When you have a tow truck business, there’s a lot to think about. You have to think about getting a truck, setting up the business side of things, getting tow truck insurance, then actually marketing and branding your business. It’s a lot to juggle. As you’re mulling over the possibility of venturing out on your own and starting a tow business, you have to ask yourself a few questions and decide if this is really what you want. Here are three questions we suggest you ask yourself about what you want to do with your towing business.
Starting a towing business? Ask yourself these 3 questions.
1. What do I want to do with my towing business?
It’s really important to know exactly where in the towing realm you want to be. There are a lot of options out there and a lot of different ways you can make a living with a wrecker or rollback.
For example, you might want to do roadside assistance. Or your end goal might be to get on rotation somewhere and tow for the city or county. Or maybe you want to tow for a motor club or for an insurance company. You might even be a brave soul who wants to get into repo.
Our point is this: though you might have a vague idea of buying a truck and launching a business, you need to have a little more than “vague” to go by.
You need to have a plan for where and how you want to tow. Then you need to research some of the aspects that go into running the kind of business you want to start. What costs are associated with it? What licenses will you need? (Your state’s Department of Transportation can probably help you with that.) What kind of insurance will you need? What will your business need in order to function? (For example, to do rotation work you’re probably going to need a storage lot.)
Having a plan is important because the tow truck insurance market for new ventures can be tricky. It’s a lot narrower than the market for more established businesses, so if you’re just starting out, you need to know what you’re going to do. Insuring a business that does auto hauling is different than insuring a business that does towing, after all. Likewise, insuring a business that hauls equipment could look different. You need to know what you’re going to be doing so that you can get the right insurance and the most accurate price for your insurance from the get-go.
Anyways, do your homework. Research your options and come up with a plan for what you want to do and what it’s going to involve.
2. What kind of tow truck do I need?
It’s also important to think about what kind of tow truck you’re going to need. Would a wrecker work for you? Or do you need a flatbed? Consider the capabilities of each type of vehicle and how it fits in with your vision for your business. You can’t do the work you want to do if you don’t have the right truck.
Choosing a tow truck means you need to know what kind of vehicle you’re going to be hauling. Do you need a simple flatbed that’s perfect for towing your average car or SUV, or do you need a gigantic tow truck that can haul other trucks? (Keep in mind that the kind of tow truck – and how much truck you need – impacts the cost that you’ll pay for your tow truck.)
This is another area in which you need to do your research once you’ve figured out what you want your business to be and what you want to do. Choose your tow truck wisely.
From there, start thinking about what extra equipment you might need. Will you need additional lights? Extra straps? Dollies? Don’t forget to include all of those extras when you’re figuring out how much your tow truck is going to cost. What other equipment will you need to get your business rolling?
3. Where are your contracts going to come from?
Of course, you also have to think about where your contracts are going to come from. Who do you want to tow for? There are a few different places you can get tow contracts:
- Rotational towing for city/county (municipal)
- Roadside assistance/Motor clubs
- Police departments (City/County)
- Local businesses like apartment complexes and shopping centers
- Insurance companies (who often offer roadside assistance)
It’s also important to have a steady supply of jobs so you have a consistent income to support your business, which is why you need to know what kind of contracts you want to go after. You should do some research to know what’s required to get the contracts you want – for example, would you need a storage lot? Are there rules or regulations you need to know about? What do you have to do to be qualified to get a tow contract for the entity you want to work with?
Keep in mind, too, that it can take time to get yourself settled with contracts and to get started in that world. Make sure you have enough money in reserve to cover the costs of your insurance – plus other business expenses you’re going to encounter. When you’re established and you’ve kept up a clean loss history, you’ll be able to look into different insurance options and hopefully get a better rate for your tow truck insurance.
It all comes back to this: when you’re starting a tow truck business, you need a plan. You need to do your research. You need to know what kind of towing you want to do and prepare for it.
You also need to get the right towing insurance. Get started with quotes by filling out our online form, giving us a call, or messaging us on LiveChat.