Before starting a towing company
Starting a towing company can be a challenging process. As excited as you may be to get the wheels rolling and receive the cash, there are a few things you can consider before you open your doors.
1) What type of company are you looking to build? Diversity in business sources is important when running a towing company. The old adage “Don’t keep all your eggs in one basket” also holds true for the towing industry. Understanding the potential sources of business and how profitable each one is can be helpful in determining how successful you will be early on. Police, Motor Club, Auctions, Cash Clients, Account Clients, and Private Property Accounts all have unique business demands and asset requirements. Be sure to consider how each source will play a role in your business both now and in the future.
2) Buying trucks and paying rent, employees, and liability insurance will eat up most of your income. And it sure is expensive to pay for these items when few calls come through. A huge cornerstone of any towing company is providing service to the local police and fire departments. Check with your contacts to see how to get on the lists. If it’s not possible to get on the list for a few months, it may make sense to wait. City listings are a steady and profitable customer, but don’t count on that income until you know you can get on the vendor list. Each police department has a vehicle officer or contact in charge of the towing process. Get his name and make him your friend.
3) Build a brand, not just a company. With an overabundance of towing companies to choose from, consumers often select companies at random to request a quote. Make your business stand out by having a good name and a solid marketing plan. Having these in place before you start spending on advertising will make that money work harder for you. And be careful about committing to long-term contracts, such as annual yellow page business directories and online advertising commitments. Ask what you can expect for your money, and remember, much of this you can do yourself for little or no expense.
4) Start building your contacts now. Your business doesn’t have to be up and running to print business cards and introduce yourself to potential customers. Tell them you are launching in 3 months but wanted to understand what they are looking for in a good company. It will show your dedication to providing a good product and give you insight into how to best compete with your future industry peers.
I ran a successful towing company for several years and know that much of what you have to do isn’t hard work, it’s just hard work. Being committed to being the best and being professional will give you a huge boost over your competition.
