How To Start A Towing Business – Background Info

How To Start A Towing Business

 

How To Start A Towing Business – Background Info:

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 this 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.

This is where starting a

towing business can profit  you.

If you decide that you  want to get involved in

the towing business,

you will want to determine how  much the

permits and licensing will

cost for your area.

If you will be able to afford it, you will

want to apply for those permits

and then talk to both local car dealerships and

mechanics to begin

building relationships with them so that they will

use you  for their towing

needs.

After you have  the permits, a tow truck, and the

licensing to allow you to

drive the truck,  you can start your towing business.

 

 

How To Start A Towing Business –

Tasks And Skills Needed:

Business Specific Tasks:

If you are planning to do all the business tasks or hiring or subcontracting

tasks, here’s a list of tasks that need to be attended to when it comes to

the business side of running a towing business:

  • Recordkeeping
  • Customer Service
  • Billing
  • Industry Specific Tasks
  • Same as above if you plan to do everything yourself or get help,
  •  here are some of the tasks necessary to operate a towing business:
    • Tow vehicles from illegal parking zones and areas
    • Tow broken-down vehicles to garage or mechanic
    • Tow vehicles from accidents

    How To Start A Towing Business -

     Approximate Daily Hours Needed:

    General Hours of  Operation:  -

     When your business is open – You will need to be

    available  around the clock for any emergencies which may come up.

    This will allow you to always take business  and to keep both

    your customers and your partners happy.

    Hours Needed to Prepare  – Before 

    Opening and After Hours Activities – Make a

    ny necessary repairs to tow truck, make s

    ure tow truck is fueled, work on marketing and promotion

    of your tow truck business.

    Number of Employees Needed To  Run This Business:

    Minimum  Number of Employees -During the Start Up Phase: You can start this business yourself on a full-time basis.

     

    Number of Employees  – Once Your Business is Up and Running Successfully:

    • Website maintenance
    • Record/Bookkeeping
    • General office
    • Customer Service
    • You only need one  person to run a successful
    •  towing business.   This means, however, that you
    •  will have to be the only person to always  go out on
    •  a job.  Having an extra person  to help you can be useful
    • sometimes because this will allow you to have an  occasional
    • night off and will provide service for you while you are sick.

    Skill Requirements for This Business:

    • Good driving record
    • Ability to operate a tow truck
    • Know the area(s)
    • Log time, distance, and fuel used
    • Bond (amount varies by state)
    • List of all drivers who may use the tow truck
    • Insurance for bodily injury, property damage and vehicle damage
    • Inspection of all facilities and equipment
    • Proof of good driving record
    • Criminal background check
    • Drug test results
    • Worker’s compensation (for any employees you have)

    Licenses:

    You will need licensing  to be allowed to drive a tow truck

    as well as special liability insurance to  cover anything which

    may happen.

    You  will also need to purchase permits which allow you to

    operate your towing truck  within certain limits of certain areas.

    Approximate Minimum Start up  Cost:

    Bare  essential: – This can cost anywhere  from $50,000 to $200,000

    depending on the area that you want to start a towing  business in.

    Permits and licenses can  cost very different amounts based on how

    urban the area you are starting in  is.  This will also vary based on the

    truck that you can find to work with.

    Minimal  exposure – There are several ways to advertise for free.

    You can post ads in local newspapers so people can read and know

    about   you. It is also a good idea to contact companies that might

    need towing   businesses to service them when they need to tow

    illegally parked cars   in their vicinity.

    Necessary Equipment to Run this Business:

    Necessary  Start-Up Equipment & Supplies:

    • Computer
    • Printer
    • Cell phone
    • Website
    • Tow truck
    • Amber strobe lights
    • Floodlights
    • Roadside assistance equipment
    • Flares
    • Traffic cones

    Supplementary  Equipment: – Equipment or helpful products

    that you can acquire to once your business is  off and running:

    • You may want to carry a  number of tools which can help
    •  any minor repairs that you may come across.  Additional
    •  things like extra chains, cables,  and oil may also come in handy.
    • GPS

    Monthly Expenses To Consider:

    • Wages
    • Phone/cell phone
    • Internet access
    • Permits
    • Advertising/Marketing
    • Electricity
    • Water

    Special Requirements and Considerations For This  Business:

    • Find out all you can about the trends in the industry.
    •  Know   your
    •  competition, in particular, their strengths and weaknesses.
    •  This
    • will help you identify your competitive advantage.
    •  In other words,
    •  this   will help you figure out what you can give your
    •  customers th
    • at they’re   not getting from the other businesses.
    •  And keep from e
    • mulating the   competition’s strategy. Instead,
    •  make the most of your
    • own advantage   points.
    • Towing business operators are also advised to come
    •  up with easy to
    • remember names and phone numbers so people can
    • easily recall their
    •  company when vehicle towing services are needed.
    • It is always better to focus on a small part of 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 h
    • ave a specialized service.
    • You will need a license to operate a towing company.
    •  Remember however
    •  that you need to be patient in securing
    • a towing truck business license
    • because obtaining a towing license can
    • prove to be difficult. This is   because
    • towing licenses are strictly regulated. People
    • who are planning to invest in a
    •  tow truck business must a
    • lso have at least $10,000 for a towing busines
    • s start up
    • capital. The starting capital for a towing compa
    • ny however can vary   depending on your location
    • and the type of operation you intend to have.   In urbanized areas for
    •  example, you might need around $200,000 if you   are going to purchase
    •  a tow truck and a towing license.
    • Some tow truck 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.
    • When learning how to start a towing business, you may consider joining a
    •  towing business 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.

    Pros And Cons of Opening  A Towing Business:

    The  Pros of Running a Towing Business:

    • The work is easy as you  only need to
    •  hook the car up to
    •  y
    • our truck and drive away with it.
    • The Towing Business is profitable
    • The towing business is in Demand
    • If you can get a AAA contract, then
    • you’ll have a stable flow of income.

    The  Cons of Running a Towing Business:

    • You may have to deal  with angry people who’s
    •  vehicles are being towed.
    • You could be called at all hours of the night  to deal with vehicles
    •  that need towed and it can happen in any sorts of  weather,
    •  making the work harder and more miserable.
    • 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 that will stay on because of the hours
    • Its hard working in cold weather
    • You’ll need to learn how use a lockout tools for
    •  people that lock themselves out for their car
    • You’re on cal 24/7

    Type of Customers You Need to Attract:

    Look for agencies that enforce parking that

    request the towing of vehicles for illegal parking

    as well as customers who need their vehicle

    towed to a local garage or mechanic.

    Towing Business Statistics:

    See Valuation Resources for the most current information.

    Revenue:

    See Valuation Resources for the most current information.

  • Towing Business Resources:

    Towing Associations: These websites are a

    collection of associations that  serve both

    towing companies and consumers.   Complete

    benefit information can be found at each site.

    Towing Companies: These websites are useful tools not only for finding a tow truck company  when needed, but also for generatin

    g new customers through internet marketing.

    Towing Business Plans: These web pages

    provide  entrepreneurs with access to aff

    ordable pre-written tow truck business plans  designed to get their

    dreams rolling.

    Training For The Towing Business: These websites

    and pages  describe educational opportunities available for those

    working in the towing  industry.  Some resources are available  online.

    Towing Publication and Articles: These websites and pages

    focus on providing readers with quality information that covers a

    wide range of  topics concerning the towing industry.

    Towing Forums: Each of these forums provide  registered users

    with the chance to learn from others in the towing industry

    ,  ask questions, and give advice.

    Towing Software: Towing business software options are presented

    on these websites.  Readers will learn all they need to know in  order

    to make an informed software decision.

    Towing Forms: Every tow truck company has to have invoices, receip

    t books, and other  customized forms to operate.

    These sites  are a great resource for towing forms.

    Towing Equipment: Tow companies can now save

    time by ordering supplies over the internet.

    Replacement parts, safety equipment, and

    other essentials are all  available online.

    Tow Trucks For Sale: Finding the right

    equipment is essential to running a successful business.

    These sites provide users with access to

    vehicle info and purchasing options.

    Businesses To Related to a Towing Business:

    • Auto repair
    • Auto recovery
    • Moving and storage

    See Also:

    Starting A Business Checklist: This section helps

    you cover all bases when you are getting

    in to your own business.

     

    More Business Ideas:

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