Start Your Own Towing & Wrecker Service
How You Can Start A Towing Company
Tow truck businesses help stranded motorists when their vehicles break down. They tow disabled vehicles somewhere safe for repairs and often, they tow cars that are illegally parked. Opening your own towing company is a good idea if you are mechanically adept and you want a business that is relatively easy to operate and that will generate decent cash.
If you are looking to start a business, the towing business may be right for you if you have a desire to help others. With towing services, you will be able to pick up stranded motorists, drive their vehicles to repairs shops or restart their vehicles if their car battery has died.
Towing services are in demand from the public as well as from motor clubs, auto repair services, auto auction houses, and police departments.
Steps to Start A Towing Company
Form your business – You may wish to contact an attorney or CPA for details. You can choose to be a sole proprietor, an LLC, or a corporation. For tax purposes and for liability purposes it is often best to become an LLC. Also, register the business entity with your state and with the IRS so you can pay taxes.
Open a business account Use a separate checking account for your business.
Arrange accounting and bookkeeping methods You might use Quickbooks or keep a ledger by hand. If you have the budget for it, you could hire an in-house bookkeeper to keep track of money that comes in and that goes out every day.
Get all permits and business licenses
If you need a license to do business in your city, make sure to apply for the license as soon as you start up. Obtain Commercial Drivers Licenses for all drivers. CDLs are required for driving vehicles over 26 thousand pounds.
Insure your business – Get workers compensation and general liability insurance as well as the insurance needed to cover the business vehicles.
Define your company’s branding
Start your website and choose a logo and an angle about your business that you can use as its brand. Be sure to create social media profiles for the company. Use the online platforms so that customers can request tows there as well as by phone. Make certain to leverage your web presence and make special offers to entice people to use your service especially as you introduce your company to the community.
Buy your fleet
You can start with one vehicle or you can start with several all depending on your available capital. An average tow truck will cost about $10,000 to $30,000 dollars. Decide whether to get flatbed or rear-hook trucks. Flatbeds are the most popular because of the variety of vehicles they can pick up.
Obtain access to a lot or other parking area
Your company will be towing many impounded cars. You will need to have a secure lot where you can store vehicles for a few days to a few weeks.
Start a dispatch office
You can start up in your own home but remember to use a dedicated space for tax purposes for your home office. Once your company takes off you may end up needing to rent outside office space.
Hire employees- You might be fine starting out on your very own in which case you do not need employees to help. If you have the budget for it, and you can hire others, be sure to hire people with CDLs or commercial licenses and clean driving records. It is also a good idea to have a random drug testing policy in place for the future.
Determine what to charge
You can call other local companies and ask anonymously what they charge for a flat-rate tow. Get an idea of the going rate and also do research with the local transportation authority to find out current rates. You do not want to undercharge any more than overcharge in this business.
Your fee structure might include a flat rate tow along with mileage fees for jobs that take drivers a certain distance. You should also determine appropriate storage fees.
These are the basic steps you need to take to start your towing business. As you can see, it is not that difficult to start one up. However, do not forget that running a business requires having the ability to look at the long-term. Be willing to be flexible and go with changing economic trends.
Continued success requires that you evaluate your company regularly. See how well it is performing and make adjustments as you need to. Get customer feedback and make it a point to reply to any social media inquiries quickly and to thank a customer when he or she leaves you a glowing review online.
List your business with your local auto club and police department. These are sources of consistent work for you. Good luck with your new venture helping motorists out there on the road and off it!