Thinking of how to start a towing business, you have come to the right place!
Towing business can be a lucrative opportunity, providing essential services to stranded motorists or cars that break down.
In this guide, we will walk you through the required steps to launch your towing business successfully. From researching the market to obtaining the necessary licenses and permits we will equip you with the knowledge and tools required to start your business.
The towing industry is a growing market, so if you enjoy driving and helping people out of tight spots, you can start a towing business, be your own boss, and capture a slice of this market. The key to starting towing business is to obtain the right knowledge and avoid all the usual mistakes.
Start a Towing Business by following these 11 steps:
- Research the industry & know if the business is right for you
- Work on Your Idea
- Decide the Trucking Company Name
- Create a solid business Plan
- Register Your Business
- Register for Taxes
- Fund Your Business
- Apply for a Box Truck Business License and Permits
- Open a Business Bank Account & Credit card
- Get Business Insurance
- Prepare to launch
- Build your team
- Run a towing business & start making money
Step 1: Research the industry & know if the business is right for you
| Key U.S. Towing Industry Statistics | |
| Estimated market size for the US towing industry in 2023 | $10.3 billion (Growth rate of 4.1%) |
| Number of vehicles that are towed daily | 55,000 |
| The average age of a vehicle in the U.S. | 12.1 years |
| Number of registered businesses in the towing industry | 43,816 |
| People employed in the towing industry | 97,871 |
| The average number of employees in the tow truck business | 5 employees |
| The fatality rate in the towing industry | 44 deaths per 100,000 workers |
| The average annual salary of a tow truck driver | $38,555 |
| The national average cost of towing service | $110 (minimum of $60 for local towing) |
| The average tow | Between 10 miles and 40 miles |
| The average age of a tow truck driver | 47 years |
| The most common type of tow truck in North America | Flatbed tow truck |
| Male tow truck drivers | 95.6% |
| Female tow truck drivers | 4.4% |
| Tow truck drivers with a high school diploma | 57% |
| Tow truck drivers with an associate degree | 15% |
| Tow truck drivers with a diploma degree | 14% |
Fast Facts of Towing Business
| Is the Towing Business Meant for You? | |
| Industry Trend | Growing |
| Commitment | Full-time |
| Investment Range | $20,000 – $68,000 |
| Revenue Potential | $60,000 – $90,000 p. a. |
| Profit Potential | $40,000 – $65,000 p. a |
| Time to Build | 1 – 3 months |
Note: This is only an estimation actual numbers may vary depending upon many factors such as the number of vehicles, location, offerings, etc.
Pros & Costs of a Towing Business
Every business comes with its own pros and cons, and the towing business is no exception to this. Before you decide on starting a towing business you should consider all pros and cons.
| Pros | Cons |
| Steady demand for services: Regardless of the economy, people will always need reliable towing services whether it’s due to flat tires, car accidents, or breakdowns. | Significant initial investment: The initial investment can add up as you will require equipment such as tow trucks, flatbed trailers, and dollies. These vehicles and equipment can be expensive to purchase or lease. Other costs include licensing, business insurance, building a website, etc. |
| Potential for high profit: Specialised towing services like heavy-duty towing or long-distance towing can be relatively expensive. You can also provide additional services like vehicle storage, which can provide an additional source of revenue. | Managing a fleet of vehicles and equipment: You need to ensure that your vehicles are safe and reliable, for that make sure you keep up with maintenance, repairs, and upgrades with your equipment such as diesel engines and tow trucks. Managing a fleet of vehicles can be time-consuming and require a significant amount of administrative work. |
| Diverse Services: You can offer diverse services to your clients. Apart from traditional towing services, you can also offer roadside assistance, tire changes, jump starts, and other services. This can increase your revenue and attract more customers. | Licensing and regulatory requirements: Your company must have proper licensing, insurance, and registration with the state or local government. You need to make sure that your business is operating legally. |
| Opportunities for Expansion and Growth: Once your business starts to grow you can add more services, add more locations, or even franchise the business. By offering more services and adding new locations you will reach new markets and increase your customer base, thus increasing your revenue. | Staffing and Training Challenges: Finding employees that are qualified enough to operate tow trucks and other equipment properly can be time-consuming and expensive. You may be required to train them well in the initial period. |
| Fulfilling Work: You will have the satisfaction of helping people during emergencies, such as accidents or breakdowns. Also, as a towing company owner, you will enjoy a sense of purpose for your business and will provide essential services to the community. |
Trends & Challenges of a Towing Business
Trends:
- With the advent of state-of-the-art software, operators can now monitor every aspect of their fleet in real-time. Operators can save valuable time by means of GPS tracking systems which enable them to locate and dispatch the nearest truck to a customer’s location quickly.
- Customers can experience a more seamless experience by using app-based platforms that provide easier options for booking and payment.
- Operators can hook up and tow vehicles with precision and accuracy by using wireless towing cameras.
Challenges:
Competition is increasing day by day, with the rise of ride-sharing services and other roadside assistance providers, towing companies have to find creative ways to stay ahead in the competition.
- For smaller companies the cost of equipment and insurance is quite high.
- Unpredictability of the job makes it difficult and every call presents a unique set of challenges.
- There is always a risk of accidents and injuries
- Bad weather, further adds to the difficulties.
How much does it cost to start a towing business?
Starting a towing business costs between $18,350 and $66,000, averaging about $42,200. The main expense is the tow truck itself. A new tow truck can cost you around $100,000, and the down payment could be $20,000. It is advisable to go for a second-hand truck when you are just starting out, which can cost $25,000. You may have to pay just half the cost upfront.
You will also require a commercial driver’s license (CDL) and Light Duty certification from the Towing and Recovery Association of America. Other costs associated with starting a towing business are as under.
| Cost Type | Cost range | Average |
| Tow Truck | $15,000 – $60,000 | $37,500 |
| Licenses and permits | $500 – $1,000 | $750 |
| Website | $400 – $750 | $575 |
| Marketing and advertising | $800 – $1,500 | $1,175 |
| Insurance | $500 – $1,000 | $750 |
| Software | $100 – $250 | $175 |
| Office equipment | $750 – $1,000 | $875 |
| Miscellaneous | $300 – $500 | $400 |
| Total | $18,350 – $66,000 | $42,200 |
What equipment and tools are required to start a towing business?
The basic equipment and tools that are required to start a towing business are as under. This will again depend on the type of towing you’ll be doing.
- Emergency light bar on top of the truck
- Brooms
- Shovels
- Fire extinguisher
- Signs
- Flares
- Flashlights
- Safety chains
- Pry bar
- Trash can
- Absorbents for oil spills
- Shop rags
- Paper towel
- Communication, 2-way radio or cell phone
- Booster or battery box or jumper cables
- Hydraulic jack
- Tire change equipment
- Rubber mallet
- Lockout tools
- Motorcycle straps
- Sledgehammer
- Tool kit
- Reflective safety attire
How much can you earn from a towing business?
The average towing business owners make anywhere between $30,000 and $100,000 annually. A tow truck charges an average of $120 per tow, this amount may include both a flat fee and a mileage charge. A standard storage fee is charged on a daily basis for vehicles stored on the company’s property. The average storage fee is approximately $20 per day.
- The earning is highly affected both positively and negatively by various factors such as:
- The size of your business,
- Whether you provide 24/7 towing services or not,
- Number of employees.
- The earning also depends on whether you serve as a towing company for local service garages or whether you only wait for calls to come in.
You can diversify your business and increase revenue by offering other services such as emergency roadside assistance. You can include offerings such as emergency fuel deliveries, providing jumpstart and similar services, and changing flat tires among others. Leasing tow trucks is another revenue stream you can consider.
Step 2: Work on Your Idea
Now that you have a fair idea about towing business, it a time to enter the competitive market.
Market research is the first important step at this stage. You must know whom you are going to compete with, how you will differentiate your services from others, what services you will offer t, what services to specialize in, etc. are some of the key points you should consider.
Decide what services to offer
Towing companies aid vehicles when they break down, it can happen anytime such as during a road trip or commute to work, or in a garage. It could be an accident also.
Towing companies generally offer four main types of services as below. Additionally, they can also offer emergency roadside assistance.
- Light-Duty Towing: In this type, a basic tow truck is used to haul motorcycles, passenger cars, and pickup trucks. You should make sure that there could be luxury vehicles also that should be handled with a lot of care. Towing low-profile or custom vehicles can also be a challenge, as the towing service will need to make sure the car’s underside is not damaged during the towing process.
- Medium-Duty Towing: This involves towing larger vehicles such as service vans, box trucks, and larger pickup trucks. This category is for vehicles that are too large and heavy for light-duty towing and not quite heavy or large enough to warrant heavy-duty towing. A stronger tow truck is required here as vehicles would be heavier than typical personal vehicles. You should know which class of truck is needed for the job at hand.
- Heavy-Duty Towing: These towing services are meant for the heaviest vehicles a towing company can handle. The vehicles can be cement trucks, garbage trucks, tractor-trailers, larger commercial vehicles, and even mobile homes. A lot of care and precision are needed in heavy-duty towing, you should make it sure that there is no damage to the vehicle or any surrounding property. You need a well-qualified driver who can handle heavy-duty towing.
Additionally, you can also offer emergency roadside services. These are basically designed to assist drivers in common day-to-day problems. Services can include:
- Flatbed towing: Consider using a specialized tow truck to carry the vehicle from point A to point B.
- Dead batteries: After repeated intervals, batteries tend to go down and if they die down while you are on the go, the vehicle might stop responding.
- Flat tires: Flat tires can come without a warning or notice and can leave us stranded on the roads.
- Lockouts: A towing service might come handy in in the event of lockouts.
- Empty gas tanks: If the vehicle runs out of gas on the road the towing service is definitely required.
How much can you charge customers?
Most towing companies charge a minimum of $50 for the first 5 to 10 miles, then $2 to $4 per extra mile. The average cost of a tow truck service is $75 to $125. The average 40-mile tow costs $125 to $250. The factors that affect the charges of towing service are:
- Type of vehicle
- Distance
- Time of the day
| Tow Truck service Cost | |
| National Average Cost | $95 |
| Minimum Cost | $50 |
| Maximum Cost | $300 |
| Average Range | $75 to $125 |
Who is your target market?
Your target audience will include people who get into road emergencies and need to towing services. You can expect calls for your towing services from police departments, service stations, car clubs, auto auctions, and property owners to tow and move a vehicle. You should also try to reach out to hotels and other tourist accommodations. You should reach out to all these organizations and make them aware of your towing services.
Choose your business premises
It’s a wise idea to operate from home in the initial stage of business development so that your expenses remain minimal. Once your business grows operations intensify, and you will need to hire workers for different job roles and may need to rent out an office or shop.
You can check sites such as Craigslist, Crexi, or Instant Offices that rent commercial space. Follow these thumb rules while choosing your office or shop:
- Must be centrally located and accessible via public transport.
- Must be well-ventilated and spacious, with good natural light.
- A competitive rent.
- Flexible lease terms. You may want to extend as your business grows.
- Ready-to-use space with no major or repairs or renovations required.
Step 3: Decide the Towing Company Name
The business is your identity and should convey your objectives, services, and mission. make sure that your company name is short and easy to remember.
Choosing the right business name is important and challenging too. If you operate a sole proprietorship, you might want to operate under a business name other than your own name.
Research your business name well by checking
- Your state’s business records
- Federal and state trademark records
- Social media platforms
You can check the availability of related domain names using various domain name search tools like godaddy.com. It’s wise to use a .com extension as it increases credibility.
Keep in mind that the name should be
- Keep it simple: When the name is simple and straightforward, it makes it easier for the customers to find and refer you to others. Complex names may be confusing and customers may find it difficult to spell or pronounce.
- Industry relevant: Use the words such as “towing”, “car towing”, or “lifting”, so that customer gets the message about your business. The name should convey what business you are in.
- Keep your audience in mind: Choose a name that resonates with your audience. An audience-related name will help build a strong connection and build loyalty.
- Keep it short: Short names are easier to remember and recall. They are more visually appealing on signage and marketing materials.
- Memorable: A memorable and catchy name will remain in the minds of the customers and will help them recall when they need your services.
- Bold & Creative: Let the name be funny or playful. Such names can help your business name stand out and remember more easily.
- Avoid location-based names: Avoiding location-based names might hinder future business expansion.
- Ask around: Ask friends, family, colleagues, social media, etc. for suggestions.
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration.
Design your company logo
Source: venngage
Apart from the tips listed above, remember the following points when deciding your logo:
- Keep your logo simple but not simplistic
- Your logo is an honest reflection of your dump truck business.
- Black and white color combination goes well with logos.
- Logo should be balanced; one element should overpower another.
Step 4: Create a solid business Plan
Source: Business Process Incubator
Once you are confident with your skills, it’s time to create a solid business plan and start building your own business. A detailed business plan will help you with your goals, target audience, financial plans, business structure, and more.
Your business plan will function as a guidebook to take your business through the launch process and maintain focus on your key goals.
The towing business plan is a written document that outlines how you intend to achieve your company’s goals such as:
- Grow your revenue
- Get the funding for your business
- capture the market share
- Maintain control over your business if problems arise
There is no right or wrong way to write a business plan. You can choose the best format that suits your business. The business plan can be one-page format as above or it can be a traditional way as below.
The key points to include in your business plan are as under.
- Executive Summary: It provides an overview of the entire business plan, highlighting the key points and objectives. The executive summary should be written once the plan is complete.
- Business Overview: Here, you should mention an in-depth overview of the business, including its vision, mission, ownership structure, and corporate goals. Make sure you mention the core values and unique qualities of your business that differentiates you from the competitors.
- Product and Services: Describe your services in detail. Must Include information on the different packages and add-ons.
- Market Analysis: Conduct a thorough market analysis, including trends, demand variations, potential areas for growth, and more. Perform a SWOT analysis to identify strengths, weaknesses, opportunities, and threats.
- Competition Analysis: Analyse your competitors, assess their strengths and weaknesses, and write the advantages of your services as compared to the services offered by the competitors.
- Sales and Marketing: Decide your company’s USPs and create sales, marketing, and promotional strategies. Create strategies related to pricing, advertising, lead generation, and referrals.
- Management Team: Give an overview of the management team, their roles, responsibilities, and professional backgrounds. Also, include an organizational chart or a corporate hierarchy.
- Operations Plan: The operation plan will include procurement processes, assets and equipment, office location, and logistical details.
- Financial Plan: The financial plan will demonstrate the financial viability and sustainability of the business and will cover, start-up costs, break-even analysis, profit and loss estimates, and details of the cash flow balance sheet.
- Appendix: This may include additional documents that support the information presented in the business plan, like research data, sample contracts, and other relevant documentation.
Step 5: Register Your Business
Registering your business is an essential and vital step in starting a business. It is a basic requirement for tax payments, accessing capital, opening a bank account, and other related aspects of establishing your business.
The registration process is exciting as it formalizes your business. Once completed, you will have your very own business!
Choose where to register your company
The location of your business is an important part of your business as it affects taxes, legal obligations, and revenue generation. Generally, it makes sense for small businesses to select the home as your state of domicile, but if you have plans for expansion you should also explore other options. Few states may have additional benefits for your business.
Registering your business in other states involves a simpler registration process through the secretary of state. In states beyond your home state, your business is considered a foreign entity.
Choose your business structure
Business entities are of various types, and each has its own set of advantages and disadvantages. The company structure you choose will have an impact on factors such as tax obligations, personal liability, and registration requirements. So, make a well-informed decision.
Your options are:
- Sole Proprietorship – Sole proprietorship makes no legal distinction between the company and the owner. It gives you complete control over your business. All income goes to the owner, and the owner is liable for any losses, debts, or liabilities incurred by the business. The owner has to pay the taxes on business income on his or her personal tax return.
- Partnership – This business structure is similar to a sole proprietorship, but owned by two or more individuals. Partnerships are of two types: a general partnership (everything is equally shared between the partners) and a limited partnership (operations are controlled by one partner).
- Corporation – In this type, a business entity is separate from its owners. Shareholders are not personally liable for the company’s debts and obligations.
- Limited Liability Company (LLC) – The LLC Combines the benefits of corporations and partnerships. Profits and losses pass to owners and the business doesn’t get taxed. The owners are not personally liable for debts.
For a small business, an owner LLC is a better option because it offers liability protection and pass-through taxation and it’s simpler to form an LLC compared to a corporation. There are a good number of LLC formation services available online that can form an LLC in five minutes.
Step 6: Register for Taxes
The last step before you are able to pay taxes is getting Employer Identification Number or EIN. You can apply online through the IRS website and get EIN in a few minutes. If you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. An EIN can help you at the time filing business taxes to get a business credit card and open a business bank account.
IRS website also offers tax payers checklist, and taxes can be filed online.
Once you get an EIN, you need to choose a tax year, which can be (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, and which taxes you’ll pay will be determined by your business structure.
It is a wise idea to consult an accountant or other professional to help you with your taxes.
Step 7: Fund Your Business
To operate a box truck business, you will need funds. Financing can come in various forms as below.
- Your own money: You can fund your business through your personal savings or the sale of property or other assets.
- Friends and Family: You can reach out to your friends and family for loans or investments in your business. You should get legal advice when doing so as SEC regulations apply in this case.
- Crowdfunding: Crowdfunding involves funding a project by raising many small amounts of money from a large number of people, typically via the Internet.
- Bank loans: This is the most common method of securing financing for a small business but getting approved requires a very good business plan and strong credit history.
- SBA-guaranteed loans: In this case, The Small Business Administration (SBA) can act as guarantor and helps to gain the bank’s approval via an SBA-guaranteed loan.
- Government grants: There are various financial assistance programs to fund entrepreneurs. To know more visit Grants.gov
- Venture capital: Venture capital (VC) is a form of private equity and a type of financing that investors provide to start-up companies and small businesses that are believed to have growth potential.
When you are just starting a business, venture capital may not be the best option. You need to offer an ownership stake to the investors in exchange for funds and obviously have to sacrifice some control over your business. You can think of this option only when you’re ready to grow your business to a large scale.
Step 8: Permits and licenses required to start a towing business
Check the necessary permits and licenses with your state’s Department of Transportation to ensure that you meet all requirements for the business license. For specific permits you must check with state and local city county clerk office.
As a tow truck vehicle owner will typically need the following company license and permits:
- Class B driver’s licenses (it gives legal permission to drive a vehicle weighing 26,000 pounds or heavier or tow another vehicle that weighs 10,000 pounds or less.)
- Indictment management permit (to tow a vehicle without its owner’s consent at the request of law enforcement authorities)
- Private property permit (if you are towing an illegally parked vehicle without the owner’s consent)
- Consent to tow permit (to tow a vehicle with the consent of its owner.)
- Oversized vehicle permit (if you occasionally tow a vehicle exceeding the permitted weight.)
You can check the SBA guide for your state’s requirements. Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), copyrights, trademarks, patents, and other intellectual properties and industry-specific licenses and permits.
Step 9: Open a Business Bank Account & Credit card
Before you start your business, and make money you will have to open a bank account.
You may keep your business finances separate from your personal account to simplify filing taxes and tracking your ice cream truck business income, even if you operate it as a sole proprietorship. Opening a business bank account is quite simple, just inquire at your preferred bank to know about their features and rates.
Once you decide on your bank bring in your EIN (or Social Security Number if its sole proprietorship), articles of incorporation, and other legal documents and open your new account.
You may also need a business credit card, especially for events requiring a heavy expenditure. Compared to other types of credit, it is easy to qualify for credit cards when you are a brand-new business. Having funds available in case of emergency is always intelligent.
Step 10: Get Business Insurance
It is very important to have appropriate insurance for your box truck business as insurance protects you from devastating consequences resulting from unexpected events.
In order to operate safely your business needs insurance, it protects your company’s financial well-being in the event of a covered loss.
- General Liability Insurance: General liability insurance protects your business from claims that it caused bodily injury or property damage to someone else. Many small business owners also get a general liability insurance policy that includes product liability insurance that protects their company from claims of bodily injury or property damage that their products cause.
- Professional Liability: Professional liability insurance helps cover claims related to mistakes in the professional services that your business provides to the clients. For example, if your accounting firm makes a mistake on a customer’s financial statement and they have to pay a penalty. If they sue your business, professional liability insurance can help cover your legal costs.
- Worker’s compensation: Workers’ compensation insurance provides benefits to employees if they get an injury or illness because of the work.
- Commercial Auto: Commercial auto insurance provides protection to company-owned vehicles.
- Business Property: Business property insurance Provides coverage for your supplies and equipment.
- Commercial property: Commercial property insurance helps protect your owned or rented building and the equipment used to operate it. So, if someone breaks into your building and steals your business computers, commercial property insurance can help cover the replacement costs.
- Equipment breakdown insurance: Equipment breakdown insurance covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
- Business owner’s policy (BOP): This is one of the popular insurance policies and combines general liability insurance commercial property insurance and business income insurance.
Step 11: Prepare to launch
Develop your website
Your business website serves as your online presence and plays a critical role in convincing potential clients of your expertise in the field. You can utilize user-friendly platforms like WordPress, Wix, or Squarespace but it may require some time and effort to familiarize yourself with the website-building process. If you are not technically sound you can hire a skilled web designer and get the things done. To increase the visibility of your website in the search engines like Google, you need to apply Search Engine Optimization (SEO) strategies so that prospective clients discover your website easily.
Marketing
Online visitors may visit your website and bring in some business but to get more leads you must invest in digital marketing. For a new business, it’s very important to build brand awareness.
Social media platforms like Facebook, Instagram, Pinterest, etc. are another better option for diverting traffic to your website. Link your business website to all your social media accounts and keep posting engaging content and advertise your services.
- Facebook: Facebook is the largest social networking site in the world and it’s a great platform for paid advertising. It allows you to target specific demographics, like children under age 15 in Portland.
- Instagram: It is a great visual social networking platform and an ideal place for showcasing your products or services with photos or videos. It has the same benefits as Facebook but with different target audiences.
- Website: A good SEO will help your website rank higher in the search results and the prospective clients will discover your business portal easily, this in return will bring in more sales. Add the right calls to action with attractive font and color.
- Google and Yelp: List your services on Google My Business and Yelp if you want to focus on local clientele.
Increase awareness and build your brand
Once you have your website ready and presence in the social media do some real-life activities to increase awareness of your brand. Some of the activities you can do are:
- In-Person Sales: Local markets and trade shows are great places to offer your products.
- Ask for referrals: Offer some incentives to the clients who bring in new customers.
- Post a video on YouTube, Facebook, and Instagram: Post an awesome video of your box truck and show how meticulously to did the task.
- Start a blog: Start a blog with a good user interface and share knowledge and experiences that prospective clients may find useful. Add eye-catching infographics to your posts.
- Testimonials: Share maximum testimonials on the platforms where you have a presence.
- Giveaways: Offer prizes and discounts for customers who complete a certain action, such as 40% off your first order.
- Flyering: Distribute flyers in your neighborhood, community centers, and more.
Must have tools & software
There are many software and digital tools available in the market that can simplify your business tasks and make life easier. Some of the well-known softwares you can consider to easily communicate with customers, manage and keep track of inventory, allow customers to track the repair process, send quotes and invoices to customers are AutoRepair Cloud, TowManager, and MedinyX .
Accounting
There are some popular web-based accounting programs, especially for small businesses such as Freshbooks, Quickbooks, and Xero.
You can also think of hiring a professional if you are unfamiliar with basic accounting because mistakes in filing incorrect tax documents can lead to severe consequences.
Focus on USPs
Unique selling propositions (USPs) are the unique features of a product or service that differentiate your service from your competitors. Customers, today have so many options but if they grasp your service quickly and understand how your service meets their needs, then you will have a real advantage.
Source: wexlerllc.com
- Some of the best USPs you can have are:
- Swift and Sure, Towing Pure.
- Towing with Speed, Fulfilling Your Need.
- Haul-a-Friend, Till the End.
- Quick Lift, Smooth Shift
- Reliable Lift, Your Safety’s Gift
- SpeedyTow Gurus: Swift and Efficient Towing
Network
A good network of people related to the towing industry is a must to expand your business. Reach out to your existing personal and professional contacts who may have relevant connections in the logistics or trucking industry. Leverage industry events, social media platforms, and online forums, and try to engage with your potential customers.
Collaborate with companies that offer transport and hauling services and tap into their customer base. You can also explore affiliate marketing and gorge relationships with online businesses.
Step 12: Build Your Team
When you just start out it’s obvious that you will start single and will operate from home. At this stage, you will not require employees. But as your business grows you need to hire staff for the smooth running of your business. Some of the positions you will look for when you are in the business expansion stage are:
- General Manager
- Drivers
- Marketing lead
Source: Patriot
Step 13: Run a Towing Business & start making money
A towing business has great earning potential, it is a big industry, and plenty of money to be made. You can offer various services in the towing industry.
By starting a towing business, you would be clearing the roads of these traffic hazards and helping your community while earning good money at the same time.
Frequently Asked Questions
1. Is towing a good business to start?
Yes, surely towing is a good business to start, it is worth $10.3 billion (Growth rate of 4.1%) in the U.S. It is a relatively recession-proof business. Regardless of the economy, people will always need reliable towing services whether it’s due to flat tires, car accidents, or breakdowns.
Apart from traditional towing services, you can also offer roadside assistance, jump starts, tire changes, and other services. This can increase your revenue and attract more customers.
2. What is the profit margin for a towing company?
The average cost per tow service is about $75 to $125, and after your expenses, of fuel, insurance, and marketing, you should have a profit margin of 65%.
The factors that affect the charges of towing service are:
- Type of vehicle
- Distance
- Time of the day
3. How to make money owning a tow truck?
There are multiple ways to make money by owning a tow truck such as towing cars, vehicle storage, offering roadside assistance to people whose batteries died, tires went flat, battery changes, lockout assistance, or even combining it with mobile mechanic services.
4. How does a tow truck work?
Tow trucks transport vehicles that cannot move under their own power from one location to another. The vehicles under transportation could have suffered from a mechanical breakdown or have been affected by an auto accident, a tow truck brings the vehicle to the home or the chosen repair facility.
The boom on the back of the tow truck carries a heavy-duty chain and hook, which is attached to the underside of the vehicle requiring a tow. Once the vehicle is secured, the boom is lifted to leave one set of wheels on the ground for towing.
5. Is a tow truck business profitable?
The tow truck business is definitely profitable. You can make around $40,000 in net profit if you start as a solopreneur, and start with a used truck. As you attract more customers and increase the team size, you may expect to make more profits. As the towing business requires sizable investment the return on investment could be lower compared some other alternate business options.