Starting a Towing Business

Interested in small towing business ideas? If YES, here is how to open a towing truck business with no money and no experience. How much does it cost to start up?


Starting an Independent Towing Truck Company: Prospects, Income, Requirements and Startup Cost


Do you want to know how to start a towing business? Are you interested in making money by running a towing business? A towing business as with all businesses can be challenging as well as rewarding, especially when a solid foundation for its success is put in place.

With stranded motorists usually not possessing legal tow permits and at the same time, auto repair shops not maintaining tow trucks as part of the auto repair shop; it presents a great investment gap for entrepreneurs to fill in.

Independent car towing companies come to the rescue of stranded passengers as auto repair shops largely rely on their services to bring damaged vehicles to them.

Get a License

In North America, getting a license to operate a towing business is very difficult and challenging due to heavy regulation. Some operators of towing companies have devised a means of going round this problem.

They sub-contract their services to property managers and car dealerships to carry out this work (towing). But his is fraught with risks as they are not covered by proper towing business liability insurance.

How much does it cost to start a towing business?
The solution to this is to purchase this license from an already established franchise towing company, but this comes at a high cost. Purchasing a license and tow truck can cost as much as $200,000! But if the buyer is able to get a license and tow truck at a fair price, the possibility for increased profit margin is unlimited after buying a towing truck business for sale.

Your Target Market

Your target market consists of areas where your services are much in need, and putting this in context, there are several thousands of car breakdowns on highways and off highways, vehicles parked illegally in private spaces or property, improperly parked outside public spaces such as roadsides need to be towed.

In order to enable customers easily recall your company/business, a serious and aggressive marketing campaign needs to be carried out in order to register your business in the memories of potential clients for use whenever they are in a fix with. In order to achieve this, a catchy name and phone number can do the trick. All these should be well captured in your towing business plan.

Start-up Procedure

What do I need to start a towing business? What are the requirements for a towing company? There are procedures or steps to take when starting a towing business and among these procedures, filing the necessary paper works with the state or the authorities is required.

Also, it is best if the business is registered as a limited liability company or a corporation due to the fact that these legal structures provide protection to businesses to a large degree as compared to businesses registered under sole proprietorship. Also, inquires about business permits and other documentations need to be made.

What Cars Make up Your Fleet?

What are the costs of running a towing business? Depending on how large or small a tow business may be, functionally tow trucks or wreckers have to be put in place. The number of towing businesses using the flat bed model of two trucks is on the rise, and you will do well to have one. This is because they are able to tow badly-damaged vehicles unlike the hooked wreckers where the rear-wheel axle of the damaged cars needs to be in good shape, including the tires to enable easy towing.

As your towing company expands, more tow trucks and equipment are inevitably needed, and hence, for example, instead of a single cell phone call to the tow driver, a dispatch system would provide easy management and mobilization.


Holding Yard

A secured parking lot is crucial to the smooth operation of a towing company. Impounded cars whose owners are unable to pay for their release are kept in such secure yards pending when their owners off set their bills.

These holding yards can hold vehicles for days and even weeks. Having this is very invaluable to the smooth running of a towing business as it presents another way of generating critical income.

Market Access

In order to gain a fair share of market access, tow companies both new and old need to make their presence felt by both the authorities and potential customers. How may this be achieved? You may ask, by simply making contact with the local police jurisdictions for your tow company to be included in their roster of accident responders.

Also, you can visit local auto shops around to strike a mutual referral agreement. Also, your towing business company must have an online presence where customers can easily make a tow request if you wish to have a fair share of the local market.

Colorful towing company business cards should be spread across strategic locations such as bulletin boards, in auto repair shops and also in local bars. This serves to register your presence and create awareness in the minds of your potential customers about the availability of this service.

Employees/Drivers

For your business to move smoothly, only drivers with good track records of driving and also possessing commercial driving licences should be hired. They must be polite and helpful and also, they must also possess clean driving records.

Purchase High Quality Equipment

What are some basic towing business start up costs? A good and functional tow truck is crucial to tow business success, hence, investing in one or several as your financial strength may allow is necessary. When buying a tow truck or trucks, the services of an independent vehicle inspector should be enlisted. This is to enable him/her carry out examinations on the car to find out if it is worth buying and would serve the purpose or not.

Commercial Liability Insurance

This is so important to a towing business survival as it provides coverage, protections and insurance against sudden damage or accidents involving either the client’s car or your tow truck. The minimum required coverage as spelt out by the state should be provided or made available and costs should be prepared from your annual towing business income.

Is towing a good business?

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