To start a towing business, you need to be committed 100%. It’s a 24/7 job. You don’t get to go to the movie and relax because every time your phone lights up it could be a potential job you don’t want to miss.
Before you start your own towing business, you need to know if it’s worth it for you.
The average income of a tow truck owner is around $40.000 annually. This depends on the area you live in, the competition and your rates.
So let’s take an example. If you charge an average price for a job $60, and you your advertising and marketing campaign are good and you are getting at leat jobs a day, at the end of the day you will end up making $600 / day,
Some days may be less some days may be more. By the end of the month, you could do $13.200 working 22 days / month.Now let’s talk about expenses. Assuming you are running your business from home and you don’t need to pay for rent, we will skip the expenses with rent, trash, water, electricity. What’s left are the monthly payments for your truck if you choosed to finance a new truck, fuel, insurance, repair bills, advertising, phone bill, damages you may have to pay if you damage your clients car and other miscellaneous expenses.. this could end up to be between $4.000 and $6.000 per month if you don’t have any unplanned expenses.
Let’s not forget about licenses, taxes and dues you will have to pay annually.
You can start a towing business pretty easy. All you need is proper licensing and a tow truck.
You will also need a reasonable amount of money or credit cards available to cover the cost of starting this business. Even if the cost of starting a wrecker business is huge because you need to buy the truck, have proper insurance and paperwork done before you can start working, the return of your investment is guaranteed
Is it profitable? For sure is! Accidents happen all the time, cars broke down every day. Not all the repair shops maintain tow trucks as a part of their repair business so a towing business is a must in every city big or small.
How to start?
First of all, you have to find out what are the requirements of your state and city related to the towing business.In most states you need a commercial driver license to drive a towing truck so you should take care of that first.
After you have your CDL you should file the appropriate papers with your state to create your business entity.
I would suggest you to consider filing for an LLC because this form of entity provides a higher protection for you as a business owner. It protects your assets in case that something goes wrong with your business.
The truck you purchase should be a high-quality tow truck. If you buy a used truck make sure it is inspected and it is in a top running condition. This is absolutely the most important thing in your new business. The truck will be your money maker. If the tow truck will break down too many times you will lose money. . Your whole business depends on this truck so make sure you do your research before you buy one.
There are 3 tow truck types on the market.: hook and chain tow trucks, wheel lift tow trucks, and flatbed tow trucks. The hook and chain tow trucks are barely used anymore because of the high risk of causing damage to the towed vehicle.
There is a big difference between the wheel lift tow truck and the flatbed tow truck.
The flatbed towing wrecker can accommodate severely damaged vehicles while the wheel lift towing truck can tow only cars that don’t have their rear axle damaged and the tires are able to hold air.
The flatbed towing is the safest one, because it can cause the least amount of damage to any vehicle towed the vehicle being securely chained to the bed of the truck and not dragged from behind.
The wheel lift tow trucks are not as safe but they get the job done and they are less expensive then the flatbed tow trucks.
Now that you have your CDL, filled for your business, get the appropriate licenses and bought your truck, it’s important to get a commercial liability insurance policy. This will protect you, your truck and also your clients. The policy should provide at least the minimum coverage required by your state and also be sure it will cover any damage you make to your clients car while you are towing it.
Now you are ready for work. Visit your local auto repair shops and dealerships to offer your service and keep your phone on all the time. Make contact with the local police to get your company on their roster for accident responders.
To get on their list, you will need to have a higher insurance coverage and a quicker response time.
Put your business card on the bulletin board at the auto parts store and the local bars. Advertise online. Get a website, run paid advertising on Google, Yahoo and Bing.
The best chance to get a job fast is having a paid ad up and running as soon as you are ready for work.
The towing business is not one that the customers will shop around for the best rates in case they are stuck on the side of an interstate or involved in an accident. They will probably call the first number that will pop up when they do a google search for the closest towing company in the are. This will probably be a paid advertising so this is your best chance to start working fast even if you will need to make an extra investment.
Don’t waste your time and money advertising in newspapers or yellow pages. Your customers won’t have the time to read newspapers in the middle of the highway but everybody will have a phone to make a google search for the closest towing company, so make sure you have an online presence. An established website will allow to people that are looking for a non-emergency tow to request for your services online.
When it comes to solving the customers problems you need to be the best on doing the job right. This will ensure your long term success.