How to a start a towing business
Vehicle towing services are rendered by vehicle towing companies.
These are companies especially concerned with removing abandoned or illegally parked cars, transporting stranded vehicles and vehicles involved in auto accidents.
These companies particularly select customers such as small-business owners, police departments, car dealerships, apartment management companies, etc.
With a good start-up capital and a good location, you would go a long way towards making huge profits from this industry.
If you are interested in starting a small vehicle towing service, you should get acquainted with all of the various steps to start.
The following are some steps to walkthrough on how to start a towing business.
1. Choose your Niche
If you are interested in starting a small vehicle towing service, you should note that various niches within the towing service industry you can choose from.
Below are some niches within the vehicle towing industry that a small car towing business can specialize in:-
Towing of private owned vehicles-
Towing of vehicles for government agencies-
Towing of trailers- Aside from these primary niches within the towing service industry, you can, however, carve a niche for yourself if you are very creative.
2. Decide on how you want to Operate
To start a small vehicle towing service, you will have to decide how you want to operate your business.
How small do you want to operate? Would you prefer to carry out your towing vehicle service as a single-truck towing business, or would you decide to hire a few drivers and work as a small-scale multi-truck business?
If you decide to operate a multi-truck towing service, you will require more capital and more than one towing truck.
In addition, you will need an office that would serve as a central dispatch unit where clients’ calls would be received and available trucks sent for handling the situation.
3. Choose the Right Location
You should do your study well to get the best location for your small towing service.
Before starting your small vehicle towing service, you should first carry out a thorough study of the market to see where your assistance would be most needed.
It would help if you located your small vehicle towing service business in an area with healthy business activities.
4. Get Registered and Obtain License and Permits
If you are very serious about starting a small vehicle towing service, the next thing you must do after considering the above-highlighted steps is to look for a catchy name that is not difficult to pronounce; proceed to the relevant authorities to get your vehicle towing service duly registered.
You should do well to get your business license and obtain the necessary business licenses and permits.
5. Write a Business Plan
For people who are very serious about starting a towing vehicle service –no matter how small they want to operate– the first thing to do is write out a well-detailed business plan.
Now I cannot over-emphasize the importance of having a good business plan.
More importantly, your business plan should detail the towing service you want to offer –this should appear in the first section.
The second section should detail the start-up capital for your towing vehicle service and how you will secure the start-up capital. The third section should describe the market plan for your towing vehicle service.
6. Determine how to Get Financing
Having written your business plan, you should by now have profound knowledge about the startup capital required for starting your small vehicle towing service.
It would help if you did your research correctly to determine the start-up capital you need to start your small vehicle towing service.
According to cost analysis carried out in the United States, the minimum start-up capital required for starting a small vehicle towing service is $200,000.
Although the location has a significant effect on the start-up capital, you should bear those figures in mind if you are serious about starting a small vehicle towing service.
Do well to determine how you would secure the financing for starting your small vehicle towing service.
If you would require financing from investors and banks, this is where a good business plan would come in handy.
7. Purchase or Lease Parking Lot
You will have to secure a parking lot for your small vehicle towing service.
Most vehicle towing companies hold cars in their parking lots or yards for days or weeks.
These vehicles are confiscated maybe because a property owner wants an illegally parked vehicle removed or maybe because the owner could not pay to have the car removed from an accident scene.
8. Purchase Towing Vehicles and Equipment
Purchase towing trucks and equipment from truck and auto supply stores. It will help if you are looking for high-quality towing trucks and equipment. Some types of wreckers you should purchase include rear hook and flatbed types.
Most towing service companies purchase flatbeds because they can accommodate severely damaged vehicles.
If you decide to purchase used tow trucks, do well to ensure they are in top running condition because your towing vehicle service largely depends on it.
9. Obtain Business Insurance
You should do well to obtain commercial liability insurance that covers your clients, your tow trucks and drivers, and yourself. Go for a good insurance policy that maximally provides this coverage.
10. Market and Promote your Services
Market your vehicle towing business in your location. As a new starter in the car towing industry, you can find customers from various sources.
Some of them include car dealerships, small business owners, apartment management companies, police departments, garages, individual motorists.
Have a business card (keep it simple). Advertise your business in business magazines, television, and radio.
List your vehicle towing company on local business directories to enable prospective customers to find your business.
Take your business to the cyber world.
The world is moving on a fast lane, and going cyber is the way forward.
Create an online presence for your towing vehicle service regardless of how small it is. Have a functioning website that people could log onto.