Transportation & Logistics · Buyer guide
Buying a Freight Brokerage business
Published · Reviewed by The Diligence Standard Team · Updated
a Freight Brokerage can look attractive on a summary P&L while the operating details underneath it change the cash flow, transferability and capital a buyer will actually own. Diligence should connect the reported earnings to the business-specific drivers that create them.
How the business works
Customer concentration, gross margin per load, carrier depth, sales ownership and credit/claims determine value; revenue alone can be misleading.
Risks to test
- Owner/customer-rep relationships
- Low-quality gross margin
- Customer churn after rep departures
- Claims/bad debt
- Carrier fraud/compliance
- Working-capital needs
Evidence to request and reconcile
- Load-level margin history
- Customer/revenue cohorts
- Sales rep production
- Carrier database/compliance
- AR aging
- Claims/bad debt
Decision questions
- Who owns the top customer relationships?
- How much margin follows individual reps?
- What is customer retention by cohort?
- How clean is AR?
- What carrier fraud controls exist?