example of what we’re talking about:

“To provide any customer a means of moving people and things up, down and sideways over short distances with higher reliability than any enterprise in the world.”

 There’s no compelling story at the heart of your mission statement.

By story, we don’t mean creative fiction. The story that’s relevant to your audience is the satisfactory resolution of a painful problem. You’re in business because there’s a problem that you’re good at solving. For example, as a freight broker, you take care of getting a shipper’s load from Point A to Point B—safely, on time and cost-efficiently—by arranging deliveries with reputable trucking firms. Right then and there, you’ve lit in on your client’s emotional hot button—the secure, timely, and cheap transport of their precious assets.

Also, provide differentiation from your competitors. Who do you serve best? What is it that you do best that the other freight brokerage firms can’t do? Include these types of stories in your mission statement to create unique branding for your company in your mission statement.

The mission statement targets a very broad audience.

Do you know who your customers are? Do you have a particular niche that you service? What do you do best as a freight broker? What is the nature of your brokerage services? When you have the answers to these questions down pat, you’ll narrow in on your target audience (or market), and be able to create compelling messages to connect with them in a meaningful way.

Your mission statement is a long essay.

If your business intent is too long winded, using highfalutin words that only people with several initials after their name can understand, then might as well ditch the effort of crafting a useful mission statement. With your mission statement, aim for short and sweet, about one to two sentences (not paragraphs). If it’s possible to use your mission statement as your slogan or tagline at the same time, then all the better. It becomes a mantra that’ll motivate you, your employees and partners for those times when the going gets tough.

There’s a lot you can do wrong when you’re trying to tell the world why your freight brokerage exists. The mission statement isn’t only a declaration of intent, it’s also your primary branding tool—it helps separate your freight broker services from the rest of the pack. By doing it right, it will keep you focused and grounded on why you’re in the freight brokerage business in the first place.

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The 5 Pillars of Effective Networking for Freight Brokers

No man is an island and nowhere is that more true than in the freight broker business. Your continued viability will depend on a deep database of shippers, carriers, and other freight brokers. But if you’re fresh out of freight broker training school, connecting with the right people in getting your first clients can be pretty difficult.

These days, finding any kind of job—whether salaried or a commission-basis position—through the conventional, cold-calling way yields few desirable results. Six out of 10 jobs are mostly filled through networks and the recommendations of people that you know that’s why expanding your reach is very important if you want to have a thriving brokering business. Plus, networking leads to more profitable customers, more dependable carriers and more productive alliances in this industry.

So how will you find the stakeholders and influencers who can help you establish and keep your freight brokerage firm thriving?

Learn from the five pillars of effective networking to create these fruitful relationships in your sphere.

1. Get out there and meet people.

If you stay in your office the whole day and wait for the right people to come to you, then your license will end up in the cold bin of “inactive license” statistics. Tap into your network’s networks—family, friends, neighbors, acquaintances and business associates, to name a few. Attend trade shows, exhibits, expos, conferences, conventions, and meetups. Participate in professional associations and special interest clubs. Face-to-face engagement is still the most reliable way of getting in touch with new contacts.

However, chatting up a stranger in an industry seminar you’re attending can be quite scary. Small talk is one weapon in the savvy networker’s arsenal that gets used often in these situations. Discuss the weather with someone between coffee breaks or ask your seatmate where s/he’s from. From there, you can progress to a more permanent association.

Remember to meet new acquaintances on their own terms though. While some may be comfortable engaging in small talk right off the bat, others may prefer an introduction through a friend. How will you know? Usually, facial expressions and body language can signal a person’s openness to engage. A smile or a “Howdy!” allows interactions but crossed arms and avoiding your eyes mean they want to be left alone.

2. Adopt the “How can I help you?” perspective not the “What can you do for me?” style.

When approaching new contacts, think about what you can contribute to help them achieve their goals. Ask yourself the following questions:

  • How can I help this person?
  • Do I know someone who can help him?
  • Will this person be helpful to someone I know?
  • How will this person fit my network?

While your networking end goal is to grow your client and carrier base, connecting with people just for that purpose is counter-intuitive. People have built-in radars for coattail riders—they may humor you at first but this is a one-way relationship that won’t flourish for long. In business as in life, reciprocity is always good karma. People never forget favors you’ve done for them and they’ll want to return it to you quickly.

Make yourself accessible and available to someone in your network who needs your expertise, your knowledge, your skills or your connections. Answer questions. Provide feedback. Link friends with each other. The goodwill that you’ve spread about will translate into a wealth of connections that you can tap in the future.

3. Nurture the relationships you’ve created.

Now that you’ve made new contacts, don’t let their business cards gather dust in your address book, rolodex or Outlook folder. Keep in touch through phone calls, email, group meets, impromptu lunch breaks and the like so that you’re always aware of what’s happening to everybody in your network.

Don’t be shy to discuss with them what you’re trying to achieve in your business. This way, you stay in the forefront of their minds. When they need a freight broker to take care of their or their contacts’ loads, you’ll exactly be at the right place and at the right time to provide the service.

4. Model the lessons of others who’ve gone before you.

You don’t need to reinvent the wheel when growing your freight brokerage business. Chances are somebody else has already achieved the goals which you’ve set out for yourself. If you want to earn $100,000 monthly, search the industry for people who did just that. Follow the steps they’ve taken to that six-figure monthly income.

If you want to become an industry influencer, look for the movers and shakers, and get yourself into their network. Find these mentors and role models—you don’t need to be coached formally. Informal discussions and get-togethers usually elicit the kind of information that you’ll never find elsewhere.

You can also read the books they’ve written and listen to interviews they’ve made. There’s always a wealth of resources you can access on these successful individuals that you want to learn from.

5. Leverage virtual networks in your networking activities.

Marketers are the ones who’re profiting the most from the Internet. The World Wide Web has made it possible for them to connect to their customers directly and promote their wares while keeping costs down. Through social media you, too, can find relevant partnerships and alliances to effectively and efficiently reach and sell to your customers.

A fantastic way to build your online network is to make connections with other freight brokers by using LinkedIn. You can also use tools like Twitter, Facebook, Google+, Quora, Yahoo Answers, blogs, forums,  photo-sharing networks, question & answer boards, and other social networking sites to find new contacts, make the initial connection and keep in touch. Rinse and repeat frequently to steadily build your network.

Incorporate these five pillars of effective networking in your daily routine so that it becomes a habit. In the long term, making new contacts and establishing solid relationships with people from the industry will become second nature. And that is something that you can’t learn just from attending freight broker training alone.

Niche Marketing for Freight Brokers

One of the hurdles for entrepreneurs fresh out of freight broker training is establishing a solid reputation as a reliable service provider. Shippers want to be sure that you can guarantee their loads’ safety and carriers want to know they’ll get paid on time.

Small or new brokerage companies have a way of addressing these concerns and at the same time jumpstarting their earning potential the first year. They find a specific segment in the market that larger firms have overlooked or ignored and specialize in servicing that group. It’s called niche marketing and it’s the easiest path to beginning your brokerage business.

Marketing to a narrower niche has its benefits.

One, you get to know your market really well. Serving that market day in and day out, you learn about its standards, idiosyncrasies and special needs. Such expertise goes a long way in acquiring your customers’ trust and in establishing a solid reputation for yourself and your business. Eventually, you develop a profitable network of shippers, carriers, and strategic partners which you can easily tap for business and which can also be a springboard for future expansion.

Two, you can focus your marketing efforts with laser-like precision. Marketing dollars are usually wasted when you market to a broad audience that may not even be listening to you. Targeting a specific slice of the market helps in creating a characteristic customer profile, enabling you to craft messages that push their emotional hot buttons every time you reach out. And because your messaging resonates with their pain and pleasure centers, you get more positive response and more business.

How to Choose a Market Niche

Some freight brokers already know what markets to target even before they get the necessary knowledge from freight broker training. For others not so lucky, they start from the ground up.

If you’re from the last group, there are two ways on how to choose your market niche:

  1. Make an honest assessment of your skills, talents, interests and personality and determine how this will come into play in your freight broker business; or,
  2. Scope out the segmentations in the industry, choose a specialty, then learn everything you can about how to service that sector.

In deciding on a niche, find one that you like but have enough potential for growth to sustain your business over time. Some freight brokers, for example, choose to serve market niches or segments related to their passions and interests like antiques, microchips or cars.

By focusing on a niche that you’re enthusiastic about, you’re able to differentiate yourself from the competition with a can-do, bend-over-backwards type of service. And you know how it is: a satisfied customer is a happy customer is a repeat customer.

Freight Broker Niches

There are many ways to zero in on your market niche and find customers. Here are some techniques that old-timers use in finding their captive market and growing their business:

  1. Focusing on regional niches. Find customers in your immediate vicinity, whether it’s in your city or state. Your particular location may be a manufacturing beehive for cars, microchips, semiconductors, and other goods.
  2. Working with shippers who ship your favorite things. If you’re passionate about cars, you probably know a lot about their makers and can easily gain access to a contact person who can connect you to the decision-makers. Make sure you can grow with these customers and not spread yourself thinly—your enthusiasm must match your capability so you don’t destroy your reputation when you can’t handle loads satisfactorily.
  3. Servicing niches according to type of trucks used. Dry vans, flatbeds, tankers, dump trailers and everything else in between. You can choose to focus on using one or two types of trucks so you’ll be able to find shippers much more quickly.
  4. Brokering cargo that needs specialized handling. When you focus on a particular type of load, say dairy, you can quickly handle truck type to use, climate requirements, shipper preferences and the like.

When serving a particular niche, you become an expert on it over time. Before you know it, you become the go-to guy in your space for certain types of cargo. Once you’ve established a reputation for solid dependability, you can bet broadening your market or your reach becomes much easier.

There’s one danger in niche marketing though—you can become so focused that your total revenue could end up coming from a few sources. Learn from the niche haulers of the trucking industry. Less than 25%-30% of their revenues come from a single source; they keep it diversified even within the niche. With the vagaries of the economy, putting your eggs in one basket can spell disaster when something bad happens…a reality that even large freight broker companies are not immune to.