Opening a freight forwarding company is a bureaucratic process and involves following several steps. This is why, anyone who wishes to invest in this area, should think about creating a business plan and making sure all its bases have been covered beforehand. Only by doing so, it is possible to ensure the business won’t face any difficulties due to lack of planning.

This post intends to help entrepreneurs who are planning to open a freight forwarding company. After all, although this field might seem congested, there is always space for new businesses with an innovative mindset and willingness to stand out from the crowd.

Check out some practical steps to follow when creating a business plan for a freight forwarding business!

Creating a business plan for your freight forwarding business

Market research

The first step to creating a business plan is to conduct some thorough market research. Whether you are completely new to the logistics area or have some background experience working in this segment, it is important to take some time to do an industry overview and analyze all the challenges you’ll need to overcome as a freight forwarder.

The freight forwarding industry offers several possibilities for entrepreneurs, so the first thing you should decide is what niche you’ll be investing in (air, sea, road, customs brokerage, integrated logistics, perishables, project cargo, etc). To do so, study the competition near you and try to specialize in something you realize like it’s lacking in your area at the moment – but don’t forget to make sure there are enough demands for this in the region you’ll be operating. Additionally, at this stage, you could also think about differentials that would set you apart from every other forwarder there.

Economic analysis

The second phase is when you will find out if opening a freight forwarding business is economically feasible for you. This step involves building a financial plan, which should include an estimate of the initial expenses to start operating as a freight forwarder, such as rent, the remodeling of the space and registration fees.

Besides, you should also consider your permanent expenses, like the salaries of your employees and monthly bills. To finish, think about the revenue you are likely to have in the first year operating. Then, you will be able to see if there is a healthy balance between what you can invest and what you’ll be getting in return.

Obtain proper registration, licensing and insurance

When it comes to freight forwarding, there is a number of documents you need to prepare before opening your business. Each country requires specific registration and licenses for entrepreneurs aiming to operate as a freight forwarder, therefore, it is important to consult with a logistics expert in your area to know exactly what documents you need and how to obtain each one.

Some examples of documents you should consider are:

• Certificate of Incorporation;
• FF number;
• Business License and Certification;
• Business Plan;
• Operating Agreement for LLCs;
• Insurance Policy;
• Consulting contract documents;
• Online Terms of Use;
• Online Privacy Policy Document;
• VAT registration;
• Federal tax identification number.

Choose a suitable infrastructure and hire the appropriate staff

In logistics, infrastructure and staff are two of the most valued things that customers consider when choosing a freight forwarder to take care of their demand. Therefore, if you wish to make an impact from the start, invest in the quality of your facilities and the expertise of your professionals.

Choose to have your office in a strategic location and, if it’s not viable to have your own warehouses/fleet of trucks, outsource this service to provide your customers with a complete range of logistics possibilities. On top of that, hire staff with strong know-how in the services you choose to specialize.

Invest in marketing to get your name out there

Marketing is always important, but when you are starting a business, you shouldn’t think twice about making this investment. Count on the assistance of an agency with specialized knowledge in logistics, such as LoGo – Logistics Marketing! Their specialists will tell you exactly what to do in order to highlight your differentials in the market and make sure your business gets all the visibility it needs to start on the right foot!

Join a logistics network

Besides having the right infrastructure and professionals, another thing that customers really value is whether or not your company has reliable connections worldwide. After all, freight forwarding businesses are mostly b2b and you will need partners to represent your customer’s demands overseas.

For this reason, an important part of creating a business plan is to analyze the options of logistics networks available in the market, along with their membership fees and the advantages each one can provide to your business. Then, choose the most suitable one and start networking with the right people as soon as you open your business. You will see how this is an indirect marketing strategy since it can bring you many business opportunities.

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