All You Need to Know Before Starting a Towing Business

By | July 16, 2017

Wrecker Abingdon MDWith the right information, resources and research, starting a tow truck business can be easy. To successfully get into this business, there are a couple of things you need to get right. From startup costs, business permits and licenses, marketing tips and customer acquisition and retention, all these aspects that must work right from the onset.

This guide looks at all you need to know before starting a towing business, on matters dealing with business startup, how to get started, legal considerations, growing your towing business and other useful components. Let us get started;

Business OverviewFlat Bed Abingdon

Vehicles break down, they are left stranded and are illegally parked every day. If you are involved in the towing business, your primary work will be to transport these vehicles to the repair shop. Apart from this business model, some tow truck businesses offer emergency roadside assistance.

Anyone who has basic mechanical skills may be well suited to start this type of business. Towing business is not a difficult venture. Hooking a damaged car to a tow truck can be challenging, though a mechanically inclined mind can perform this task with ease.

Daily Activities in Towing Business

Towing AbingdonA towing truck business owner spends most of their time driving broken vehicles, those stranded and those improperly parked. They hook them up on a tow truck and transport them to another location. Tow truck businesses receive calls from multiple sources, including police departments, individuals, other municipal departments, repair shops, motor shops, property owners and auto auction companies.

This type of business makes money by charging a customer for tows. Typical costs include a flat fee for towing fee, a mileage fee and a storage fee. The growth potential for tow truck business doesn’t happen that fast. Most of these businesses serve a single geographic region. In a large metropolitan area, they only serve the city.

Some companies advertise nationwide towing services Such companies however usually accept calls for tows but contract such work to local towing companies to perform the ground work. They also provide free referral services.

Licensing and PermitsAbingdon Towing Flatbed

To operate any towing business, you need to have proper licensing and permits that are issued by the state and local government. You need to make contact to your local government to determine the specific requirements based on your location. If you are planning to operate an impound lot, check with the local zoning ordinances for permits.

You also need to have liability insurance for your towing business. The insurance covers you, the tow truck(s) and your clients. Your insurance broker should advise you accordingly, about the minimum level of coverage required. Also, pay attention to the type of driver license you own. Many states and cities require you possess a CDL license to tow vehicles.


Aberdeen Towing ServiceIf your plan is to run a one-truck operation, issues pertaining financing should not be a problem. A basic bank loan should be sufficient to cover your expenses. However, if you plan on having a fleet of tow truck and flatbeds, you should be prepared regarding financing.

Different financing options are available, and their choices depend on their terms, the flexibility of payment periods and what your preferences. Your credit score comes in handy when you need loans from lenders. Your business history will also help determine your financing qualifications.

Be open with the lenders so that they can understand your business model, your business cash flow and equipment needs. Consider the required operating costs and decide how much you can afford to finance your towing equipment.

Attracting and Retaining CustomersFlat bed Abingdon MD

Your next biggest challenge is to understand the local towing market and find customers. Building a loyal customer base depends on building long lasting relationships and offering reliable services.

You can start this business by forming relationships with auto shops and local administrators. Garages normally have a partnership with towing companies, and in return get discounts on standard fee for repeat business. Another good lead for this business is to liaise with local police department.

Remember to include the local advertising options such as ads in yellow pages, logos on the side of your truck, business cards and the power of social media advertising. Set up a website where people can easily find access to your services and contacts to reach you accordingly.

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