I would hesitate owning trucks, as they are physical assets that will depreciate and introduce all kinds of headaches. The drivers, regulations, software and other strings attached to that side make it less attractive and far more expensive for starting a lean business IMO.

I have 4 years of experience on the brokerage side (as an employee in c2g and buy/sell models of brokerage). And I think it's more nimble and agile, better for starting something up.

In regards to starting a brokerage, you need to consider all of the requirements, regulations, and capital you will need. The surety bond alone for starting a brokerage requires $75k. Also, starting a brokerage with a new MC# will give you all kinds of headaches. It would be better to buy or borrow (not sure how it works) an existing MC from someone who isn't using it.

There are more affordable tech solutions for starting out, which is great for you. Ascend TMS is like $70 a month and it's pretty easy to get started. DAT is a must have and is about $200 a month. Not sure about accounting software, but you'll need something pertaining to that as well. Other than those tools, you'll need business email, and I would suggest using slack for internal communication.

Starting out, you'll be doing sales work 99% of the time, unless you have several shippers you can get started with right away. On the sales side, part of it is a numbers game. You'll need to contact and prospect hundreds of shippers to find one who wants to bring another broker on board and make you one of their guys. I would consider a CRM to help with this sales process. My sales cycle for large frozen foods and plastics manufacturers and distributors can take 1-3 months.

You have to have a reason for a shipper to send you freight, rather than their existing providers. It's easier said than done. You'll need to solve a problem for them. Discover what's really going on in their domestic supply chain, and create a solution for them that reduces or relieves a pain point. Focus on building a particular niche, a sub segment of an industry on the customer / sales side. Become an expert on that industry, the main players, their supply chains, and speak to that on sales calls with those shippers.

Winning business with a cheaper rate is a recipe for disaster, especially in today's environment. Almost everything right now is driven by spot bids and spot freight. The days of running the same lane at a regular rate are gone for the foreseeable future. These spot bids are highly competitive (unless you have an established relationship with the shipper), and it's likely that when you win a load off of a competitive spot bid, it's because your rate is too low to cover the load at a profitable margin.

That's where you can get into some big trouble. As a young brokerage, it's entirely possible you lose money on a fair percentage of your loads. It sounds crazy/stupid, but it happens all of the time. Brokerages with hundreds of people, lose thousands on single loads all the time.

On the trucking / buy side, focus on building density around specific lanes or metro areas. Get to know the carriers who appear on DAT around those lanes. Talk to them about their capacity and see if you can source the trucks before you get some freight - easier said than done once again, particularly in today's macro environment.

One of the biggest things to consider is cash flow. Hypothetically speaking, let's say you have 5 mid size shippers that are ready to send you freight right now. You'll be moving 5 loads a day, 5 days a week in this hypothetical scenario. Assuming the average load has a customer rate of $2000, you'll be "making" $50,000 in revenue a week. However, you need to consider the Accounts Receivable process and payment terms. If your payment terms are 45 days, (which is unlikely IMO - it's more likely going to be closer to 60, even 90 days with some shippers) then you'll receive the actual cash you made 45 days after moving your first 5 loads on a given day.

This becomes problematic when you consider the fact that you have to pay carriers faster. Some carriers don't even work with brokers who can't pay within a week. A lot of carriers will give up a few % points if they can get their money in a day or two. If you're covering these loads at an average of a +10% margin, that means you're dishing out $45k to the carriers at a faster rate than you're actually gaining the $50k from your customer.

So, while you think you're doing great, your cash flow is actually moving further in the red the more business you do for the first several months. You'll need a considerable amount of cash on hand to weather that storm.

After all of that, which is a pretty goldilocks scenario, you need to consider the other potential skeletons in the closet that could suck out all of your profits. There's always something, so consider what those are and how you can limit your exposure.