Starting a towing company involves getting certain requirements sorted out. These include structures that greatly contribute to its smooth running.
For most new entrepreneurs, this can pose a challenge due to inadequate knowledge of what to do.
It’s because of such problems that we seek to bridge the information gap. Meeting each of the following requirements should suffice.
Get the Right Equipment
Starting a tow truck company requires significant investments in equipment. The equipment you purchase depends on how much you can afford to spend on such. The most basic equipment includes one or more tow trucks, flatbeds, traffic cones, booster cables, a well-equipped tow including accessories and floodlights.
Others are GPS, winter snowsuits, flares, jacks, an air compressor, fuel tanks, and amber strobe lights among others.
Adequate Funding
Floating a successful towing business is largely dependent on funding. Sufficient funding helps with smooth operations. The purchase of towing trucks will take up a large part of this. However, you don’t need to be worried if you have limited capital. There are several financing opportunities you can apply for.
Funding could be sourced through loans, equipment financing, angel investors, and a host of other options. Another way to cut down on equipment costs is through leasing. This way, you don’t need to purchase a new truck as this could take up a significant part of your capital.
Leasing is the easy way out. This attracts a monthly rental which you have to pay to continue using the equipment leased.
Another option to take advantage of is tow truck financing. Under this arrangement, lenders provide the needed funding to purchase the tow trucks you need.
Office Space And a Secure Yard
Office space is one of the essential requirements for starting a towing business. So also is a secure yard. When towing cars, you will have to keep cars in storage for clients. A secure yard is needed for this. Also, this will attract a fee for as long as the vehicle remains in your keep.
The yard and office don’t necessarily have to be in the same location. However, both must be within city limits.
You Need a License to Operate
All states have some form of licensing requirement you must meet. Driver’s licenses are also included in the mix. You will have to find out what specific licenses you must apply for. In general, a written application will need to be submitted to the issuing city department. A non-refundable investigation fee accompanies your application submission.
Most applications make inquiries about your towing business. Questions will usually border on the name you wish to give your business, its legal structure, towing business ownership details, address of the business as well as its storage facilities. Your details will also be required. Towing companies are also required to pay a license fee of $100.
Applying for Insurance
An insurance cover for your towing company is very important. This is a vital requirement as it covers accidents, damage, and injury. Insurance plans and costs vary. This is due to factors such as employee and business owner(s) driving records. Others include the type of towing, as well as the number of people you wish to employ.
Proof of Insurance
You must have applied and completed all insurance requirements for your towing company. This is because you’ll need to show proof when filing for an application with your city’s clerk. Therefore, you must present your insurance certificate. Your proof of insurance must have a minimum coverage of $100,000.00. This covers bodily injuries as well as damage to property.
Qualified Drivers
Drivers are a crucial part of the daily operations of a tow company. Your insurance policy must cover these drivers. However, all drivers must be at least 18 years of age. Drivers are expected to have in their possession an operator’s license. The number of drivers you need will depend on the scale of your operations.
For a small towing business, you can operate your trucks yourself. More drivers can be recruited as the business expands.
Abiding By Regulatory Laws
All towing companies are expected to abide by regulatory laws applicable to their cities. One such law has to do with the solicitation of business. There are clear designations that border on the restriction of operation for tow trucks on public roads apart from being called for an emergency.
In other words, tow trucks must not be seen soliciting for business on public roads or spaces. Such a truck should only be available in emergency cases.
Have an Effective Marketing Strategy
To sell your service, you’ll need to put the word out about your towing company. This involves a lot of work and also requires your total dedication.
One of the most popular marketing strategies used by towing companies involves printing or covering their tow trucks with information about the company. This is a type of moving billboard and should be bold enough or people to easily see.
Social media has been and will continue to be an effective tool for marketing your company. Sponsored targeted ads can be paid for. This targets your city or local community, thereby making your business more visible to people.
You may also want to buy billboard spaces for adverts about your towing company. Such billboards must be located in strategic areas of the city. That way, more people get to see and patronize your towing business.
A Business Name and Plan
Choose a name that resonates with your target market.
In other words, you should get creative with your business name. This should stick easily and can be incorporated into your business logo. Your towing business plan is invaluable to the survival of your tow company. Take all the time you need to write a sound plan.
You should also consult professionals for their inputs too. If you’re not sure about what should be included, then you may need to hire the services of experts to write it from scratch. However, you will need to provide all the information required.