need help on towing start up co.

[onegreatguy08]

Hello

I was looking to start a small towing busniess in my city of Wakefield Ma. I just need some help as how to start up from scratch. I have worked for large Corp's such as Coca-Cola and G.E. for over 30 years now. Do not like the politics that go with the sceene. Can anyone help?

Thank You

 

[spotco2]

Have enough operating capitol to survive for a year without making a profit.

Pay for as much as possible with cash...don't finance anything unless you have no choice.

Get your licenses, DOT's, liability and vehicle insurance as well as insurance for secured impound yard.

Find a local mechanic that you can trust to repair your trucks quickly when needed. When your truck is down, you are not making any money. Inspect your trucks weekly and perform preventative maintenance routinely to try and avoid unexpected down time.

Find out how your local police operate their rotation list and get on it.

Sign up as a vendor for every insurance company and roadside assistance company you can find. Some pay better than others, some don't pay at all. Weed out the ones that are not profitable.

Set up a Square Up account to accept credit cards on your Andriod or iPhone. A lot of folks don't carry cash.

Get professional looking uniforms with your company name and logo. Wear them everywhere. Make sure trucks are all lettered alike, including your personal vehicle. You're after name recognition. The more people see your name and logo, the more they will remember it.

Set up a clean, one page web site that is mobile friendly. Learn or pay someone to SEO it so that it shows up on the first page of Google, Bing and Yahoo. Nobody uses yellow pages anymore for emergency services.

Drop business cards at every restaurant, gas station and auto repair shop in your area.

Hire an accountant that specializes in small businesses. They will be your best friend or your worst enemy. They can make you or break you.

Pay yourself a fair, living wage for your area. If you are not able to do this, talk with your accountant.

Talk with your accountant and get the to help you decide if you need to be incorporated, an LLC or DBA. There are advantages and disadvantages of each. Get your accountant to explain the differences and decide which is best for you.

Don't expect to work 9-5, mon-fri ever again. You will never be able to plan anything with your family again. Be ready to work when the call comes in. If you plan on going out, the phone will ring on your way out the door or when you are out eating dinner with your family.

You might think that you are working for yourself. In reality, you are working for your customers.

Enjoy it. Owning a small business can be very rewarding, but can also be a huge strain on your family if they are not behind you 100%.

 

[sailcat]

Have enough operating capitol to survive for a year without making a profit.

Pay for as much as possible with cash...don't finance anything unless you have no choice.

Get your licenses, DOT's, liability and vehicle insurance as well as insurance for secured impound yard.

Find a local mechanic that you can trust to repair your trucks quickly when needed. When your truck is down, you are not making any money. Inspect your trucks weekly and perform preventative maintenance routinely to try and avoid unexpected down time.

Find out how your local police operate their rotation list and get on it.

Sign up as a vendor for every insurance company and roadside assistance company you can find. Some pay better than others, some don't pay at all. Weed out the ones that are not profitable.

Set up a Square Up account to accept credit cards on your Andriod or iPhone. A lot of folks don't carry cash.

Get professional looking uniforms with your company name and logo. Wear them everywhere. Make sure trucks are all lettered alike, including your personal vehicle. You're after name recognition. The more people see your name and logo, the more they will remember it.

Set up a clean, one page web site that is mobile friendly. Learn or pay someone to SEO it so that it shows up on the first page of Google, Bing and Yahoo. Nobody uses yellow pages anymore for emergency services.

Drop business cards at every restaurant, gas station and auto repair shop in your area.

Hire an accountant that specializes in small businesses. They will be your best friend or your worst enemy. They can make you or break you.

Pay yourself a fair, living wage for your area. If you are not able to do this, talk with your accountant.

Talk with your accountant and get the to help you decide if you need to be incorporated, an LLC or DBA. There are advantages and disadvantages of each. Get your accountant to explain the differences and decide which is best for you.

Don't expect to work 9-5, mon-fri ever again. You will never be able to plan anything with your family again. Be ready to work when the call comes in. If you plan on going out, the phone will ring on your way out the door or when you are out eating dinner with your family.

You might think that you are working for yourself. In reality, you are working for your customers.

Enjoy it. Owning a small business can be very rewarding, but can also be a huge strain on your family if they are not behind you 100%.

Well written piece, nice job.

 

[rc77]

Do you have any experience in the towing business? If not you should work for a local towing company for at least a year and learn about the business before you go buy trucks. Also this area is saturated with towing companies. There's at least 15 within 10 miles of Wakefield.

 

[HoosierMark]

The advice above is very accurate. Two other points, make sure you put money back for taxes. My acct told me when you make $3 put one away for taxes. i.e. put 1/3 away for them. Secondly, line up a backup person to cover for you. You will get sick or have other commitments you need to go to, customers hate it when they call and do not get service.

Perhaps if the market is saturated with tow companies you need to find a niche to work in. Such as moving rv trailers, picking up and dropping off cars to repair shops or something. Is there a need in the market that is not beng served?

 

[AndyL]

Going by the questions you ask... Your in for an interesting ride...

Start with wreckmasters - they have some office side and field side training programs.

But the joke of how to make a million $ towing - spend 2 million applies... If you've never done it - your in for a harsh and extremely expensive learning curve.

And start reading at tow411 - wouldn't recommend posting for a long while yet though

 

[NHBandit]

Lots of great advice. Never had my own towing company but one of my best friends in NH did as well as the salvage yard I managed doing towing. Insurance is going to cost you ALOT. Established local companies are going to do their best to run you off. If you expect to be able to do ANY police tows, impounds, repos, breakdowns, wrecks etc. which is a big part of your income you will need a fenced in lot for secure long term storage. Example you pick up a car that was in an accident. YOU are responsible for keeping that vehicle safe from vandals & thieves until the insurance company settles with you. Get friendly with the local salvage yards so you have a place to dispose of the junk you end up owning because the prior owner walked away from it. My advice is to do something else.

 

[Thumper68]

My uncle and I ran a small part time towing operation back in the early/mid 80's. We specialized in off road recovery and towing for 4 local repair shops. It was good extra income for the 5 or 6 years that we did it. Lots of fun getting morons out of the woods who had no place being there in the first place.

Best advice is to find a nitch no one is filling and build from there.

 

[NHBandit]

My uncle and I ran a small part time towing operation back in the early/mid 80's. We specialized in off road recovery and towing for 4 local repair shops. It was good extra income for the 5 or 6 years that we did it. Lots of fun getting morons out of the woods who had no place being there in the first place.

Best advice is to find a nitch no one is filling and build from there.

This is good advice if your mind is set on giving it a go. Another thing is to do towing for car dealers. When I used to go to the wholesale auctions there were always a couple of towing companies that hung around the auction to tow stuff that didn't run or needed work back to the dealers lots. Be aware though that used car dealers want you do do it cheap and want to pay you later.... You have to let those types know you're not a pushover and if they don't pay you WILL go back after dark and take the car until they do pay. Nice guys don't make it in the towing business very often.

 

[cdeer001]

I drove a tow truck for 4 years back in the early 90's. Do a **** load of research into the market you are entering. Learn from other's mistakes. Try looking here: Towing and Recovery Association of America - http://www.towserver.net , Towing and Recovery Footnotes - http://www.trfootnotes.com/ , AW Direct - http://www.awdirect.com/

Questions you need to answer: How many other towing companies service that area? What are their prices (hook up fee + mileage)? Can you survive on that once you factor in all your expenses (truck payment, fuel, insurance, maintenance, equipment, salary, etc)? Will you service auto clubs (AAA, Amoco Motor Club, Cross Country)? Auto Clubs are great for volume business but **** on what they pay for services. What services will you provide: straight towing (point A to point B), long distance towing, road service (jump start, tire change, lock outs, gas delivery), vehicle recovery (ditches, lakes, woods).

Don't forget industry education and certification: http://www.towserver.net/certification.htm
http://www.wreckmaster.com/
http://www.iitronline.org/

+1 for this:
If not you should work for a local towing company for at least a year and learn about the business before you go buy trucks.

+1 for this as well as I did four years of on call 24/7 365.
Don't expect to work 9-5, mon-fri ever again. You will never be able to plan anything with your family again. Be ready to work when the call comes in. If you plan on going out, the phone will ring on your way out the door or when you are out eating dinner with your family.

Good Luck!

 

[ckucia]

Lots of good info.

Don't know much about towing, but I know a little about web sites.

Make sure you put relevant information on there.

Contact phone numbers, address, hours of operation. Make it easy to find.

I can't believe how many local businesses I try to patronize have a web site that don't list their hours. As a consumer, when I'm interested in possibly trying a new place, and one's definitely open and the other I can't know without a phone call, I don't even bother with the call and just go to the one with good info.

We have a couple of charities in the area who accept donated cars. I don't know how they get the cars to their location, but that might be a source for some income.

Also, I happen to have a common car (Chrysler Sebring) with low ground clearance. It requires a flatbed to tow it. Having been towed once or twice, that information appears to be in their database so they send the correct equipment out. If you don't have that sort of equipment, then the roadside assistance companies probably aren't going to be interested in using you.

 

[rc77]

Every town around there already has at least 2 tow companies already. Wakefield has 2 that have been around for quite awhile. Most anything in this area is sewn up. You could be the new guy that comes in and undercuts everybody but 15 years towing in this area I've seen many come and go from trying that approach. If you're determined anything is possible but you will have a long hard road around here.

 

[rsanter]

a guy I knew back when retired from the military. he was 18 when he went in and was then in his 40s
got out, bought an old tow truck and went into business....
you have to be in business for a year (around here) to get on the police rotation list (where the police will call you out for any generic tow they need done.
the police call list is nice because you get steady work and you get to impound cars that you then get to charge storage on......but you have to have a yard to store them in

he was doing tows anywhere in town for like $20 or $25 back in the 80s. that was cheaper than anyone else by enough that he in general kept busy but not overworked.
he also did some repo work. being ex military he could handle himself but don't get into this unless you can......he told me of many conflicts he had from people not wanting to lose their car....very dangerious

learn all you can before getting into the business....seems to me that a tow company is a money maker and can have low overhead depending on how you do it

bob

 

[jd_1138]

Every town around there already has at least 2 tow companies already. Wakefield has 2 that have been around for quite awhile. Most anything in this area is sewn up. You could be the new guy that comes in and undercuts everybody but 15 years towing in this area I've seen many come and go from trying that approach. If you're determined anything is possible but you will have a long hard road around here.

We really don't know the full story with the OP. Maybe he has a truck already, is retired from corporate world, and just wants to do a few tows here and there for some extra spending cash (on tools?)? But I guess it'd be kind of hard to already have a truck, as they have expensive equipment on the back -- hydraulic tow body and all.

Maybe a better business would be medical transportation. I know a guy who has a contract with the local welfare dept. to provide transportation to people on Medicaid to get to their Dr. appts.. Basically he has a few minivans. Some are old and junky. Maybe run it like a taxi/medical transportation business.

 

[Mach5]

You can pick up a used roll-back for around 10-13k. See them all the time on CL. Condition???? Well, as they always say -- caveat emptor.

I agree with most of the things that the first responder said about talking to an accountant. Having a good accountant (IMHO) is paramount to being able to successfully operate a business. If you have employees, you need WC and payroll, and I suggest that you NOT try to do that stuff yourself.

Find yourself a lawyer, too. Particularly one that does business law, and ideally one that is familiar with your particular business. You'll never know the value a good lawyer will provide (i.e., you'll avoid a lot of problems you would otherwise have to learn about the hard way). An LLC can be taxed as a sole proprietorship, partnership, or an S-corporation, depending upon what makes the best tax sense for the operation. It has the benefit of being simple to operate, flexible, and yet still provides the legal protections of a corporation. Running the business separately through an LLC will help to protect your personal assets from creditor claims if the business falls on hard times.

Insurance -- consider getting an umbrella policy.

The above are generally good ideas for operating ANY business.

The one other idea not already mentioned that might be a potential source of business for a new tow company -- repossessions. I think most repossession companies do their own work (and generally use tow equipment that hides in the bed of a pickup so as not to attract attention), but if you don't have a yard and don't want to be in the repo business yourself, you might see if there are any local repo companies that contract out the tow work.

 

[Boomer343]

To the OP....you think there are no politics in running your own public business.......hmmmm you will be getting schooled big time and you will end up paying for the experience.

I have seen my share of folks like yourself putting themselves years behind by trying to start there own business in a field they know very little about. Age is against you, experience is against you, physical condition is against you and the list goes on.

My advice...**** it up, deal with your present situation or move to a comparable job within the industry you know instead of flushing everything on a risky venture.

But that's just MHO.

 

[bigbubba]

The one other idea not already mentioned that might be a potential source of business for a new tow company -- repossessions. I think most repossession companies do their own work (and generally use tow equipment that hides in the bed of a pickup so as not to attract attention), but if you don't have a yard and don't want to be in the repo business yourself, you might see if there are any local repo companies that contract out the tow work.[/QUOTE]

I got the idea that i was going to do repo work a couple of years ago,I have the truck and was going to buy a "Hidden" wheel lift. Insurance was the killer,$7500+ a yr! I just couldn't spend that,With the wife and kids depending on me.

 

[spotco2]

I've started several businesses from scratch. Some I knew about, some I learned as I went. Some were successful, some were sold, some cost me a lot of money.

If this is something that you really want to do, then research it, grow a pair and do it. There is no better motivation for a small business owner than to have a family, mortgage and utilities but not enough cash in your pocket to pay for it all at the same time.

As far as being the new guy in town, yup it's hard but very doable. As far as having to many others, there's always room for one more.

Research local pricing. I know guys that are towing anywhere in town for $35. I don't understand their business model enough to figure out how they are paying their bills.

Most tow companies that I know use flat bed trucks with a wheel lift on the back. They can carry 2 at a time. They also move equipment, tractors and anything else that will fit on their bed. Some of the also do repo work with these trucks, but that's another story.

Auctions and dealers typically use transporters to move vehicles. These are 3-5 car wedge trailers that are normally towed behind a dually. Dealers will use tow trucks for picking up customers vehicles when they are broken down and sometimes for a voluntary repo.

Back to pricing. I learned a long time ago that you don't want to be the cheapest person in town because you will not make a living. It does not matter if you are the most expensive person in town though because if someone wants you to work for them, they will pay your price. I would suggest contacting insurance companies to see what the maximum is that they will pay for their roadside coverage. Depending on your overhead, you might be able to work for that price or you might have to charge more and just let the customer pay the balance (that's not out of the ordinary).

If this is what you want, then find a way to do it and make it work. Don't let anybody tell you that you can't.

 

[DIC]

If your customers or shops you tow for aren't complaining about the price You are not charging enough..

 

[nicksnothereman]

Hello

I was looking to start a small towing busniess in my city of Wakefield Ma. I just need some help as how to start up from scratch. I have worked for large Corp's such as Coca-Cola and G.E. for over 30 years now. Do not like the politics that go with the sceene. Can anyone help?

Thank You

Don't price yourself out of business. Keep your price range within 10% of your competitors but offer better customer service.

 

[LegacyIndustrial]

The key to greatness and success is focus. Pour every bit of your soul into it and never give up.