In this post, you’ll find a variety of tips and resources from various authors on starting a towing business, offering you a broad overview of the towing industry.
You’ll use these resources to decide if you want to start a towing business and you will use them later on if you decide to move forward.
Before you get to the resource section, there are a few issues to consider about getting into this kind of business.
A Broad Overview
As a tow truck driver, you’ll be helping motorists that need their vehicles towed. In many cases, you’ll get calls to change a flat tire, unlock doors because keys were left in the vehicle, or if someone ran out of gas.
Keeping up with the calls can be a stressful job, especially when you’re behind. You could be on one call, and another call comes in, and another, and so on.
If you’re on your own without any help, you could be on call 24/7, and that’s a tough way to go because you never have any time off. You can’t set your hours. Most towing operations run 24/7, so there is no time off.
At times you’re slow and have no work, and other times you won’t be able to keep up with the calls.
When starting, you might want to try and do everything yourself until you get established. Once your business is fully operational, you will need help to keep up with demand and have 24/7 coverage.
Questions About Your Company
Answering the following questions will help you plan your startup. You don’t need to have all the answers now, but you will need answers before you start.
- Will you be doing all the work yourself during the startup phase, or will you be hiring staff?
- Will you be operating as a home business, or will you need a commercial location?
- What type of towing will you provide? Regular towing for vehicles, or will you focus on heavy rescue.
- How will you finance your business?
- Will you be bringing in partners or investors?
- How will you market your new company?
- What type of customers will you be targeting?
- Will you purchase new or used vehicles?
- Will you purchase one truck or a fleet of trucks?
- Will you provide vehicle storage?
- More in the resources to follow
Are You Passionate About the Towing Business?
The passion you have for your business will affect how successful you’ll be. If you have a passion for towing, then you have the drive needed to succeed. When problems arise, you’ll look for solutions rather than a way out.
If you want to know how passionate you are, consider this. If you had five million dollars in the bank and all your debts paid in full, would you still start this business?
If you answered yes, you’re on the right track, and you are passionate. If you answered no, consider what you would do, and should you focus on doing that instead?
Is There a Demand For Towing In your area
When you’re considering starting this type of business, it’s very important to ensure that there is a demand for your services in the area you’re planning to operate.
If you plan to open in a small town, the demand for your service may not be enough to make you a healthy profit.
On the other hand, if there are many tow truck operators in the area, you may be trying to get into a saturated market. If the market is saturated, it will be difficult for you to get any business in that area.
The competition may be fierce, with truck operators competing for each call.
Your ideal situation is to find an area where there is a demand for towing services, and the market isn’t saturated.
Here’s a tip you can use to get inside information that is useful and comes from someone who’s qualified.
Search for tow truck businesses that are for sale. Find the ones that you can visit and speak with the owners.
Before your visit, make a list of questions you have about the business.
When you meet with the owner, you’ll have a glimpse of what it’s like to operate the company, how profitable it is, what are the biggest challenges of running the business, why they want to sell it. Etc.
You’ll probably get a tour of the business and will be able to meet with any staff that they have.
The benefit of this approach is that you have inside information from someone qualified and experienced in the towing industry.
The second benefit is that you may find it is better to buy an established business instead of starting from scratch. Once you’ve met with the first owner, it’s time to set up another appointment with the second and so on, until you have exhausted your list.
Now you have inside information into this industry and whether it’s better to start your own business or buy one already in operation.
You’re not finished yet. Your next step is to look into getting into a franchise for towing. Like looking at businesses for sale, these meetings will also allow you to ask questions and get an overview of what it’s like running a franchise. You may find that getting into a franchise is a better route to take. Everything set up for you, including your business plan and steps for execution.
After the above meetings, you’ll have enough knowledge to make a better decision then you can at this point.
In the resource section, you’ll find towing businesses for sale and franchise opportunities to start your research.
A Collection of Resources Related to Starting a Towing Business
Considerations Before You Start
In this section, you’ll find tips and resources to help you identify if running a business is the right fit for you—some people like dealing with the products and services but don’t like attending to the business tasks involved.
Have a look at the article below to help you identify if running a business is a good fit.
How to Start a Towing Business
In this section, you’ll find various points of view, for starting your business. Although the articles are similar, you’ll pick up tips and insights you haven’t considered by going through all of them.
Keep in mind these articles are a starting point. You’ll need to expand your research and speak with the right people to get the best information to plan correctly.
Trends and Statistics
In the articles below, you will find tips and insights to give you an overall understanding of the towing industry. You’ll be able to identify trends showing if this industry is on the rise or the decline.
Take a look below for statistics and trends related to the towing industry.
Profitability and Revenue
There is profit to be made in towing. Your profit will depend on how many trucks you operate, how busy you are, and how many calls you can handle per day.
Your profit will depend on your monthly expenses. If you have a large crew size, many trucks, operate out of a commercial building then naturally, your expenses are going to be high.
If you do all or most of the work yourself operate one or two trucks and run the business from your home, your expenses will be much lower, and your profits will be higher.
Your profit will depend on how you set up and operate your business.
Startup and Operating Costs
Your startup cost will depend on how you set up your business. If you run it out of a commercial building, buy brand new trucks, and hire a lot of employees, your monthly costs will be high. On the other hand, if you start from home, and do most of the work yourself your startup and operating cost will be a lot lower. In regards to your monthly operating costs, the majority will fall under fuel, maintenance, insurance, and wages.
Have a look at the articles below for more insights on your monthly expenses.
Here are a few items you’ll need to have for your operation.
- Equipment & Tools
- Clevises & J Hooks
- Hooks & Fittings
- Jump Starters
- Lockout Kits
- Specialty Tools
- Hand tools
- Air Tank
- Snatch Blocks
- Tie-Down Kits
- Vehicle Movers
- Winch Line
- Towing Accessories
- Truck Accessories
- Impact wrenches
- Fuel Containers
- More in the resources Below
When it comes to equipment, your most important piece of equipment you’ll be purchasing is your tow truck. When you’re starting, getting the right size truck that will be able to do the work is important. You want to research the marketplace for a truck that’s suitable for your needs. The last thing you want is a truck with a reputation for breaking down or is expensive to run.
Another issue you want to consider is whether you plan to purchase a brand-new truck or a used one. Naturally, used vehicles have wear and tear. You want to make sure you get something that’s in good shape.
Have a look at the resources below for the equipment you need to consider.
The section focuses on the legalities of setting up your business. You’ll need to set up a company and other permits required to operate a tow truck on public roads.
You’ll need to contact your local state/province and municipality to see what laws and regulations are in place for your area.
You can find more information by typing “tow truck business license” + your city or state in your favorite search engine.
Have a look at the resources below for insights on licensing.
Make sure you have more than enough insurance coverage for your tow trucks, employees, customers, and the vehicles you are towing.
Take your time and speak with a broker that specializes in insurance policies for tow truck operators.
This type of business has high-risk for mishaps; you could damage a car as you’re pulling it from a ditch. You’re always on the road with drivers that are careless around tow trucks and accident scenes.
Take some time to go through the resources provided below for a thorough understanding of insurance for the towing industry.
Once your company is established, and you start to get busy, you will want to hire staff to help you deal with the workload.
I would say you’re most challenging task is to find good reliable drivers.
Tow truck operation is not a job many people like doing—your working outside, usually in harsh weather conditions.
You’re dealing with issues, like vehicles stuck in a ditch, or a muddy field, you may even need to recover vehicles from rivers, lakes, and ponds. Your employee will need to get in there to hook a chain to the vehicle.
Employees could be working in the dark where it’s difficult to see, and they will be attending many accident scenes. Therefore, you’ll need to make the position attractive to hire and retain employees you can build a team around.
Financing Your Startup
The startup cost for this type of business is high, especially if you’re looking to purchase an established business or purchase a fleet of trucks and operate a storage facility. Even if you’re a small operation, you may need a wrecker, a flatbed, and a pickup just for lockouts. Any way you look at it, you have a high startup cost.
See the resources below for tips and insights for financing your startup.
Keep in mind; if you’re purchasing your equipment from a dealer, they may have financing options available.
Business Name Ideas
In this section, you’ll find tips and name generators to spark your creativity.
You want to find a name that appeals to you and something relevant to your operation. The name you choose today is the name you’ll use for years to come, so take your time and don’t rush it.
You’ll also want to find a name that you can register along with the domain that matches.