How to Start a Towing Business

Image of a car being towed

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.

Skill Set:

  • 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:

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
  • Flatbed
  • Amber strobe lights
  • Floodlights
  • Flares
  • Traffic cones
  • Jacks
  • Battery Booster
  • GPS
  • Booster cables
  • Lockout kit
  • Portable Air Compressor or Air tank
  • 5 Gallon Fuel Tanks
  • Tire service tools
  • Overalls
  • 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:

Fuel

Answering service

Cell Phone

Repairs and Maintenance

List of common business skills

Licenses:

You will need licenses to be allowed to drive a tow truck, as well as special liability insurance to cover anything that might happen.

See Our Page on Licenses and Permits

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 use lockout tools for people that lock themselves out for their car.
  • 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:

The Pros:

  • 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

The Cons:

  • 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.

Resources

Towing Associations

Towing and Recovery Association of America, Inc.

View This Page At http://traaonline.com

Towing Business Plans

Sample Truck Operator Business Plan Template PDF

View This Page At http://practicalbusinessideas.com

A Sample Tow Truck Business Plan Template | ProfitableVenture

View This Page At http://profitableventure.com

Towing Equipment

Towing Equipment – Tow Accessories | AW Direct

View This Page At http://awdirect.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

Tow Trucks

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

Towing Publications

Tow Times Magazine

View This Page At http://towtimes.com

Home | Towing & Equipment Magazines

View This Page At http://towequip.com

Tow Industry Week – Front Page

See http://towindustryweek.com

Tow Times

View This Page At http://awdirect.com

The Latest About Starting A Tow Truck Business

Google Searches Related To Starting A Tow Truck Business

Latest Searches For Starting A Tow Truck Business

Starting A Tow Truck Business In The News

Latest News About Starting A Tow Truck Business

Books About Starting A Tow Truck Business

Amazon

Books Related To Starting A Tow Truck Business

Social Related To Starting A Tow Truck Business

What’s on Twitter Related To Starting A Tow Truck Business

Tweets Related To Starting A Tow Truck Business

YouTube Videos Related To Starting A Tow Truck Business

Videos Related To Starting A Tow Truck Business