Are you looking to get away from a shared office space environment and work from home? While working from home has lost its perks in recent months, it’s still a fantastic way to manage costs while providing privacy and freedom.
But working from home does mean you need a new set of skills. You need to learn to be energetic despite distractions and broken glances around the house. You need to learn to manage frustration when you reach a bump in your learning curve.
For some, a towing business will be the best solution when starting a business from home, while others will continue to run their service from their home offices. Here’s how to start a towing business.
Research the Towing Industry
Research should include learning the different transportation laws in the state, getting certified and licensed, and studying the competition. It is essential to start building relationships with the following:
- local law enforcement
- roadside assistance companies
- insurance companies
- auto repair shops
After researching for your new company, it is important to purchase the right type of vehicle, tow trucks, and other equipment. Obtaining liability insurance and choosing a payment method is necessary for running a safe and legal towing business.
Create a Business Plan
This plan should include researching the services available in the area to ensure an available market for a new business. To start a business, consider the costs of setting up the business, such as:
- purchasing tow trucks
- obtaining business insurance
- other equipment
Create an outline of who will work in the business, their roles, and the business structure. Develop a marketing plan to allow potential customers to find the business and ensure the towing company stands out from its competition. Analyze the potential profits and determine the services that will provide the most profit.
Determine Your Business Structure and Legal Requirements
This includes selecting a business entity type such as a sole proprietorship, general partnership, LLC, or corporation. Additional steps, such as tax and insurance paperwork, may be needed depending on the type of entity chosen. It is also important to ensure that the business is properly licensed in the state.
Applying for and receiving the necessary permits and licenses is essential to operate legally. Understanding the zoning laws and applicable requirements from local and state governments is key to forming a legal business.
Acquire the Necessary Equipment
Depending on the size of the business and the size of the tow truck, the cost for a tow truck will vary from $25,000 to $100,000. Investing in a larger truck that can accommodate heavier tows is a must for a successful business, but this can be expensive. Another factor to consider is whether to purchase a new or used vehicle.
Used vehicles are typically less expensive, and there are far fewer maintenance and repair issues to be concerned about. Buying a used truck can help offset the costs of the larger tow truck. Other necessary equipment needs to be acquired, such as:
- wrecker and flatbeds
- tie-down straps
- spare parts
- special equipment
- tools and winches
- safety items
All necessary items should be closely examined to ensure they are in proper operating condition and meet the standards for a towing business. If you feel ready to take the plunge, take the time to look at different tow truck for sale now.
Set up a Base of Operations
An efficient workspace is essential for the success of any business. First, select a spacious area big enough to fit the necessary equipment and employees, with plenty of room for expansion. Determine the minimum square footage needed to house the towing fleet and associated equipment.
Rent an office space that meets these needs by looking at local listings or on real estate websites. Consider factors such as:
- secure parking for the fleet
- public transportation
- highways nearby
- local economy
Consider setting up an online presence to promote the business before opening day.
Develop Relationships With Local Businesses
Reach out to these businesses by introducing yourself, providing detailed information about your services, and offering a discount to those willing to partner with you. You can also attend networking events to expand your potential customer base.
Utilize platforms to build brand awareness and further publicize your towing business. Consider offering emergency towing services near businesses that may encounter long-term travelers, such as motels, hotels, campgrounds, and auto repair stores.
Create a Marketing Strategy
Identifying a specific target market will help entrepreneurs understand what services to offer and the techniques they can use to attract new customers. Next, entrepreneurs should research their competition to understand the dynamics of their local markets. This helps to determine pricing and positioning for their services.
Entrepreneurs should create ads and campaigns to raise brand awareness. Local radio or television advertising will help spread the word about the company’s services and reach potential customers. They should consider online advertising and social media marketing tools such as SEO, SEM, and email marketing to extend their reach.
Offer Additional Services
Towing companies can offer additional services to diversify their business. For example, providing additional roadside services such as fuel delivery, vehicle jump-starts, and tire changes help to attract new customers. Offering emergency vehicle unlocks can also be beneficial to clients in need.
It’s also important to ensure tow truck operators know how to properly hoist and transport vehicles as safely as possible. Maintaining up-to-date certification keeps operators abreast of industry best practices. Offering discounts and specials can entice both current and prospective customers.
Establish Proper Pricing
Every town requires different types of towing, which can vary in price. Therefore, it is important to research the price control laws in the town before setting fees. Start by looking into the base towing fees, additional fees for individual services (like a winch, dollies, extra driver, etc.), storage, and sale fees.
Finding the middle ground between a competitive price and a reasonable profit margin is necessary. Miles traveled should be considered, as most tows result in added mileage and may require additional fees. Once the pricing has been established, the towing business can be up and running quickly.
Start Your Towing Business Today
Starting a towing business is a great way to become your boss and earn a steady income. With the right licenses, equipment, and expertise, you can build a successful and profitable business in the towing industry.
Start by researching the necessary steps, gaining the necessary assets, and networking with potential clients. You can be on the right track to success!
For more great advice and information, check out our other blog posts!