A Quick Overview of Starting, Owning and Operation A Towing Business
There are two types of towing companies: consent towing and non-consent towing.
Consent towing means that you’ll be towing cars from highways to repair shops.
Non-consent towing means that you’ll be towing cars that are parked where they shouldn’t be, or cars that have too many unpaid parking tickets. In that case, you’ll be working for business owners and the police instead of individual car owners.
Only certain types of trucks have the capacity to tow these vehicles and not many people have these vehicles. Having one of these trucks is the first step.
If you decide that you want to get started, you will want to talk to both local car dealerships and mechanics to begin building relationships with them so that they will use you for their towing needs.
- Good driving skills
- Ability to operate a tow truck
- Truck maintenance is a plus
- Mechanical knowledge is plus
- Basic mechanical skills, like changing tires, boosting batteries is a must
- The ability to successfully use an automotive lockout kit
- Know the area(s)
- List of Common Business Skills
Employee and Job Consideration During The Start-Up Phase or In The Future:
- Common staff positions needed to run some businesses
Approximate Daily Hours Needed:
Most Towing services operate 24/7
Equipment, Supplies, & Services During Start-up OR In The Future:
- Fully equipped tow with accessories
- Amber strobe lights
- Traffic cones
- Battery Booster
- Booster cables
- Lockout kit
- Portable Air Compressor or Air tank
- 5 Gallon Fuel Tanks
- Tire service tools
- Snowsuit for winter
- Fishing Waders – so if you have a ditch full of water and you need to pull a vehicle out
- Essential Office Equipment
Monthly Expenses and Operating Costs To Consider:
- Answering service
- Cell Phone
- Repairs and Maintenance
You will need licenses to be allowed to drive a tow truck, as well as special liability insurance to cover anything that might happen.
Approximate Minimum Startup Cost:
Bare essential – This can cost anywhere from $150,000 to $2,000,000 depending on the area where you want to start. Permits and licenses can cost very different amounts based on how urban the area is. This will also vary based on the truck(s) that you can find to work with.
Tips and Considerations:
- Operators are advised to come up with easy-to-remember names and phone numbers so people can easily recall their company when they need vehicle towing services.
- It is always better to focus on your niche, as the market has grown very big and it will be tough to compete with others when you are just starting and don’t have a specialized service.
- You need to be patient in securing a tow truck business license because obtaining a towing license can be difficult. Towing licenses are strictly regulated.
- You’ll need to learn how to use lockout tools for people that lock themselves out for their cars.
- Some operators work privately with individual businesses and property owners instead of with the public. In this capacity, they may not have to get a license, however, they may also have more difficulty getting the necessary liability insurance.
- You may consider joining a franchise instead of operating completely independently. As part of a franchise, you will receive assistance with developing and advertising your business, which may give you a jump-start on building clientele.
- You only need one person to run this operation. This means, however, that you will have to be the person to go out on every job. Having an extra person to help you can allow you to have an occasional night off and provide service while you are sick.
- Most of your expenses will fall under maintenance, repair, the cost of fuel and communications, The rest is pure profit. Although do keep in mind every few years you will need to buy new trucks. Saving up for the occasion will keep you in business, not doing so can put you out of business.
Pros and Cons:
- Profitable if you keep your equipment maintained up and have enough work, and keep overhead low
- High demand even in a bad economy
- If you can get an AAA contract, you’ll have a stable flow of income. Even though AAA contracts are not that profitable
- You can add vehicle storage for extra income
- You may have to deal with angry people whose vehicles are being towed
- You could be called at all hours of the night to deal with vehicles that need to be towed and it can happen in any sorts of weather, making the work harder and less pleasant
- Accident calls take time and expertise. When there is an accident you have to work fast to get the road open again
- It’s hard to find drivers who will stay on because of the hours
- AAA contracts keep you very busy but the profit margin is low
- You will be susceptible to all types of weather
- You may have to pull vehicles from the ditch’s is very cold weather
- If you damage a car when towing you are responsible
- The hours are 24/7
- Insurance is expensive
Type of Customers:
Local garages, The police department, repo men, and anyone else with a vehicle is a potential customer
Revenue and Statistics:
See Valuation Resources for the most current information.
Towing and Recovery Association of America, Inc.
View This Page At http://traaonline.com
Towing Business Plans
Sample Truck Operator Business Plan Template PDF
A Sample Tow Truck Business Plan Template | ProfitableVenture
View This Page At http://profitableventure.com
Truck Accessories, Towing Equipment and Cargo Control: Truck n Tow .com
View This Page At http://truckntow.com
Towing Equipment Direct | Towing Equipment | Towing Supplies | Towing
View This Page At http://towingequipmentdirect.com
New & Used Heavy Duty & Medium Duty Tow Trucks & Wreckers | Lynch Truck Center
View This Page At http://lynchtruckcenter.com
Jerr-Dan | Tow Trucks, Wreckers & Carriers
View This Page At http://jerrdan.com
Wrecker Tow Trucks For Sale
View This Page At http://commercialtrucktrader.com
Miller Industries Towing Equipment Inc.
View This Page At http://millerind.com
Tow Times Magazine
View This Page At http://towtimes.com
Home | Towing & Equipment Magazines
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