Freight Brokerage Business Plan
Silicon Freight Brokers (SFB) is a specialized freight broker service located in Hood River, OR. The company has been set up as an Oregon C Corporation by the owner, Steve Tookarefol. SFB’s objective is to become the premier silicon chip freight broker, increasing their client base by 20% a year.
Freight Brokers and Silicon Chips
The freight broker industry is the middle man of the shipping industry. They are also known as third party transportation providers. Freight brokers provide a service by linking customers with shippers and trucking companies. Their service is indispensable when moving goods throughout this country as there are literally hundreds of different shippers offering thousands of different services. The freight brokers make the process of securing a shipper quite easy with one-stop shopping.
The silicon chip industry is a growing industry that to a large degree has fueled the incredible growth of the late 90’s Internet boom. Silicon chips are the basis of all types of computers as well as hand held devices such as cell phones, PDAs, even watches and some household appliances.
SFB will be occupying a niche within the general freight brokerage market by specializing in the shipment of silicon chips. Silicon chips are very specific, unusual cargo that requires special attention. The chips have a very narrow range of temperature and humidity parameters that must be maintained. In addition to these unusual requirements, there are other specific needs that silicon chip companies have. By specializing on silicon chips as their only cargo, SFB will quickly gain market share and be known as the premier broker for chips.
The industry of chips is comprised of two distinct customers, manufacturers of chips and purchasers of chips. The manufacturers are based in the USA, however some of them produce in the States while others farm out production overseas and them import them. The chip purchasers are primarily Intel, IBM, and Motorola.
SFB is led by a seasoned management team of Steve and Wendy Tookarefol. Steve has over 10 years of freight experience, working for several different companies. This work experience has been instrumental in allowing Steve to accurately determine the market need and meet it. SFB has coupled Steve’s in-depth trucking/ freight brokerage knowledge and insight with his wife’s expertise in the silicon chip industry. For the last seven years Wendy has been an industry consultant, working quite close with companies such as Intel.
SFB’s solid business model is forecasted to reach profitability by month six. SFB will achieve market penetration by remaining laser focused on their market niche, while fully utilizing their strong management team.
Silicon Freight Brokers objectives from the first three years of operation include:
- To create a service-based company whose #1 ambition is to continually exceed the customer’s expectations.
- The utilization of Silicon Freight Brokers in at least four of the top 10 silicon chip producers, as listed in Silicon Industry Journal.
- To increase our number of served clients by 20% per year through superior performance and word of mouth referrals.
- To develop a sustainable, profitable, start-up business.
The Silicon Freight Brokers’ mission is to provide the customer with the most satisfying shipping experience that they have ever experienced. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.
Silicon Freight Brokers, as the name implies, is a freight broker for the silicon chip industry. SFB has two types of customers, buyers and sellers of silicon chips. SFB is establishing relationships with carriers that specialize in this unique cargo. We will offer our customers the highest level of service.
2.1 Start-up Summary
Silicon Freight Brokers’ (SFB) start-up costs include all the equipment needed for an office. Additionally, there will be legal fees, marketing fees, accounting fees, trade association dues, and deposit for the lease. The largest expense for the office is a computer system. The minimum requirements for this system are: 600 mhz Pentium processor, 128 megabytes RAM, 10 gigabyte hard drive, printer, and CD-RW, Microsoft Office, and an accounting suite. The office will also require a DSL broadband connection, two land-line phones, fax machine, copier machine, and some office furniture. The legal fees are for corporate formation, and the generation and review of contracts. The marketing fees are the costs associated with advertisements in industry journals, brochures, and website visibility generation. The accounting fees are for the services necessary for the formation of the business, while the majority of the accounting after start up will be done in-house with an accounting suite on the computer.
Silicon Freight Brokers is a niche freight broker for the silicon chip industry. SFB will provide a brokerage service to link manufacturers of silicon computer chips and the users of the chips such as Intel, Texas Instruments and Motorola with freight companies. Freight brokers are basically the “middle man” between a shipper and trucking company, also referred to as “third party transportation providers.” SFB will work with companies to find a safe, economical way of transporting silicon chips. SFB will have two types of customers:
- Silicon chip manufacturers. These can be further broken down into two categories, those that manufacture overseas, and those that manufacture in the U.S.
- Manufacturers of processors that utilize silicon chips.
Market Analysis Summary
Silicon Freight Brokers will be concentrating on the freight brokerage of silicon chips. This is a small, specialized, niche of the general freight brokerage industry. SFB is concentrating on this space for several reasons:
- SFB has extensive industry knowledge and insight regarding freight brokerage and silicon chips.
- The silicon chip industry is continuing to grow as our dependence on technology increases.
- There is plenty of space for a new specialty freight brokerage company. SFB’s extensive knowledge of both the freight and chip industry provides for valuable insights that can add significant value to SFB’s customers.
4.1 Market Segmentation
Silicon Freight Brokers will be focusing solely on the freight brokerage of silicon chips. There are two distinct customers in this niche market, manufacturers of the chips, and the buyers of the chips who are processor manufacturers. The manufacturers of the chips can be further broken down into two groups, those that have manufacturing facilities abroad and those in the U.S. Those that have facilities abroad will generally ship them to a United States ocean port, and from there they travel via truck to a processor manufacturer. The second group of chip manufacturers, those that have facilities in the U.S., transport chips via truck from their facility to the processor manufacturer. Although, in general, silicon chip production has shifted overseas, there are a collection of chip manufacturers still located in the States. The difference between the two types is not very significant, SFB arranges for the carrier to pick up the chips either off the boat or from the manufacturing facility. Whether SFB deals with the manufacturer or the seller is a function of the contractual terms that the buyer and seller agree to. Sometimes it is the manufacturer’s obligation to ship, other times it is the buyer’s obligation to arrange pick up of the chips. The chip buyers are manufacturers that use the chips in their processors. The largest processor manufacturers, Intel, Texas Instruments and Motorola, are located in the U.S.
4.2 Target Market Segment Strategy
Silicon Freight Brokers is concentrating on the silicon chips niche as it is a very specialized, thriving market. By focusing in this market space, SFB will be able to offer superior service. Shipping of silicon chips requires special types of trucks that are humidity and temperature controlled. SFB will form intimate relationships with the unique carriers because this relationship will provide SFB with special insight, which will allow SFB to meet any need a customer might have. Shipping silicon chips has special requirements and SFB will be more familiar with these requirements because it will not be distracted by offering other services. Specialization also allows SFB to develop close relationships to the limited number of carriers that are equiped to transport chips. Lastly, the growth of processor manufacturing, which requires silicon chips, has far outpaced most other industries in this country. This growth rate makes this niche especially attractive. In the freight broker market, there are general brokers that offer a wide range of services. There are a few companies that specialize, but no one is as niche focused as SFB. Because most all of the silicon chips are transported through the U.S. via trucks, there is considerable growth in the specialty freight brokerage business. SFB will be marketing our business through several different outlets. The first is the Internet. A lot of the industry has moved to the Web as means for communication regarding freight quotes. SFB will be developing a website where a customer can go to find out an estimate for freight rates. The website would key for finding the requisite information like weight, pick up and destination, and SFB would work with our carriers to find them the most safe and economical solution. Because SFB is only working with silicon chips, the complexity of the number and type of trucks to be used (non-temperature controlled, etc.) is reduced. SFB will also be running advertisements in silicon chip trade journals. The ads in the silicon chip journals will provide visibility for SFB to the manufacturers and buyers of the chips.
4.3 Service Business Analysis
There are many different freight brokerage services. This market is broken up into generalists, handling all types of freight brokerage, and specialists, handling materials ranging from heavy equipment, oversized loads, perishable commodities, or hazardous materials. The chip buyers and sellers make the shipping decision based on service (defined by many variables including customer service, speed, safety of the product) and price. Most business is repeat business, 70-80% according to industry statistics. Once a customer finds someone who they are happy with, they typically stay with them.
With Hyundai’s New EX8 Mighty Truck You Can Move Mightier Loads
Hyundai Automotive South Africa’s commercial vehicle range has received a healthy injection with the launch of the new EX8 Mighty truck, boasting several new features and an industry-leading factory warranty that makes it a formidable contender in its market segment.
The new EX8 Mighty – a successor of the previous HD truck – stems from a long, proud and successful tradition of building competitive commercial vehicles with notable strengths in Korea, the rest of Asia and the Middle East.
Assembled at Hyundai Automotive SA’s commercial vehicle factory in Apex, Benoni, The EX8 Mighty joins the ever-popular H100 (also referred to as Hyundai’s “Bakkie”) and the H1 panel van in Hyundai Automotive SA’s commercial vehicle range.
Hyundai Automotive SA’s Commercial Vehicle Division has its own truck body builder on site in Benoni that produces several standard and customized options according to the customer’s specifications. This includes van bodies, dropsides, tippers, tautliners, trailers and H100 tipper conversions. The truck body builder also does all kinds of repair work for customers.
More spacious cabin, better comfort and visibility
Compared to its predecessor, the EX8 Mighty’s interior space has been increased from 2,9m2 to 3,5m2. Storage space for driver and passengers has also been increased to 11,8 litres. Visibility from inside the cabin has been greatly improved by increasing the windshield size – an important feature, because better visibility ensures safer driving. The windshield height has increased by 20mm, and width by 70mm.
Also, the dash has been lowered by 80mm, allowing an increased visibility angle of 2,2 degrees. Interior space has been enhanced by increasing the interior cabin height to 1 490mm. The steering column now has forward-backward adjustment of 60mm, as well as height adjustment of 76mm – an altogether new feature that enables the driver to set the most comfortable and safest driving position.
Greater load-carrying capability
The longer wheelbase of the new EX8 Mighty has increased its versatility as a load carrier and resulted in a longer deck (4 850mm) that allows you to carry more freight and do fewer trips.
The Gross Vehicle Mass (GVM) of the new EX8 is 7800kg versus 7500kg of Hyundai’s main competitors, which also means you can carry more with the EX8 Mighty. The dropside version of the EX8 has a load capacity of 4 tons.
Various load carrying options according to customers’ demands are available, including a tipper conversion, closed bodies for secure transport of goods, and the very practical dropside body that ensures easy loading and off-loading of goods.
To summarise, we have a well-priced commercial vehicle that has:
- An industry-leading factory warranty of 4 years, with no limit to
- the mileage
- An extra 300kg GVM in comparison to competitors
- Service intervals that have been increased to 20 000km in order
- to reduce the cost of ownership.
Five EX8 derivatives, with keen pricing
Hyundai is launching the new EX8 in five derivatives at very competitive prices. They are the:
- EX8 LWB CC R379 500 (excl. VAT)
- EX8 LWB CC (with aircon) R394 500 (excl. VAT)
- EX8 Dropside R413 100 (excl. VAT)
- EX8 Dropside (with aircon) R428 100 (excl. VAT)
- EX8 SWB Tipper R451 500 (excl. VAT)
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Auto Repair Shop Business Plan Sample
Start up an auto repair shop using this detailed sample business plan.
Start up an auto repair shop using this detailed sample business plan. Use this example to compile your own.
F & R Auto (F & R) is the desire of John Ford and Michael Ronald who together have 30 years experience as auto mechanics. Both have a dream of starting up their own company and offering better service to their clients than competitors.
The objectives over the next three years for F & R Auto Repair are the following:
- Sales revenues increase steadily through year three.
- Institute a program of superior customer service through rigorous evaluation of service experience.
- Hire three more mechanics.
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1.2 Keys to Success
In the auto repair industry a company builds its client base one customer at a time and mostly through word of mouth marketing. With this in mind, the keys to success for F & R Auto Repair are:
- High-quality work.
- Constant contact with clients so as to keep them informed about the state of their automobile and the repair job progress.
- Knowledgeable mechanics that are friendly, customer oriented, and will take the time to explain to customer the intricate nature of our business and our work.
The mission of F & R Auto Repair is to provide high quality, convenient and comprehensive auto repair at low cost. The most important aspect of our business is trust. It is the goal of our firm to have 100% customer satisfaction in regards to quality, friendliness, time to completion and to discover new ways to exceed the expectations of our clients.
The company will be a partnership with John Ford and Michael Ronald each owning 50% of the company. The company will be a limited liability company registered in the state of Washington. The firm will have facilities on 1312 1st Ave NW in Ballard, a neighbourhood of Seattle.
The facilities will contain a two-bay garage, office space and storage space for tools, parts, etc. The company is seeking a loan in order to finance the start of operations for the company. Each of the owners will be putting up some of their own capital as equity.
2.1 Start-up Summary
The data obtained for the start-up comes from research done in the Seattle area with other small mechanic shops who have started their own business. Inflation has been taken into account between the estimates of these fellow business owners (and when they started) and the current prices for expensed items. Much of the equipment to go into the facilities such as tools, air compressors, etc., are currently owned by the two partners.
Related: SWOT Analysis Samples
F & R Auto offers a wide range of services as outlined in the detailed sections below. It is ultimately the goal of the company to offer a one-stop facility for all auto servicing needs, including brakes, transmission, wheel alignment, etc. In this way the company can offer greater perceived value for the customer than many other shops which specialise in certain areas.
The industry is highly competitive with suppliers having a great deal of power in setting and negotiating the prices of their products and services to repair shops. In addition, because the customers see the service as undifferentiated and a “commodity” with little value separation between competitors, buyer power is also very high.
Finally, the barriers to entry are moderately low, and the large number of competitors in this field, including substitutes (such as do-it-yourself work) mean that the pricing for such services are very competitive. The only way to have an advantage in this industry is a low cost leadership principal applied aggressively or to create higher switching costs through the building of strong business to customer ties.
F & R Auto will hire trained and certified mechanics who are able to prove they have superior customer awareness and interaction. It is the company’s professional people who will fulfill the firm’s contracts and goals. The largest part of the company’s expenses will be in labor costs.
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3.1 Service Description
F & R Auto provides a wide range of auto repair services. These include:
- Scheduled maintenance.
- Wheel alignments, tires and rims.
- Brake repair.
- Comprehensive engine repair.
Each job or project will be on a reservation basis, although we will accept a small percentage of drive in repair work.
3.2 Competitive Comparison
The auto repair industry is highly competitive. Each company within this field has high capital costs, low margins, and a high intensity of competition.
Suppliers have a great deal of power in setting and negotiating the prices of their products and services to repair shops. This is due to the fact that the suppliers who absorb the greatest amounts of cash from repair shops are large auto part companies. These companies are more consolidated that the repair industry, have deeper pockets, an almost limitless number of substitute customers, and finally they are the single most important supplier to F & R’s industry. Therefore, these companies can set whatever price they wish to. Furthermore, labor is a supplier in this industry as well, and salaries for such individuals are well known and not very flexible.
In addition, because the customers see the service as undifferentiated and a “commodity” with little value separation between competitors (if they offer a suitable level of quality) buyer power is also very high.
Additionally, the costs of our services are not cheap, and buyers are willing to search for the most favourable combination of price and acceptable service. The barriers to entry and exit are moderately low in this industry. Switching costs are virtually non-existent and the costs to entry and exist the market are low.
The large number of competitors in this field including substitutes mean that the pricing for such services are very competitive. The only way to have an advantage in this industry is a low cost leadership principal applied aggressively to all aspects of the business or to build up customer relations to a point where the switching costs are raised.
The technological revolution in computers has enhanced our abilities to diagnose and repair our clients vehicles. F &R will remain on the cutting edge by instituting the use of computer diagnostic equipment in its shop. The company will continue to seek new ways to provide a better service through technology.
3.4 Future Services
The company does not have any plans to create further services at this time.
4Market Analysis Summary
Since F & R will be able to service any vehicle on the road, including motorcycles and campers, it does not make any sense to segment our market. Our potential customer includes every household in Seattle that owns one or more vehicles. The industry does not have any seasonality that affects it.
Trucking Business Plan Sample
Use this sample business plan to get your trucking business on the road.
Use this sample business plan to get your trucking business on the road. Use this example to compile your own.
Mike’s Trucking Service is a Dallas, TX based trucking company that aims to be one of the largest trucking companies in the USA. Mike’s is initially focusing on the food industry with plans to diversify with new industries served.
Mike’s has chosen the trucking industry as the growth prospects are encouraging and stable, with trucking dominating the freight industry in this country.
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Mike’s will offer both for-hire trucking as well as private carriers. Most of their business will be derived from the private carriers. For the private carrier segment, both truck load (TL) and less than truck load (LTL) will be offered. Mike’s services will be especially attractive to the food industry, as participants in that industry typically use referrals, reputation, and customer service as purchasing variables.
Mike’s will serve four different market segments. The first, as mentioned earlier is the food industry. This segment is growing at an annual rate of 3% with 3000 potential customers identified. The second segment is the computer industry with a 5 % growth rate and 1500 possible customers. The retail industry is the third with a 2% growth rate and 1500 customers. The last segment is a catch all “other” segment growing at 2% and 500 customers.
Mike’s Trucking is lead by Mike Smith, a 15 year industry veteran. After college Mike went to work for C&F trucking as a driver for two years. Mike felt that it was instrumental to have experience within an industry at all levels. It was quickly obvious that Mike has skills beyond driving trucks and moved into management for three years.
After five years at C&F it was time for a change and Mike went to Yellow to manage their Southwest region operations. It was ten years of experience at Yellow that provided Mike with the skill sets, experience, and confidence to decide to open his own trucking company business.
Mike’s will employ three distinct marketing efforts to raise awareness about the company and generate new customers. The first strategy is the use of promotions. This will focus on press releases and advertising using various different media. The second effort will be the use of incentives. The incentives will be offered to existing customers. The last effort will be printed brochures. These will be distributed to new and existing customers.
Mike’s Trucking Service is a customer-centric organisation looking to become one of the premier trucking companies in the USA. Profitability is forecasted to occur at month three. Mike’s has conservatively projected sales of $100,000 for year one and $400,000 for year three.
The mission of Mike’s Trucking is to be the leading trucking company servicing the United States.
Mike’s Trucking Service is a Texas LLC, with principal offices located in Dallas, Texas. Mike Smith, president and CEO, is the majority owner. He has been in the trucking business for 15 years.
2.1 Company History
Mike’s Trucking has been in business for one year. We have maintained financial stability during the first year of operation due to the extensive industry experience of our management team.
The trucking industry provides transportation services for persons or companies looking to haul heavy things. Mike’s Trucking enables someone to lease a truck, of any size, for any project that needs hauling.
We will provide this service to the whole of the Dallas area, and hope to expand from this base area within the first five years of operation. This service is provided on two bases: for-hire and private carriers.
Of these two segments, Mike’s Trucking will concentrate on the for-hire carriers, and, more specifically, the truckload (TL) and less-than-truckload (LTL) segments. The services offered, and the markets being targeted, are discussed throughout the following section.
4Market Analysis Summary
Mike’s Trucking has an opportunity to entrench its competitive position in the regional transportation market by selectively focusing its target market on the food industry. The company has already had experience in servicing such clients and it believes that there is a growing demand for reliable transportation solutions in this customer segment.
4.1 Market Segmentation
There are several potential customer segments that we will provide our transportation services to. Major customer segments include the food industry, PC and semiconductor manufacturers, and retailers. The chart and table below outline the current market size and growth estimates for these customer segments in Texas.
Large established companies in the afore-mentioned segments (especially in the food industry) have their own truck fleets, while smaller players outsource the transportation function. The latter vary in the scale of their operations, but have a steady demand for reliable transportation solutions. We will actively solicit such customers.
Related: Free SWOT Analysis Template
4.2 Target Market Segment Strategy
Mike’s Trucking will focus its marketing budget on a selected industry niche. A narrow-served market focus will help strengthen the company’s reputation of a reliable transportation services provider and will generate favourable referrals.
The major customer segment the company is focusing on is the food industry. Companies in this segment have varying needs, and Mike’s Trucking has already gained valuable experience serving such customers. The company management believes that by increasing its truck fleet it can capture additional clients and provide better service to existing clients.
4.3 Service Business Analysis
Market Description Industry: Trucking, except local Establishments that are primarily engaged in furnishing “over-the-road” trucking services or trucking and storage services for freight generally weighing more than 100 pounds. Such operations are principally outside a single municipality, group of contiguous municipalities, or municipality and its suburban areas.
4.3.1 Competition and Buying Patterns
Although there are major players in each of the commercial carrier market segments, the market remains highly fragmented. According to the Dallas Yellow Pages, there are numerous companies providing different kinds of the trucking services. Major competitors for Mike’s Trucking are those companies who have comparable truck fleets and are also targeting the food industry.
Market research shows that customers in the food industry are price sensitive, and they value on-time deliveries, special handling capabilities, and less-than-truckload orders. Customer referrals and carrier’s reputation are believed to strongly influence the buying decision.
4.3.2 Financial Risks and Contingencies
The company recognises that it is subject to both market and industry risks. The two primary risks to the company are:
Industry concentration risk. The company is mainly focused on food industry businesses in the United States. This position is favourable since the industry is fairly stable. Any slow down in the food production would have negative repercussions for Mike’s Trucking. To mitigate this risk, the company is looking at diversifying its trucking business to include other industries as well. Operational risk. Mike’s Trucking recognises the fact that there is an inherent risk in transporting cargo. Any damage to cargo may undermine the profitable of the company. To reduce this risk, the company maintains all necessary insurance.
4.3.3 Business Participants
With some $344 billion in 1998 revenues, the trucking (or motor carrier) business claimed 79% of the U.S. commercial freight transportation market. This total was divided among two sectors: private carriage and for hire.
Although private carriers comprise the largest component of the motor-carrier industry, financial information isn’t available for them. However, the industry is estimated to provide services valued at some $200 billion annually (or 58% of motor carrier revenues in 1998). The American Trucking Association (ATA) estimates that there are more than three million trucks operated by private fleets transporting 3.5 billion tons of freight annually.
The for-hire category generated $144 billion in 1998, or 42% of the industry total. Of that $144 billion, some $105 billion (73% of the sector’s business) came from truckload shipments, and $39 billion (27%) was from less-than-truckload and package/express delivery.
Truckload (TL). The national for-hire truckload segment had total revenues of $65 billion in 1998. The TL sector has historically been mostly privately owned, with the exception of the top ten publicly-owned companies (For this reason, we focused on the LTL sector in this survey). Schneider National Carriers was the largest TL operator, with revenues of $2.8 billion in 1998, followed by J.B. Hunt Transport Services ($1.8 billion), and the Landstar family of truckload-carriers ($1.3 billion). Of the 50,000 truck load carriers, perhaps 95% had annual revenues of less than $1 million. Less-than-truckload (LTL). The ATA estimates that the less-than-truckload market garnered $20 billion in 1998. Of this amount, the fast-growing regional segment accounted for slightly more than the national market.
The largest national LTL carrier was Roadway Express Inc., with $2.32 billion in LTL revenues in 1998; the company’s total revenue of $2.55 billion includes TL freight. Yellow Freight System (a unit of Yellow Corporation) was close behind, with $2.25 billion (out of $2.46 billion total). Consolidated Freightways Corporation was third, with $1.95 billion in LTL revenues. In the regional LTL market, Con-Way Transportation (a unit of CNF Transportation Inc.) was the largest player, with $1.5 billion in LTL revenue in 1998. Second place belonged to US Freightways, whose family of five carriers generated some 41.4 billion in LTL revenue. American Freightways Corporation was third, with $928 million in less-than-truckload revenues.
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