Like all businesses, starting a towing company can be profitable, but at the same time, things may not go as planned.
How successful a towing business will be is highly dependent on preparation, and if you tick all the necessary boxes before pouring your money into the venture, there are lots of opportunities out there for highly-professional and trustworthy towing services.
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If you are looking to start a towing company, here are some points to help you on your way:
How to Start
The first step, surely, is drawing up a business plan. What services do you plan to provide? How will you raise the funds you need? How will your day-to-day business operation run? Do you plan to run adverts and so some marketing? These are the questions you need to ask before starting your business. As regards the services every towing company can offer, more details are provided later on in this post.
An important point to note is: you do not ned more than one tow truck to start your business. As business improves and the need for more trucks arise, you can then add more tow trucks to your collection. There are people who made the mistake of acquiring more trucks than they need in anticipation of boisterous business, only to be disappointed and out of cash after some months. If you can afford to get one, the best option as far as a tow truck is concerned is the flat-bed tow truck.
After the sorting the logistical details, the next thing is to procure the necessary towing licenses or permits. Get in contact with your state’s authorities and find out if you need, and what you need to do to apply for a towing permit. The towing business is risk-filled, so it may be wise to make some arrangement for liability insurance and business auto insurance.
What Towing Services Do You Intend to Provide?
Perhaps the most important question when it comes to starting a towing company. There are so many options, with each having its merits and demerits, and the success of your company may depend on whether or not you make the right choice. Here is the list of services a towing company can provide:
This is when customers contact you directly and pay you for services rendered. It is a major source of income for towing companies, but it requires lots of advertisement and aggressive marketing; how else will prospective customers find out about your company and reach out to you? The major advantage of cash calls is: once the medium of advertisement is put in place, you can reap the benefits for years.
This a formal/informal arrangement with the city or the police departments where a towing service is called upon to tow vehicles at the police’s request. This method is very lucrative as the city pays more than most individual cash calls, but to be eligible for it, your insurance coverage must be assured and extensive, and your permits must be up-to-date. With police/city calls, your drivers must be readily available and have good response rates.
Motor Club Calls
Motor club calls pay the least, but as a fledgling towing company, you may have no option but to work for them and pull in the cash that you can. This can serve as a learning curve for you and your workers and needed expertise is gained for when calls that will bring in more money starts trickling in.
Auction House Calls
Like motor club calls above, auction house calls do not bring in lots of cash too. They, however, do not require the urgency that motor club calls need. You do not need to attend to a stranded customer within 30 minutes, just get the job done.
Most auto salvage yards and car mechanics need to partner with a towing company and the compensation is quite tangible. They pay a lot more than auction houses and motor clubs. All you have to do is work hard and build a good working relationship with them.
The Importance of Customer Satisfaction
A new business can be made or broken by how they handle the few customers that they have. In a populated market like towing services, the last thing a burgeoning company want is a bad reputation when it comes to customer relations. You must do all you can to make sure that every customer leaves satisfied, be it a cash call, a motor club call, or an auction house call.
Have a readily-available hotline, and make sure your dispatcher knows enough about the services you provide. People don’t want to call a towing service in the middle of an emergency and be greeted by the voice of a novice.