Is This the Right Business?
Before starting any business, know its challenges and rewards. Owning a business makes you a boss and a decision maker. A tow truck business is a solution to motorists in problems. There are a number of tow truck businesses that you can start and each of them requires differing capital input.
How to Start
In order to start a tow truck business, you need to register your business. File the paper work at the state office. You may start a limited liability company or sole proprietor. Also check with the regulators and municipal officials about additional licensing and permits. There is also need for a liability insurance to cover the risks of the business.
What Equipment Do You Need
You definitely need a tow truck. There are a number of tow trucks that you can start with. You may go for rear-hook or flat-bed trucks. Flat-beds are more versatile and accommodate even badly damaged vehicles. Additionally, you need a cellphone when you start and later a dispatch office when the business grows.
Business Space or Location
As a towing business, you may have to hold vehicles, for instance, those that are illegally packed. You also need to hold cars for customers who are unable to pay for towing services and you have to remove the vehicle from the accident scene. You need secure storage location for these.
Who to Hire
At first, you will need a driver for the tow truck. Hire a driver with experience and a valid commercial driving licence. You also need to check the records of every new employee. The driver needs to be courteous and clean.
A business without a market is dead. Establish a good relationship with the local police to have access to the accident responders’ list. Promote your business to local repair facilities and ride on referrals. List your company in the yellow pages and leave your details at auto-part stores. Also, establish an online presence through your website and social media.
Operating Income and Expenditure
In the operation of this business, you need to evaluate your income stream and expenditure. You need to examine the kind of returns that you are making. The recurring expenditure should not consistently exceed income.
You want to get returns or profits and when you fail to do so, you need to diagnose the problem and try different approaches. You may choose to spend less or be more aggressive with obtaining clients.
As the business grows, you also need to hire employees to help you manage sells and expenses. They may also bring in ideas that benefit the business.
The usual expenses for a tow truck business include overhead costs such as rent, mortgage, electricity and garbage collection. There are also truck mortgage costs, fuel, insurance, repair costs, advertising, uniform, phone, damages and miscellaneous. Moreover, there are other costs such as licence, subscriptions, taxes and other dues.
The Overall Take
Tow trucks are not a favourite when they engage in removing unlawfully packed cars. In contrast, they are loved because they provide roadside help on those tough days. This is a business that highly needs good customer service. The demand is there and businesses need to strategy how to take advantage to increase market share. This business offers satisfactory results in the long run.