Hiring An Agent Or Growing Solo | Final Mile 130

All right, welcome back for another edition of the final mile. This is all QA, all from you guys. We got three questions today that we'll get to that came from um Facebook and our YouTube comments, etc. Uh, if you're brand new, check out all the other content, share us with your friends, sign up for the newsletter, do all the good stuff. Just go to freight360.net or um you know you could check out um our YouTube channel in full detail for all of our stuff there. Um leave reviews, comments, all the good stuff there, and uh check out the Freight Broker Basics course. If you're looking for some training options, we'll get right into our questions today. Um, I've been a freight broker since 2021. I move about 450 to 500 loads per year. I run everything myself, and I don't feel busy enough yet to justify hiring an employee. Was thinking about bringing an agent on with a book of business to increase the revenue first and then hiring support staff. What's your advice on this? So this could go a lot of a lot of different ways, but the first thing that comes to my mind is when when people talk about bringing on an agent that has a book of business, there is or even if just gonna hire, if you're gonna hire an employee that has a book of business, right? Um, you now have a new responsibility or job description. And I guess the good thing here is that this person identified that they have available time. So they're not totally bogged on, they've got some free time, but you basically become a um you've got to manage that person and you've got to manage, you know, the reputation of your company and what having some. There's one other thing.

The other thing I too I want to interject in there is like, so you have time, but rather than you prospecting shippers, you're now gonna prospect employees or agents, which is a sales funnel and its own job. You're gonna talk to more of them that won't work out than do. And now you're just gonna be selling a different type of sale to convince someone with a book of business that your business is the one they should leave theirs to come to, right? Yeah. And to your point, you're also now a manager. And third of all, you now have to be able to manage the risk that somebody else brings into this situation.

Yep. Yeah, exactly. So there's nothing wrong with going that route, but I would um so here's here's like what I usually say is like if someone comes to you and or like let's say someone refers like, hey, you should talk to my buddy, he's you know, he's a broker, he think he'd be great to, you know, he's looking for something new. You know, if you get a referral or someone comes to you, um, that's one thing. But like to your point, if you aren't, if you're if you have free time still and you're still have room to grow, you should very likely focus on what has been successful for you in the past, then just totally pivoting to a new on a new uh business model. Um, so I agree with you on that point. Uh what I'll also say is when you bring an agent in, because this guy said, I don't have a need for an employee yet. So, like outside of you know the sales and the operations stuff, like this guy's doing the billing, he's managing the the books, like all that stuff. When you bring in an agent or anybody for that matter, that's going to be running their own book of business, whether it's an employee or a 1099, um, you have to do all the stuff for you and then for them. So you got to make sure that if you all of a sudden bring this person in, depending on how much business they have, you might not be in a position where you can handle all the extra responsibility before you've got help with you know a part-time employee or you know, outsourced help or whatever the case might be. So um I think it just depends on the situation. I usually caution people that like the the agent model, and I like I say this from experience because that's I I've that's just we have agents at at Pierce where I work. It is a job in and of itself for somebody to manage, you know, a pool of agents for that matter. So just be prepared and know what you're getting, you know, know what you're getting into and what that means. And but yeah, I mean it's it's possible. But I I would probably recommend just focus on what you've already been doing. Like you you've already got customers, you're already moving freight. Um, I would personally try to grow that. Um, you know, if it's just you by yourself before you bring somebody else in like that.

So it's it's the fertilizer in the grass on the other side of the fence, right? Like calling cold calling shippers is something I'd would rather not do anymore. So it seems like it's easier to bring on agents, is usually where people are when they decide this. Like the I would pose a question to this person and say, I would really think and sit on why you want to do this as opposed to bringing in more business the way you've been successful. Like, what is the motivation? Because if it's avoiding doing the thing you don't want to do and you think it's easier, that's probably not the right one. If it's because you ultimately always wanted an agency program and you're really interested and excited about doing that, then it might be the right one. You really want to think about the motivations. Are you avoiding something you don't want to do, or are you actually going towards something you want to do?

I was gonna say that's like one of the best tips is like if you're gonna do something new, it's hopefully you're going towards something that you want to do and not away from something you're you that you don't want to do. So good point. All right. Next question. Uh question for brokers. In what circumstance would you work with a brand new carrier? For example, under 90 days of authority? Um, I'll tell you personally how I handle it is I you I've pretty much since I've started in brokerage, like the one year of authority was kind of like the overall benchmark, and like it's fluctuated. I remember at one point we dropped it to like six or 180 days and then 60 days or something like that. Uh, or not 60, 90 days. Um, but I look at like the bigger picture, like just because somebody has had their authority for 20 years doesn't mean it it just wasn't sold two weeks ago, right? And just because someone has their authority for two weeks doesn't mean they haven't been a safe driver working for another company for 20 years before that. So I usually look at the bigger picture. Um by default, like if you know, if if if it's just straight up they're a new carrier um and it wasn't like it was just sold or they worked somewhere else before, if it's a new driver, I'm usually gonna only look at that newer carrier if um the other better options aren't there. Like I'm gonna always take the best available option that I've got. So if I've got if I've got what I would consider are two equal um options as far as like they have the right equipment type, their safety looks the same, the price is the same, but one of them has a track record of you know 12 years, and the other guy just started his business a month ago. I'm gonna go with the guy that has been doing it for 12 years that I've loaded before. Like that's just the reality. But like a lot of times, and we see it with our our brokers and agents at Pierce is like when we're going to approve a new authority or a younger authority that's under that like general threshold that we have, it's usually because it's like a Fallout Friday situation or a customer that we're really trying to take care of. And we're gonna take some extra steps to make sure that this carrier, you know, beyond just the young authority, we're gonna look at everything else too. Like, is there anything else that would give us, you know, reason to take extra caution with them? Or do they just have a newer authority? But they've been doing a good job ever since they started. So everyone's got to start somewhere. Um, it's the reality of it. And usually if you're a newer broker, you don't get to be that picky. Like you're gonna have to work with the the less desirable um trucks because that's that's just the nature of the business of if as you're getting yourself off the ground. So any thoughts on the the newer authority piece?

I mean, it's the same thing you said. Like, I want to know contacts, conversations with the carrier or driver. Hey, what made you start this business? How long have you been doing this? Right. Like I'm trying to see if they're in each of the buckets you pointed out. Like, oh, it's a guy who's been a 25-year veteran driving a truck, but wanted to go stake his own and he's looking for somebody to help him out. Because those are some of the best scenarios for newer brokers, right? Like we've got a client right now that uses a lot of brokers, a lot of carriers less than a year, less than six months, but they're local, they've been driving a long time, and their lanes match up really well with their customers. So, like they've been great fits, they've got better rates, they have more reliable drivers. Like, you absolutely can find the diamonds in the rough. But to your point, like, I'm just going to look a little deeper, right? Look at the insurance, verify all these things, ask more questions, really go through this process. And it's the same thing we talked about in the podcast, which is like, I want relationships with my carriers in the same way I do with my customers for the same reason. So I'm going to get to know them, ask them a little bit more about their business, get to know them personally, try to get a feel for what it would be like to work with this driver or carrier, right? And if I can get to that comfort level, then like I'm absolutely going to do this. I'm going to, what's the old thing, belt and suspender it? There's going to be tracking on everything. I'm going to want to check at pickup and delivery just to make sure everything is good. But it's like trust but verify. I don't think you should just avoid them at all costs because you're probably losing some capacity that is a really good fit for what you're doing.

Yep. Agreed. Agreed. Um, when you can get to a point in your career where you can be super picky, that's great. But the reality is when you're new, you're going to deal with a lot of uh a lot of hurdles. So um, which actually brings us to our next question. For a brokerage just getting started, what is the best advice for building credit? I'm having some pushback from carriers due to no credit rating yet. Um I think there's kind of like two sides to this. And one is like I'll give you like the short answers and then kind of break it down. So like I I feel like the best, the most common way that this happens is like you end up quick paying a lot of carriers. Like the first like the first six months can be really an uphill battle. Like quick paying carriers all up front. How do you do that? The other side, you're gonna have to find a good factoring company. Um, and actually, uh highly recommend if you guys aren't familiar with Operfy, check them out. We got a link down in our show notes or description box. Um, this is a company that we've built a relationship, a relationship with over the years that um they specialize in the brand new broker. Like when you've got companies that won't talk to you because you haven't been in business long enough or your receivables aren't high enough on a monthly level, that's where a good company like Operfy will help you out, um, help factor and fund your business and get those quick pays done so you can get that credit rating built up. Because ultimately, and we've broken it down, like you have the DAT um like methodology of you gotta have like two payments per month for three consecutive months and then on or four consecutive months, and then on the fifth month, um, you know, and the first partial month doesn't count like the then that next month you'll have a credit rating. Like it is crazy and nasty. But if you if you if you align yourself with a good factoring company that can help you make those quick prompt payments, they also they're in the finance space, they know what's gonna affect credit. And it's you want to also make sure you're working with carriers that either have a factoring company themselves that's gonna report on you, or that you're working with carriers directly that are going to report on you. Because if you don't if you can do 100 loads in a month, and if no one reports on you, it's no good. Doesn't matter. So, any um, I guess what would you sprinkle on top of that as far as getting that credit built up?

I mean, you covered a lot of it. I mean, we're gonna have more credit training in our course. Operify is really good with helping you establish and developing credit, right? But just some like short tips or like it's the answer to the question before. Like working with newer, newer carriers, they're more likely to be flexible and work with you, right? So that's one area to look at. The second is anytime you can go to a carrier and get them what they need and work the transaction from the other end is also helpful, right? One of the things I'll do with newer brokers, I'm like, if you can talk to some local carriers and your shippers or your prospects are sending you the same lanes every week, right? Start reaching out to carriers and going, like, hey, my shippers tend to have these lanes every week. Would these be a fit for you? Tell them, hey, we're new, we might not have our credit approved, but we do have a factoring option or we can quick pay you, we can help with that. But do these lanes work? And if you get a yes or a no, even if it's a no, I'm like, well, hey, where do you need some lanes? Do you have any shippers you would like to work with that are a fit for you? They give you a list of prospects. Then I go back upstream and go and call those shippers on behalf of that carrier. Because if I can get them their business and ideally a dedicated lane every week that I can give to that carrier, that gets me one load every week to build my credit. All I gotta do is that one time, if I can get one dedicated lane every week for one carrier, in four to five months, I'll have credit. And then I just do that over and over again, right? Spend a little more time on the carrier side than the shipper side. But if you do that, it will literally give you leads to call. They'll give you information on that shipper a lot of times, who works there, who's at the dock, what they like, what they don't like. You could get a whole host of like really good information that will help you close a shipper even faster if you start on the carrier side with somebody that's willing to work with you and you go get them what they need.

Yep. Good point. Good questions. Keep them coming our way, and we'll keep answering them. Final thoughts.

Whether you believe you can or believe you can't, you're right.

And until next time, go bills.