If you are interested in starting a towing business, you need to have a business plan. Coming up with a business plan is the most important step you will have to take when creating any business. The plan serves as a road map for the early years of your business. The plan of activities includes a projection of 3-5 years of your business and outlines the route the business will follow, including yearly milestones and revenue forecasts.
We have prepared this guide to let our readers know the basic elements they need to have in their plan. We may not be able to give the definite and actual business plan since various businesses will have different geographical setup, financing options, markets and other related business factors.
Regardless of how you shall start a towing business, here are essential elements needed in your business plan;
Build your Fleet
The auto market is full of different types of tow trucks, and each of them has their functions. Flatbeds are used to tow vehicles critically damages. Rear-hook towing vehicles are used for towing vehicles less damaged, by hooking the rear axle of the damaged vehicles to the hook of the tow truck. You need to decide on the type of tow trucks you would need for your business.
Mode of Operation
Decide on your mode of operation. Would you prefer to operate alone or would you hire other drivers and run as a multi-truck company? Running a multi-truck would need more capital and more towing trucks. You would also need to have a central operating location.
Business Registration and Permits
Ensure your business is registered with the state and local government and avail all necessary documents. You will be required to have a business license and meet set driving classes to operate the towing trucks. To run your business smoothly, find out what the law stipulates in relation to your local jurisdiction.
You need to purchase business insurance such as general liability, property, autos and workers. You need to have compensation insurance from a licensed insurance provider. The general insurance and property insurance will come in handy for costs associated with damage to towing equipment and general lawsuits. You also need to purchase a surety bond to help cover any additional costs that are associated with lawsuits.
Study the Market
Starting a business without first researching your market would be disastrous. Before you invest in a towing business, you need to sit down and figure out how you are going to get customers to get your business started. In this blog, we have discussed in details ways of expanding your business and the best channels for marketing. Be sure to read and understand these issues.
Set your Prices
You need to determine how you are going to charge for your services. When setting the prices, be guided by the market and put into consideration all expenses that would be required for you to complete a particular task. You should also find out what other are charging, and strike a balance.