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“Freight Brokers Have to Know Their Numbers”
Is Your Business Growing Like an “S”?
Okay, what do I mean, “growing like an ‘S’ ”?
Most businesses do not start off with a bang. They grow gradually. In fact, sales after “lift off” may grow sideways for some time. Then, at some point, they start to move up – sometimes with a strong thrust upward.
There may be some minor ups and downs along the way up – but in the growth stage, sales are in a strong, general upward trend. Then, a leveling-off starts to set in. As more assets are put into place, as more liabilities are taken on to finance the assets, strong sales growth may still be there but at a lesser pace.
So, you have a visual timeline where sales are beginning and even increasing albeit sort of sideways; then you have an upward thrust and then a leveling-off. This visual timeline of sales growth roughly forms the letter “S”.
For many companies, as sales start to level off, profits and margins may continue to expand if a company can grapple with costs.
All of this is normal.
Freight brokers may first want to record and monitor how many loads they are getting. I tell my clients to grab whatever comes their way – Just get loads.
As time goes on, however, brokers want to record and monitor their profit margins.
Margins should be followed for each load, for each shipper and for different time periods – monthly, quarterly, etc. And, margins may be the primary factor when choosing to focus on customer acquisition.
Why work with a shipper that is paying such a lousy rate that you, as a broker, may have trouble offering competitive rates to your carriers while keeping your margin goals in place?
So, you weed out the poorer paying shippers and go with those where you can make a buck.(But there are other factors to consider when selecting a shipper to work with. These other factors are detailed in our comprehensive training.)
For the overall load activity, freight brokers may want to calculate their average dollar profit and profit margin. This information is used to make projections.
You may want to know how many loads you can expect to do over the next several years. You may want to know what your average dollar profit is projected to be over the next several years. You may want to know if there are any potential cash shortfalls over the next 3, 6, 12 or 24 months. So you have to know your projected revenues and costs.
Does any of this make sense to you?
Successful brokers record and monitor all load and financial activity. And, guess what? You do not have to reinvent the wheel.
In my training whether it be live in El Paso, Texas or over the telephone and Internet or with the Home Study, you are provided handouts and spreadsheets ready to go.
I go over each handout with you in training.You’re going to save boo koo number of hours.
Further, you don’t need expensive software.
Regardless of where you fall in your business cycle whether it’s starting out, on an uptrend or starting to level out, you’ll need to know your numbers. And I’ve got the ready-made tools for you.
Go here for a short video overview on the handouts:
Then call me with questions! 1-888-526-ATEX (2839).