Start a Vehicle Towing Business


A vehicle tow truck business is slightly challenging but rewarding. Investors need to purchase a vehicle, rent office space and hire workers. Other requirements are startup funding, insurance, licensing and permits.
You should determine your work hours such as a 24 hour shift or only day towing. The rewarding aspect of the business is helping someone in desperate need to tow a faulty vehicle.
Startup cost is estimated at $10,000 to $50,000 and franchise opportunities are available. You can operate the business from home or a dedicated office.
tow truck
The Job Description
A tow trucks duty is to make the roads safe for commuters and vehicle owners. They tow illegally parked vehicles, faulty vehicles and abandoned vehicles. They are usually independent contractors that work closely with the authorities.
  • Tow illegally parked vehicles
  • faulty vehicles
  • abandoned vehicles
Types of Tow Trucks
To start the towing business you need to decide on the type of vehicle. There are four common types to consider. We have the integrated tow truck, hook and chain truck.
Others are the wheel-lift tow truck, and flatbed. The flatbed is the most popular type because of its ease to use and versatility. The flatbed can carry cargo, vehicles and containers.
  • integrated tow truck
  • hook and chain truck
  • wheel-lift tow truck
  • flatbed
Write a Business Plan
Write a towing business plan and carry out a survey or feasibility study. Study your competitor’s prices, types of vehicles and service. Try to focus on an area to provide your service. Popular areas that require such services are highways, major roads and commercial areas.
Financing
The main equipment is the truck and they don’t come cheap. To get funds approach a financial institution in your locality. Apply for long term, low interest loan.
Other funding sources are crowd funding, partnership or through a core investor. You could try targeting saving, angel investors or borrowing from family or friends. Other cost considerations are rent, licensing fees and staff wages.
  • apply for long term
  • crowd funding
  • partnership
  • find a core investor
  • try targeting saving
  • angel investors
  • borrowing from family or friends
flatbed towing
Licensing and Permit
To start the business you need to apply for a permit. You would then be issued an operational license. However obtaining a license is challenging because it is highly regulated and the requirements differ from one state to the next.
The driver of the truck needs to have a current commercial driving license. Then register the business as a limited liability company and get liability insurance. Make sure you have employer identification number for tax purposes.
  • apply for a permit
  • operational license
  • current commercial driving license
  • business name
  • register LLC
  • get liability insurance
  • employer identification number
Purchase the Vehicle
The tow truck could be new, used or old. It is better to buy a used truck to save money. Make sure the engine works smoothly including the tow mechanism.
Shop for a trusted brand or those favored by your competition. Get a commercial auto insurance policy, DMV registration for the vehicle.
Equipment
There are 5 types equipment used in the towing business. You have the wheel-lift, integrated. Others are the boom, lift flatbed and flatbed. The wheel-lift uses a large metal toke fitted under the front or rear wheels. The lift flatbed uses a wheel lift frame while flatbed can hydraulically lift the entire vehicle.
  • wheel-lift
  • integrated
  • boom
  • lift flatbed
  • flatbed
How to Attract Customers
The tow truck business is slightly challenging because you need to attract customers. A good way is to build relationships, offer prompt service at reasonable price. Top customers are car dealers, importers of vehicles, mechanic workshops. Scrap yards. They work closely with the police, auto clubs, and transport companies.
Setup a website
A good way to attract customers is by setting up a website. People that need your services might stumble on your site and make the call.
Hire a web designer to build the website or do it your self. Make sure you add images of your truck, workforce and services. The site should have a dedicated number for emergencies.
Hire Employees
The staffs you need are truck drivers and secretary. Others are office cleaners, accountant, and sales representatives. It is possible to run the business yourself.
Marketing
Marketing considerations include using social media channels and a website. Print flyers, posters and banners. Use radio and television to reach customers. You can distribute business cards and use word of mouth.
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